Saturday, August 21, 2010

SunCity declared 31 sen interim dividend

Sunway City (SunCity, 双威城, 6289) has just released its 2nd quarter report for FY2010, and has declared an interim dividend of 31 sen per ordinary share of RM1.00 each less 25% income tax for the financial year ending 31 December 2010, which will be paid on a date to be determined. If I'm not mistaken, this will be the highest ever quarter dividend declared by SunCity since its IPO.

In the last quarter, SunCity also declared a dividend of 5% per ordinary share of RM1.00 each less 25% income tax, which has just gone ex yesterday (20 August 2010), which is the same day when the other 31 sen dividend was declared after the market closed. This 5% dividend will be paid on 22 September 2010.

This means that shareholders of SunCity will get dividend of at least 36 sen per share this year (there is still a 3rd quarter report to be released by this year). With the last closing price of RM3.73, the DY within the last 2 quarters is already 9.65%.

As expected by everybody, the financial position of SunCity has largely improved after the listing of Sunway REIT, although the actual IPO price of Sunway REIT (SUNREIT, 5176) on 8 July 2010 at RM0.89 is lower than the anticipated RM0.97. I think the shareholders of SunCity are rewarded with this generous dividend, as a result of this IPO exercise of  Sunway REIT.

The prospect of SunCity remains pretty positive, as written in its quarterly report:

"On 8 July 2010, the Group completed the listing of the Sunway Real Estate Investment Trust ("Sunway REIT") on Bursa Malaysia Securities Berhad ("Listing"). The Group holds 36.6% in the Sunway REIT.

The Listing has reduced the Group's gearing significantly and hence enabled the Group to accelerate it's business expansion plans in the property development segment (local and overseas markets) as well as the property investment segment.

On the back of unbilled sales of RM743 million, the Group expects the property development segment to continue to contribute positively to the Group's results this financial year. While enjoying lower interest expense resulting from the reduced borrowings as mentioned above, the Group also benefits from the share of profits from the Sunway REIT while receiving manager's fees for the management of Sunway REIT.
Barring unforeseen circumstances, the Board is of the view that the Group's performance for the financial year ending 31 December 2010 will improve."
With this, I feel comfortable and happy to remain as one of the shareholders of SunCity.

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Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.


Voyager8 said... Reply To This Comment

The ex-date for this 31 sen dividend is 7 September 2010. Payment date is 7 October 2010.

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