Earnings Report: Sunway Construction Group Berhad Missed Revenue Estimates By 22%
The analysts might have been a bit too bullish on Sunway Construction Group Berhad (KLSE:SUNCON), given that the company fell short of expectations when it released its second-quarter results last week. Earnings overall missed expectations, with revenue falling 22% short of analyst estimates, at RM1.0b. Statutory earnings per share were RM0.078, 9.3% shy of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Sunway Construction Group Berhad from 17 analysts is for revenues of RM5.60b in 2026. If met, it would imply a huge 24% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 2.9% to RM0.33. In the lead-up to this report, the analysts had been modelling revenues of RM5.67b and earnings per share (EPS) of RM0.33 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
See our latest analysis for Sunway Construction Group Berhad
The analysts reconfirmed their price target of RM9.12, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Sunway Construction Group Berhad analyst has a price target of RM10.50 per share, while the most pessimistic values it at RM7.30. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Sunway Construction Group Berhad shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sunway Construction Group Berhad's past performance and to peers in the same industry. The analysts are definitely expecting Sunway Construction Group Berhad's growth to accelerate, with the forecast 55% annualised growth to the end of 2026 ranking favourably alongside historical growth of 25% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Sunway Construction Group Berhad is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at RM9.12, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Sunway Construction Group Berhad going out to 2028, and you can see them free on our platform here..
You still need to take note of risks, for example - Sunway Construction Group Berhad has 1 warning sign we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.