Despite difficult economic conditions, SunCity achieved yet another year of laudable performance for the 18 months financial period ended 31 December 2009. SunCity recorded a Group revenue of RM1.6 billion and profit after tax and minority interest (“PATMI”) of RM538 million. On an annualised basis, the PATMI of RM359 million represented a growth of 37% from RM262 million in the previous financial year. Excluding the non-core operational performance, SunCity achieved a core PATMI of RM225 million for the 18 months financial period ended 31 December 2009 which represents a core earnings per share of 47 sen.

As a result of this strong financial performance, the Directors are pleased to propose a final dividend of 5 sen per share of RM1.00 each for the financial period ended 31 December 2009. Together with the interim dividend of 8 sen per share that was paid in respect of the financial period ended 31 December 2009, this would bring the total gross dividends to 13 sen per share for the financial period ended 31 December 2009.

The 2009 financial period has been a truly rewarding one for SunCity and its stakeholders as several major investments have generated excellent contributions to the Group’s profits. We also foresee that these investment assets will lead to recurring revenue in the years to come. As such, I am pleased to mention that the theme for this Annual Report is ‘Delivering Values’.

During the period under review, the Group achieved numerous milestones in both its Property Development and Property Investment divisions.

In addition to delivering quality properties with positive capital appreciation to our customers, the Group placed more emphasis in constructing properties that incorporate innovative green features to preserve the environment.

The Property Development division garnered the prestigious Gold Award (High-Rise Residential Development – Provisional) in Singapore’s Building and Construction Authority (“BCA”) Green Mark Scheme (Green Building Design) with its Sunway Palazzio development, the first high-rise residential development in Malaysia to receive this coveted award. In addition, Sunway Challis Damansara, Sunway Vivaldi and Nautica, Sunway South Quay luxury condominiums also received the BCA Green Mark certification.

For the Property Investment division, since the completion of Sunway Pyramid’s expansion in October 2007, we witnessed a strong patronage of international and local visitors to Sunway Pyramid and also enjoyed a full occupancy rate. Within a period of 2 years, Sunway Pyramid has won numerous awards in both the Malaysian and international retail scenes, cementing its status as a popular retail destination.

The Group’s Property Investment division also launched Sunway Tower 2 (formerly known as Wisma Denmark) in January 2010. Since we acquired the building in 2007, Sunway Tower 2’s value has increased by almost 20%. With the appreciation, we are very positive with the development of Sunway Tower 1 on the adjoining parcel of land in the near future.

Another important highlight was the completion of Sunway Giza in Sunway Damansara, a 6.17-acre neighborhood specialty centre in December 2009. At 160,000 square feet of gross floor area, Sunway Giza is an integrated specialty retail centre that is designed to cater to the shopping, leisure and entertainment needs of surrounding communities in Damansara and Petaling Jaya.

The Hospitality division also added another milestone with the opening of The Banjaran Hotsprings Retreat in Tambun, Ipoh. We are convinced that this eco-luxury wellness retreat which consists of 25 villas and a holistic spa will play an important role in promoting Malaysia as a new destination for the wellness tourism industry. This spa is situated on a 56-acre valley fringing a cluster of towering hills, built around the natural enclaves of hotsprings and is surrounded by one of the oldest rain forest in the world. It has also been named by the Asia Spa as one of Asia’s Top 10 spiritual retreats.

The Leisure division continued to strengthen its offerings at Sunway Lagoon and Lost World of Tambun. Both theme parks have grown from strength to strength and enjoyed strong visitorship throughout the year. Furthermore, both parks have placed Malaysia on the world map as a top leisure destination. We are also proud to mention that Sunway Lagoon has won the Asia’s Best Attraction Awards for 3 consecutive years. It has been the venue of choice for many international events which include the MTV World Stage LIVE in Malaysia that attracted 15,000 visitors and was broadcasted on over 44 different MTV channels to an audience of over 600 million households globally.

The Sunway Medical Centre’s expansion which commenced in 2006 was completed in December 2009. With this expansion, Sunway Medical Centre has reaffirmed its standing as a key player in the medical industry and will play a bigger role in supporting the government’s plan of expanding the medical tourism industry.

SunCity views its role as a leading community master developer seriously. The story of the successful transformation of the 800-acre wasteland into what is now the impressive Sunway Integrated Resort City is still a lingering testimony of the Group’s continuous efforts to consistently deliver value to its customers and shareholders alike.

I am heartened to mention that despite the challenges we faced, we successfully injected back flora and fauna into a once forgotten and abandoned mining land. I am also proud to add that the Sunway Integrated Resort City has various components to enhance the quality of life for its residents as evidenced by the healthcare, leisure and education facilities available. This in turn has uplifted the image and property value of the township.

To date, we not only claim credit for the thriving development of the Sunway Integrated Resort City, but also for Sunway City Ipoh and Sunway Damansara townships. These 3 townships represent the Group’s expertise and competitive advantage in extracting value from a parcel of land and transforming it into a vibrant community hub.

I would also like to announce that the Group has been embracing the Lifestyles of Health and Sustainability (“LOHAS”) philosophy in its property development projects. LOHAS is actually a marketplace term that is used to describe a market sector that desires goods and services which are focused on the pillars of health and fitness, the environment, personal development and sustainable living.

We are fully aware that homebuyers are becoming increasingly sophisticated in their choice of properties. The key criteria for homebuyers are comprehensive security features, a contemporary and environmentally friendly design and lush green surroundings. As such, we will continue to infuse the LOHAS philosophy in our future projects with the aim of enriching the lives of our valued customers.

As mentioned earlier, the year 2009 was filled with challenges from both locally and abroad. Fortunately, we are now seeing gradual improvements on the overall market conditions for 2010. This is a result of the stimulus initiatives by global monetary authorities and various governments to embark on a global recovery plan. Based on these efforts and stronger consumer demand, the global economy is now projected to grow at a healthier pace.

In Malaysia, from an economic contraction of 1.7% in 2009, our government has forecasted a 4.5% to 5% economic growth for 2010 in anticipation of the global market recovery. This should herald the beginning of better things ahead. Additionally, the residential property market has recovered from the impact of the global financial crisis.

Although Bank Negara Malaysia has raised interest rates by 25 basis points, it is unlikely that the hike would dampen the property market. The property outlook in Malaysia remains positive with a strong take-up rate across all sectors.

The New Economic Model that was announced by our Prime Minister Dato’ Sri Najib Tun Abdul Razak will also help steer the growth of Malaysia’s economy. On the international front, SunCity’s strategy to expand further in China and India is further complemented by both of the countries’ robust economic outlook at a gross domestic product growth of 9.6% and 8.2% respectively (as forecasted by the Asian Development Bank).

As highlighted earlier, SunCity’s “Best of Both Worlds” business model has enabled us to leverage on the stable income generated from our property investment activities to fund our high-growth property development business.

With the vast majority of our investment assets achieving good yields, it is clearly the right time to move up the value chain. As part of our growth strategy, we are now prepared to unlock the value of these investment assets by injecting them into a Real Estate Investment Trust (“REIT”). We see the REIT as an opportunity to re-invest the proceeds for new investment properties and boost our Property Development division. The REIT strategy will place us in a unique position of being Malaysia’s first integrated real estate conglomerate.

Our solid track record has led us to remain in the top 10 of The Edge Top Property Developers Award list for 7 consecutive years. As such, it is a natural progression for SunCity to spread its wings to the region and be a top property developer in the region. To this end, SunCity aims to achieve 50% of its revenue from overseas projects within a span of 5 years.

SunCity intends to replicate its success in Malaysia in the overseas market by consolidating its years of knowledge and expertise in building quality residential and commercial properties. In this respect, SunCity has expanded its reach in 2 of the world’s most populous countries, namely India and China, with new property development projects.

We are proud to have been selected by Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd (“SSTEC”) to participate in their 30 square kilometers Tianjin Eco-City project in China. We have signed a Collaboration Agreement with SSTEC on 30 April 2010. This is a further affirmation of our strong track record as we are the only Malaysian developer amongst other leading international property players from Hong Kong, Taiwan, Japan, Singapore and China.

SunCity will develop 102 acres of land within Tianjin Eco-City and incorporate the LOHAS concept, making it the first of its kind project in China. This project is expected to be developed over a period of 5 years and has an estimated gross development value of RM5 billion.

To fortify our position in the international property scene, it is equally important to have competent and experienced managers to lead the team forward. I am especially grateful for Mr Ngian Siew Siong’s efforts in taking on the very important task of focusing and growing the Group into a global property conglomerate. With his wealth of experience and astute understanding of the property sector, I am confident that Mr Ngian will provide enormous value in growing and developing the International Property Development division.

Other than the Property Development division, our Hospitality division, Sunway International Hotels & Resorts, is also on track with its regional expansion plans. We have been appointed by Perfect (China) Co. Ltd to manage the Golden Diamond Hotel in Zhongshan, China. In addition, we also have a shopping mall management contract with Yitian

Holiday Plaza in Shenzhen, China. The shopping mall which was launched in September 2008 is fully tenanted with various local and international brands. This provides us with an opportunity to further expand our Property Investment and Hospitality divisions as well as share our expertise and knowledge globally.

SunCity continued to strengthen its local presence with the successful launch of Sunway SPK 3 Harmoni Garden Homes. The townhouse offering received overwhelming response with 80% of its units sold within a week of its launch.

In the pipeline is Sunway VeloCity, a RM1.5 billion vibrant integrated development comprising service apartments, business suites, retail spaces and a lifestyle shopping mall. Spread over 22 acres of prime freehold land, it is strategically located within 5 kilometers from the Kuala Lumpur city centre. This exciting development is set to transform the skyline of Kuala Lumpur South.

Aligned with the Group’s strategy to acquire land banks in attractive locations, we will continue to review potential land banks to extract greater value.

Apart from this, the Group will also be adding more high-yielding investment assets to its portfolio including a 28-storey mixed use commercial building with office and retail elements and 1,027 parking bays adjacent to Sunway Pyramid, and a 25-storey office building located between the 2 main arterial roads in Sunway Integrated Resort City. Both proposed developments would improve the commercial and retail opportunities of Sunway Integrated Resort City.

I am delighted to announce that once again, SunCity has been honoured with a selection of important awards and accolades that recognises our contributions and achievements in the marketplace.

For the seventh consecutive year, the Group was awarded The Edge’s Top Property Developers Award. This is a prestigious honour as this award is a benchmarking tool that ranks the country’s best property players in terms of financial performance, quality, innovation, creativity and value creation for buyers.

Also, for the third consecutive year, we have been recognised as Malaysia’s Most Valuable Brands (“MMVB”) by the Association of Accredited Advertising Agencies Malaysia (4As) in collaboration with Interbrand. MMVB is a brand valuation and benchmarking exercise of high performing Malaysian brands.

SunCity’s excellent brand performance is further reaffirmed as it won the Silver Award in the property category awarded at the inaugural Putra Brand Awards 2010. The Putra Brand Awards are the only brand awards in the country endorsed by the Malaysia External Trade Development Corporation (MATRADE) and supported by the Branding Association of Malaysia (BAM), Malaysian Advertisers Association (MAA) and Media Specialists Association (MSA).

On top of that, SunCity bagged 2 awards in the National Annual Corporate Report Awards (“NACRA”). Apart from winning its third consecutive Industry Excellence Awards in the ‘Properties, Hotels and Trusts Category’, the Group also took home its first Silver Award for ‘Best Annual Report in Bahasa Malaysia’. The NACRA is the nation’s foremost award in recognition of excellence in annual corporate reporting. Acquiring this award is an acknowledgement of the Group’s high standard of corporate reporting for greater transparency and accountability.

Before I conclude, I would like to take this opportunity to acknowledge the hard work and contributions of SunCity’s management and staff. Their tireless efforts and dedication to grow SunCity is indeed admirable and I hope that they will continue to share their ideas to ensure that we stay ahead in the marketplace. I would also like to thank our valued stakeholders; including our customers, business associates, bankers, government authorities and shareholders for your continuous support in SunCity.

Yours Sincerely,
Tan Sri Dato’ Seri Dr Cheah Fook Ling, AO
Executive Chairman
30 April 2010

Back to top