Hong Leong Investment Bank Bhd (HLIB) said in a note that the current data centre boom is providing property developers with a new avenue for monetising suitable land banks, as seen from the recent surge in land transactions in the data centre space.

Equalbase will acquire two parcels of land spanning 25.9 hectares in Sunway City Iskandar Puteri (SCIP) in Johor for data centre development.

“We are positive on this development, as Sunway has capitalised on this trend and seized the opportunity to monetise its land bank at a very attractive price,” it said.

At 11.45am, Sunway shares advanced 3.39%, or 13 sen, to RM3.96 with 11.92 million shares changing hands.

HLIB has maintained its “buy” call for Sunway with a target price (TP) of RM4.30.

Meanwhile, MIDF Amanah Investment Bank Bhd (MIDF Amanah) downgraded Sunway, citing limited upside for the group following an 86% surge in its share price this year.

The investment bank downgraded its “buy” call to “neutral” with an unchanged TP of RM3.98.

MIDF Amanah made no changes to its earnings forecast for the financial years of 2024 (FY2024), FY2025 and FY2026, as land sales gains, if any, will be excluded from its core net income estimates.

“We see positive earnings prospects for Sunway due to earnings recognition from its project in Singapore.

“Additionally, earnings contribution from the healthcare division should remain encouraging due to the increase in bed capacity,” it added.

As at 12.29pm, Sunway’s share price was up by 12 sen or 3.13% at RM3.95, giving the group a market capitalisation of RM22.46 billion.