Sunway Construction will share 35% net profits with YOU.

Yes, the YOU here would refer to anyone who has units of Sunway Construction Group Bhd which is in the process of listing on the Main Market of Bursa Malaysia. The plan is to pay out at least 35 percent of its net profit to investors as dividends and it will be a policy. Based on the number of shares and a retail price of RM1.20 per share, the total market capitalisation would be at around RM1.55 billion upon listing. Indeed, another RM1 billion company listed in Bursa Malaysia. The retail offer has opened on 29 June and will close on 6 July. Sunway Bhd will retain a 51 percent stake so as to have a controlling interest in the business direction.
If you are buying, you may be glad to know that the following cornerstone investors are buying as well. They are Great Eastern Takaful Bhd, Great Eastern Life Assurance (Malaysia) Bhd, UOB Asset Management (Malaysia) Bhd, Overseas Assurance Corp (Malaysia) Bhd, Maybank Asset Management Sdn Bhd, Hong Leong Asset Management Bhd, Affin Hwang Asset Management Bhd, Maybank Islamic Asset Management Sdn Bhd, RHB Asset Management Sdn Bhd and Asian Islamic Investment Management Sdn Bhd.
Companies which can guarantee a good dividend policy would be companies which are quite established. The higher the guaranteed dividend policy, the more stable the company is with regards to its performance. Note though that higher dividend policy does not necessary mean that the company is earning huge profits. It may even mean that the company does not need too much funds to expand. Thus huge growth may be limited. As for 35 percent as a dividend payout, it is considered above the usual but is not considered very high. This may mean Sunway Construction continue to need funds to reinvest its profits into its business to grow even larger and thus higher profits in future. I would personally rate a dividend policy of 50 percent or higher as high. So, higher potential growth versus a stable and high dividend payout, you just have to balance what you love more and invest accordingly. At this point in time, I have not taken any action with regards to this IPO. Happy investing.
written on 3 July 2015
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