Published: Friday June 22, 2012 MYT 8:55:00 AM
Public Invest Research maintains Outperform on SP Setia, RM4.40 TP
KUALA LUMPUR: Public Invest Research is maintaining its Outperform call on SP Setia with a target price of RM4.40.
It said on Friday, the RM4.40 target price is at a 10% discount to RNAV of RM4.87.
“SP Setia netted RM92.4mil in Q2 FY12 (+0.2% on-year, +24.8% on-quarterq) which was within our expectations. Year-to-date net profit was RM166.4mil, making 51.7% and 34.5% of our and the consensus full year estimates.
“Unbilled sales reached record high for the group with RM4.8bil and net gearing was healthy at 0.3 times,” it said.
Public Invest Research said the RM4bil sales target was on track. It said the annual sales target was still achievable in its view with contributions from Johor (RM1bil), Bandar Setia Alam/Setia Eco Park (RM1bil), KL EcoCity (RM1bil) and the remaining from the projects in Penang, Sabah and overseas projects.
New projects included Aeropod (Sabah), 18 Woodsville (Singapore) and 11 Brook Residences (Penang) which are more than 50% booked.
The research house said as for the Battersea Urban Renewal Project, SP Setia believes it could overcome the issues plaguing the previous owners of the Battersea redevelopment project namely financing, selling risk and land issues by riding on its strategic partners (Sime and possibly EPF) strong balance sheets, tapping on its existing 100,000 Malaysian costumers database and the fact that infrastructure plans for the project are already in place which could expedite development process.
“The GDV could be as high as RM40bil, comprising 3.5m sf apartments, 0.5m sf of social housing and the remaining will be retail, offices, etc. The land deal should be finalized by 4 Jul. No change to our RNAV for now,” it said.