SPSETIA (8664) : SP Setia - Still top dog in property sector
Target RM3.34 (Stock Rating: HOLD)
SP Setia’s FY10/14 results were in line as final core net profit made up 97% of our forecast and 101% consensus’s estimates. New sales of RM4.6bn were 44% lower yoy and missed its full-year sales target of RM5bn by 8%. We fine-tune our EPS forecasts for housekeeping purposes, but keep our target price basis of a 25% discount to RNAV (lowered slightly from RM4.51 to RM4.45). SP Setia continues to be a Hold as the timing of its key re-rating catalyst, i.e. potential M&A activity, remains uncertain. Our picks for property sector exposure remain Mah Sing Group and Eco World Development.
Final results in line
Final results were in line with expectations, as core net profit came in only 3% below our forecast and 1% above consensus. But SP Setia disappointed on the dividend front as it proposed a final dividend of 5.7 sen, bringing the full year to 9.7sen, below our forecast of 12 sen.
FY14’s new sales of RM4.6bn
The group chalked up RM4.6bn in sales in FY14 (Nov 13 to Oct 14), an 8% decline yoy. The Klang Valley was still the largest contributor to new sales (RM2.1bn or 45%), while Johor came in a distant second (RM500m or 11%). Penang and Sabah contributed a combined RM224m or 5%, while overseas projects (Singapore, Melbourne and London) contributed RM1.8bn or 39%. 4Q sales fell 33% qoq to RM0.9bn as 3Q was boosted by the launch of Phase 2 of the Battersea project in London. Unbilled sales increased from RM10.8bn in 3Q to RM11.1bn.
Analysts briefing highlights
SP Setia held its usual analysts briefing during which acting CEO Dato' Voon Tin Yow ran through the group's performance in FY14 and its targets for FY15. There were no major surprises from the briefing. The group is aiming to maintain sales at RM4.6bn in FY15, with a local:foreign split of 60:40. It is targeting to launch two new projects in the next financial year including Setia Eco Templer and Setia Sky Vista. Setia Eco Templer has a GDV of RM1.9bn and is a residential-cum-commercial project, with residential units priced between RM700k and RM2m. Setia Sky Vista is a condo in Penang located 5 minutes from the Bayan Lepas Free Trade Zone, with a GDV of RM320m.
Source: CIMB Daybreak - 17 December 2014
Target RM3.34 (Stock Rating: HOLD)
SP Setia’s FY10/14 results were in line as final core net profit made up 97% of our forecast and 101% consensus’s estimates. New sales of RM4.6bn were 44% lower yoy and missed its full-year sales target of RM5bn by 8%. We fine-tune our EPS forecasts for housekeeping purposes, but keep our target price basis of a 25% discount to RNAV (lowered slightly from RM4.51 to RM4.45). SP Setia continues to be a Hold as the timing of its key re-rating catalyst, i.e. potential M&A activity, remains uncertain. Our picks for property sector exposure remain Mah Sing Group and Eco World Development.
Final results in line
Final results were in line with expectations, as core net profit came in only 3% below our forecast and 1% above consensus. But SP Setia disappointed on the dividend front as it proposed a final dividend of 5.7 sen, bringing the full year to 9.7sen, below our forecast of 12 sen.
FY14’s new sales of RM4.6bn
The group chalked up RM4.6bn in sales in FY14 (Nov 13 to Oct 14), an 8% decline yoy. The Klang Valley was still the largest contributor to new sales (RM2.1bn or 45%), while Johor came in a distant second (RM500m or 11%). Penang and Sabah contributed a combined RM224m or 5%, while overseas projects (Singapore, Melbourne and London) contributed RM1.8bn or 39%. 4Q sales fell 33% qoq to RM0.9bn as 3Q was boosted by the launch of Phase 2 of the Battersea project in London. Unbilled sales increased from RM10.8bn in 3Q to RM11.1bn.
Analysts briefing highlights
SP Setia held its usual analysts briefing during which acting CEO Dato' Voon Tin Yow ran through the group's performance in FY14 and its targets for FY15. There were no major surprises from the briefing. The group is aiming to maintain sales at RM4.6bn in FY15, with a local:foreign split of 60:40. It is targeting to launch two new projects in the next financial year including Setia Eco Templer and Setia Sky Vista. Setia Eco Templer has a GDV of RM1.9bn and is a residential-cum-commercial project, with residential units priced between RM700k and RM2m. Setia Sky Vista is a condo in Penang located 5 minutes from the Bayan Lepas Free Trade Zone, with a GDV of RM320m.
Source: CIMB Daybreak - 17 December 2014
