PETALING JAYA: S P Setia Bhd is well on track to hit its sales target of RM4.2bil for its current financial year ending Dec 31, 2023, given the strong demand for its products so far.
Kenanga Research in a report noted that the property developer’s sales had already hit RM3.9bil for the nine-month period ended Sept 30, 2023.
“The upcoming months may see a surge in interest for its Johor products, thanks to the anticipated completion of the Singapore-Johor Baru Rapid Transit System Link in 2026. On top of that, the support from the RM548mil Tebrau land sales to Scientex Bhd
would be in place, albeit in 2024.”
Last week, S P Setia announced that it was disposing of 17.99 acres of land in Setia City to KSL Bestari Sdn Bhd for a total consideration of RM228.8mil.
MIDF Research noted that the land disposal is part of S P Setia’s asset monetisation exercise, as well as to unlock the value of its landbank.
“S P Setia is expected to realise a disposal gain of RM140.6mil from the sale. Meanwhile, proceeds from the disposals are expected to be utilised for funding new projects and to pare down gearing.”
The research house noted that net gearing is expected to improve to 0.56 times from 0.57 times in the third quarter of 2023, following the disposal of the land.
Hong Leong Investment Bank (HLIB) Research said it expects further improvement for S P Setia in 2024 on the back of the group’s land sales.
“Should the land sales materialise, the group is also expected to recognise substantial gains in 2024,” it said.
As at Sept 30, 2023, S P Setia secured a total booking of RM450mil. For the third quarter ended Sept 30, 2023, the property developer’s net profit stood at RM51.8mil.
HLIB Research said it is maintaining a “hold” call on the company with an unchanged target price of 77 sen.
