Selangor Properties’ property investment division to remain stable despite industry slowdown


KUALA LUMPUR: CGS-CIMB Research expects Selangor Properties Bhd’s main revenue generator – property investment – to remain stable and continue to contribute positively in 2018. 

The property investment division in Malaysia is experiencing a slowdown due to oversupply of commercial and office space while the situation in Australia is stabilising. 

“We also project the property development division’s earnings to pick up in the future due to unit sales of AIRA Residence and the ongoing construction progress,” it said in a note on Friday.

The research house said the overall property outlook for 2018 remained bleak, amid the unfavourable macro environment. 

The approval freeze on luxury projects (including shopping complexes, offices, serviced apartments and condominiums priced above RM1mil) starting November 1, 2017, low affordability and mismatch between supply and demand, are still risks to private developers’ sales, it said.

The group has put the mixed development Wisma Damansara under review and is reassessing the feasibility of this development.

“Although earnings prospects seem intact in FY18, in our view, the stock is not cheap at 22x FY18 price earnings ratio due to its low ROE,” it said.

It said the key upside risk to its Hold call is faster-than-expected development of its land bank, while the key downside risk is further deterioration in property market sentiment.
 
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Business News

MUI Group's PMC to buy 51% stake in A&W Malaysia
Yinson reports third straight quarterly earnings growth
KPower posts RM37.4mil net profit in FY21, despite Covid-19 setbacks
FBM KLCI broadly higher on bargain-hunting activities
BNM's international reserves at US$116.2bil as at Sept 15
China stocks end higher, Evergrande's assurances lift real estate firms
Maybank, UOB to jointly underwrite RM2bil Islamic facility for Malayan cement
DFIs provide micro-SMEs with financing totalling RM8.1bil
Oil prices rise on tight supply, renewed risk appetite
Citi Malaysia bags multiple banking awards

Stories You'll Enjoy


Vouchers