SP Setia’s 1HFY12 results were within our and consensus expectations, accounting for 48.4% and 46.5% of our and consensus’ FY12 net profit forecasts. Y-o-y revenue was 9.2% higher while net profit rose by a smaller 7.9% due to a slightly higher effective tax rate. We maintain our forecasts and Trading Buy call, with an unchanged FV of RM4.34, based on 2.3x FY12 P/NTA, which is equivalent to the stock’s 5-year historical average P/NTA.
Largely within. SP Setia’s net profit of RM166.4m for 1HFY12 made up about 48.4% and 46.5% of our and consensus’ expectations. Revenue went up by 9.2% y-o-y, attributed to higher progress billings from its on-going projects. However, net profit grew
at a slower 7.9% y-o-y owing to a higher effective tax rate of 28.8% in 1HFY12 vs 25% in 1HFY11. In 1HFY11, SP Setia recorded a gain on disposal of investment property estimated at about RM30m. Excluding this gain, its core net profit would have been higher by more than 20% y-o-y, supported by improved margins. The ongoing projects which contributed to the company’s bottom- and top-lines were Setia Alam and Setia Eco-Park, Setia Walk, Setia Sky Residences, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru and Setia Pearl Island, Setia Vista and Setia Greens in Penang. Due seasonal factors, the company’s 2QFY12 revenue and net profit surged 36.5% and 24.8% q-o-q respectively.
at a slower 7.9% y-o-y owing to a higher effective tax rate of 28.8% in 1HFY12 vs 25% in 1HFY11. In 1HFY11, SP Setia recorded a gain on disposal of investment property estimated at about RM30m. Excluding this gain, its core net profit would have been higher by more than 20% y-o-y, supported by improved margins. The ongoing projects which contributed to the company’s bottom- and top-lines were Setia Alam and Setia Eco-Park, Setia Walk, Setia Sky Residences, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru and Setia Pearl Island, Setia Vista and Setia Greens in Penang. Due seasonal factors, the company’s 2QFY12 revenue and net profit surged 36.5% and 24.8% q-o-q respectively.
1HFY12 new sales hit RM1.81bn. SP Setia has set a sales target of RM4bn for FY12. As at end-1HFY12, it had locked in RM1.81bn worth of new sales, which was about 29% higher y-o-y. The strong sales performance in FY12 was due to a combination of sustained sales contribution from its established projects in the Klang Valley, Johor Bahru and Penang, as well as sales from KL Eco City and 18 Woodsville in Singapore, which were launched recently. As its maiden foray into East Malaysia via Aeropod in
Sabah also registered strong take-up, we expect the group’s sales performance in 2HFY12 to strengthen further.
Sabah also registered strong take-up, we expect the group’s sales performance in 2HFY12 to strengthen further.
Maintain Trading Buy. We maintain our forecasts and Trading Buy recommendation on SP Setia, with an unchanged FV of RM4.34, based on 2.3x FY12 P/NTA, which is equivalent to its 5-year historical average P/NTA. We believe the strong financial backing from its shareholders should enable SP Setia to enlarge its presence overseas.
Source: OSK
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