Alliance DBS Research maintains ”Buy” call on SP Setia Bhd


Alliance DBS Research maintains ''Buy'' call on SP Setia Bhd

KUALA LUMPUR, Dec 11  — Alliance DBS Research has maintained a “buy” call on SP Setia Bhd with a target price of RM4.10 following the release of the company’s results for the fourth quarter ended Oct 31, 2015.

SP Setia Bhd’s pre-tax profit surged to RM1.12 billion for the 12-month period from RM722.44 million in the same period a year ago.

Revenue jumped to RM5.61 billion from RM3.81 billion previously.

In a research note, Alliance DBS said the result met the expectations and SP Setia is seen to have strong earnings visibility supported by its RM9.5 billion unbilled sales.

The property company’s strategy to launch more mid-priced range products in its township developments bode well for its sales given strong demand for lifestyle landed properties with good infrastructure and amenities, said Alliance DBS.

“SP Setia is also set to enjoy a revenue boost from its overseas projects with RM5.2 billion sales to be recognised progressively over the next few years,” it added.

Meanwhile, Affin Hwang Capital maintained a ‘hold’ call on SP Setia with a target price of RM3.25.

“We like SP Setia for its strategic land bank, high unbilled sales of RM9.5 billion, as well as, wide range of offerings,” it said.

The research house said, the relatively soft property market could lead to weaker sales, nevertheless, SP Setia’s focus on township development would make it less vulnerable to weaker sentiment, judging by the strong demand for its recent launches, added Affin Hwang.

As at lunch break, SP Setia’s shares were traded at RM3.09 with 1.74 million shares exchanging hands.



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