SP Setia will offer new launches worth RM2.5 billion in various townships of which the majority are located in the central region, particularly in Setia Alam Impian and Setia Eco Hill.
KUCHING: SP Setia Bhd’s (SP Setia) financial results for its first half of 2021 (1H21) were generally within expectations as analysts expect better earnings outlook for the rest of its financial year 2021 (FY21) on the back of a healthy orderbook and gradual reopening of the economy.
In a report, the research team at AmInvestment Bank Bhd (AmInvestment) noted that for 2HFY21, SP Setia will offer new launches worth RM2.5 billion in various townships of which the majority are located in the central region, particularly in Setia Alam Impian and Setia Eco Hill.
“These would be supported by the ongoing home ownership campaign and government incentives such as full stamp duty exemption for properties below RM1 million and minimum 10 per cent purchase price discount.
“The company has also secured RM954 million bookings as at June 30, 2021 and remains focused on converting these bookings into sales,” it said.
“We expect the group’s FY21F to FY23F earnings growth to be supported by its strong unbilled sales of RM10.3 billion (compared with RM9.7 billion year-on-year) which translates to 2.4-folds FY21F sales, together with improving overseas contribution and inventory clearing efforts.
“Hence, we believe SP Setia is well positioned to ride on a likely post-pandemic sector recovery, underpinned by a diversified portfolio in both local and international market,” it added.
On its 1HFY21 results, AmInvestment noted that the company registered a 1HFY21 net profit of RM150 million compared to a net loss of RM179 million y-o-y.
SP Setia’s y-o-y 1HFY21 revenue doubled, supported by an eight per cent rise in progress billings; and 3.1-folds surge in property sales which helped to offset the declines in construction and investment properties.
It also noted that SP Setia chalked up new sales of RM2.7 billion in 1HFY21 (compared with RM875 million in 1HFY20), attaining 71 per cent of its unchanged sales target of RM3.8 billion.
“This impressive performance was driven by local projects which secured 76 per cent of 1HFY21 new sales. Klang Valley accounted for 60 per cent of local sales, in which townships located at Setia Alam and Bandar Kinrara contributed 25 per cent to central region sales while the remaining came from the southern region,” it said.
For international projects, which consisted of 24 per cent of 1HFY21 total group sales, the research team pointed out that Daintree Residence, Singapore was the main contributor.