SP Setia’s 1HFY10/11 core net profit was in line, being 88% of our forecast and consensus when annualised. 2H is historically much stronger. The group racked up RM1.4bn property sales during the period, well on track for its full-year target of RM3bn. We are adjusting our FY11-13 EPS numbers down by 3-8% as the dilutive impact of the RM885m 15% private placement more than offsets the higher-than-expected selling prices for KL EcoCity. FY11-13 core net profit is raised 4-15%.
We maintain our BUY recommendation and target price of RM5.37 based on an unchanged 30% premium over its FD RNAV of RM4.13. Potential re-rating catalysts include 1) continued robust sales, 2) newsflow on landbanking and 3) strong earnings growth. SP Setia remains a core holding in the property sector.
We maintain our BUY recommendation and target price of RM5.37 based on an unchanged 30% premium over its FD RNAV of RM4.13. Potential re-rating catalysts include 1) continued robust sales, 2) newsflow on landbanking and 3) strong earnings growth. SP Setia remains a core holding in the property sector.
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