S P Setia 'bumper earnings' seen — RHB

KUALA LUMPUR (Nov 16): S P Setia Bhd is expected to see strong fourth quarter earnings, due to the handover of the property developer's two overseas projects, according to RHB Research Institute Sdn Bhd. 
 
"We are confident that 4Q results would be stronger, as Parque Melbourne and Battersea Power Station (Phase 1) would be completed in November and December," RHB analyst Loong Kok Wen wrote in a note today. 

She said S P Setia's "bumper earnings" should be supportive of a good dividend by the company. RHB's note followed S P Setia's announcement of its financials for the third quarter ended September 30, 2016 (3QFY16).

Yesterday, S P Setia said it posted a RM134.07 million net profit on RM1.26 billion revenue during 3QFY16. Cumulative 9MFY16 net profit stood at RM383.24 million on revenue of RM3.19 billion.

There were no year-on-year comparable figures, as the group had changed its financial year end last year from Oct 31 to Dec 31.

Today, Loong said S P Setia's 9MFY16 earnings was below expectations, due to its overseas projects' handover timing.

"We make no changes to our earnings projection. Future earnings would be underpinned by RM8.39 billion unbilled sales (vs RM8.2 billion as at 2Q). Maintain BUY, with unchanged TP (target price) of MYR4.00, based on 20% discount to RNAV (revalued net asset value)," she said.

At 11:29 a.m., S P Setia shares fell five sen or 1.6% to RM3.15, which values the company at RM9.02 billion. S P Setia's latest reported net assets per share stood at RM2.68.

Loong said RHB had an estimated RNAV/share of RM5.03 for S P Setia. — theedgemarkets.com