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S P Setia to gain RM393.6m pre-tax profit in FY20, says HLIB Research

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KUALA LUMPUR (Dec 18): Hong Leong Investment Bank Research is expecting S P Setia Bhd to recognise a profit before tax of RM393.6 million in FY20 based on its 40% stake in Battersea Phase 2 Holding Company Ltd (Battersea Phase 2 Holdco).

"We tweak our FY20 earnings upwards slightly by 1% to RM720.2 million as we update the sale proceeds (note that we have already imputed most of the contribution from Battersea Phase 2 Holdco).

"We maintain our 'buy' recommendation with an unchanged target price of RM3.03 based on unchanged discount of 50% to revalued net asset value of RM6.06," the research team said in a note today.

Yesterday, S P Setia and Sime Darby Property Bhd announced they're selling their stakes in the Phase 2 commercial assets at the Battersea Power Station site in London to PNB-Kwasa International 2 Ltd for £1.583 billion (RM8.35 billion).

S P Setia and Sime Darby Property hold 40% stake respectively in Battersea Phase 2 Holdco, a wholly-owned subsidiary of Battersea Project Holding Company Ltd. The remaining 20% is owned by the Employees Provident Fund (EPF).

Meanwhile, PNB-Kwasa International 2 is 65% owned by Permodalan Nasional Bhd (PNB) and 35% by the EPF.

As at 11.47am, S P Setia's share price dropped 3.35% or 8 sen to RM2.31. theedgemarkets.com

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