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S P Setia
Still going strong
• We are maintaining our BUY rating on SP Setia Bhd with our fair value unchanged at RM6.80/share, based on a 5% discount to our fully-diluted (FD) NAV estimate of RM7.16/share.
• SP Setia’s latest figures – November sales of RM295mil – show that sales momentum remains strong. This represents a solid 47% growth MoM although stable vis-a-vis the same month last year.
• Sales continue to be driven by township projects in the Klang Valley i.e. Setia Eco Park and Setia Alam where there is still ample landbank available – a combined area of circa
1,400acres with remaining GDV of RM5bil-RM6bil.
• Going forward, we expect SP Setia to generate a record high pre-sales of RM3bil, to be underpinned by its two integrated commercial projects KL Eco City and Setia City, apart
from the existing township developments.
• We continue to be bullish particularly about KL Eco City – given its design niche, first mover advantages and market reach. We believe the market may have under-appreciated
the deep-embedded value of KL Eco City, given the current bearish consensus view on condominium and office space due to concerns about supply.
• KL Eco City, with a GDV of RM6bil or an average pricing of RM1,000psf, is targeted for official launch in January or February 2011. The group would kick off things with the
development of the strata and boutique offices.
• Meanwhile, the first of the three residential towers may be launched some time in June 2011, with about 711 units on offer at pricing of between RM900psf and RM1,200psf.
• Lastly, despite all the recent M&A activities in the property sector, SP Setia would continue to be among the favourites for investors given its excellent track record and solid
execution.
Still going strong
• We are maintaining our BUY rating on SP Setia Bhd with our fair value unchanged at RM6.80/share, based on a 5% discount to our fully-diluted (FD) NAV estimate of RM7.16/share.
• SP Setia’s latest figures – November sales of RM295mil – show that sales momentum remains strong. This represents a solid 47% growth MoM although stable vis-a-vis the same month last year.
• Sales continue to be driven by township projects in the Klang Valley i.e. Setia Eco Park and Setia Alam where there is still ample landbank available – a combined area of circa
1,400acres with remaining GDV of RM5bil-RM6bil.
• Going forward, we expect SP Setia to generate a record high pre-sales of RM3bil, to be underpinned by its two integrated commercial projects KL Eco City and Setia City, apart
from the existing township developments.
• We continue to be bullish particularly about KL Eco City – given its design niche, first mover advantages and market reach. We believe the market may have under-appreciated
the deep-embedded value of KL Eco City, given the current bearish consensus view on condominium and office space due to concerns about supply.
• KL Eco City, with a GDV of RM6bil or an average pricing of RM1,000psf, is targeted for official launch in January or February 2011. The group would kick off things with the
development of the strata and boutique offices.
• Meanwhile, the first of the three residential towers may be launched some time in June 2011, with about 711 units on offer at pricing of between RM900psf and RM1,200psf.
• Lastly, despite all the recent M&A activities in the property sector, SP Setia would continue to be among the favourites for investors given its excellent track record and solid
execution.
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