KUALA LUMPUR (Mar 26): Property developer S P Setia Bhd expects sales to be more robust in the second half of 2015, following the implementation of the goods and services tax on April 1.
Datuk Khor Chap Jen, acting president and chief executive officer of S P Setia (fundamental: 1.4; valuation: 1.2), said the GST has caused some uncertainty in the property market.
He noted there was no pre-GST rush to purchase properties ahead of the implementation of the value-added tax, as buyers have postponed their big ticket purchases.
“The GST is causing a lot of uncertainty. A lot of people are adopting a wait-and-see approach, to see how the GST would affect them. They are holding back purchases of big ticket items, and property is one of them.
“We do foresee that about two months after GST, things will normalise. We think that second half of the year, the purchases will pick up again, given the right products,” said Khor at press conference, after the group’s annual general meeting today.
For 2015, he said S P Setia will be selective in its product offering, focusing more on landed mid-range products priced RM800,000 and below.
Out of its sales target of RM4.6 billion for the year, S P Setia expects local sales to account for approximately RM2.8 billion or 60% of its total sales, driven by its developments in Penang, Klang Valley and Johor.
Meanwhile, the balance 40% or RM1.8 billion will comprise sales of its foreign developments, supported mainly by its Battersea Power Station project.
At 2.47pm, S P Setia was unchanged at RM3.45. Its market capitalisation was RM8.77 billion.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)