KUALA LUMPUR: SP Setia Bhd’s 4QFY16 profit after tax and minority interest surged by 217% bringing full year of FY16 to RM808mil, accounting for 123% of Hong Leong Investment Bank (HLIB) Research's forecast and 120% of consensus estimate.
The research house said the stronger result was mainly due to faster than expected delivery of Phase 1 units in Battersea Power Station (two blocks had been delivered versus its assumption of one block).
“We raise our FY17 earnings forecasts by 8% but reduce FY18 earnings projection by 12% mainly due to our adjustment in the timing handover of Battersea Power Station project,” HLIB said.
It added that SP Setia was currently trading at close to average P/RNAV band with consistent dividend yield of 4%.
It said potential upside would emanate from further landbanking activities and potential M&A opportunities.
“We raise our RNAV by 6% after factoring in the recent land acquisition on Seberang Prai, Penang.
“Maintain ‘hold’ with target price increased from RM3.11 to RM3.29 based on unchanged 35% discount to RNAV of RM5.07,” HLIB said.
To recap, for the full year FY16, sales achieved RM3.8bil exceeding company full year sales target of RM3.5bil.
Going into FY17, SP Setia sets a sales target of RM4bil comprise of 77% from local sales and 23% from international sales.This is on the back of RM5.4bil worth of target GDV launches.
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