DESCRIPTION
The most profitable developer with landbank in the key growth areas, namely the Klang Valley, Penang and Johor.
12-Month Target Price
RM1.20
Current Price
RM1.09
Expected Return
-9%
Previous Target Price
RM1.30
Market: Main
Sector: Property
Bursa Code: 8664
Bloomberg Ticker: SPSB MK
Shariah-compliant: Yes
SHARE PRICE CHART
1.50
1.30
1.10
0.90
0.70
0.50
Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-2
52 Week Range (RM)
1.00 – 1.50
3-Month Average Vol (‘000
6,067.4
SHARE PRICE PERFORMANCE
| 1M | 3M | 6M | |
|---|---|---|---|
| Absolute Returns | -8.4 | -11.4 | -16.1 |
| Relative Returns | -11.8 | -13.4 | -19.0 |
KEY STOCK DATA
| Market Capitalisation (RMm) | 5,453.4 |
| No. of Shares (m) | 5,003.1 |
MAJOR SHAREHOLDERS
| % | |
|---|---|
| Amanah Saham Nasional | 34.2 |
| Yayasan Pelaburan Bumiputra | 22.4 |
| Kumpulan Wang Persaraan | 9.2 |
Below Expectations
SP Setia’s (SPSB) 2QFY25 net profit came in at RM99.8m (-66.2% YoY, +48.9% QoQ), which was below our and consensus expectations. In 6MFY25, Group net profit of RM166.8m (-55.2% YoY) only constituted about 39% and 32% of our and consensus full year profit estimates, mainly due to lower-than-expected billings and lower margins achieved. On a YoY comparison, its profits from property development segment was down mainly due to lower contributions from land sales of RM407m in 2QFY25, as well as reduced revenue from projects in Australia and Vietnam following substantial handovers of completed developments in similar period in FY24. PBT for 2QFY25 was lower YoY mainly due to the one-off gain from the disposal of land in Glengowrie and Taman Pelangi Indah, as well as higher contributions from Australia and Vietnam in 2HFY24. Elsewhere, SPSB achieved presales of RM1.9bn in 1HFY25, mainly contributed by domestic projects at RM1.42bn, while the Group’s international projects contributed RM480m, or at about 40% of its FY25 sales target of RM4.8bn. Unbilled sales now stands at RM3.9bn. All told, we reduce our FY25-27F earnings estimates by an average of 9%, after adjusting our billing and margins assumptions. Maintain our Neutral call with TP adjusted to RM1.20, (from RM1.30), ascribing ~55% discount to its book value.
1HFY24 revenue and PBT from the property development segment fell by more than 50% to RM1.6bn and RM320m respectively, primarily due to major land sales in Glengowrie and Taman Pelangi Indah, as well as higher contributions from Australia and Vietnam last year following substantial handovers of completed projects. We understand that revenue from land sale in the current period is lower by RM765m YoY, and as such, PBT also decreased in the current period, in line with the lower revenue and partially offset by improved performance from Battersea Power Station.
Sold RM1.9bn in 1HFY25. YTD, the Group has clinched pre-sales totalling RM1.90bn, with domestic projects contributed RM1.42bn, while international projects contributed RM480m. In Malaysia, Central region contributed 52% of the Group’s sales totalling RM955m, while the Southern region accounted for RM430m. On the international front, the Group held a groundbreaking ceremony for its Setia Garden Residences project at its EcoXuan Township in Ho Chi Minh City, Vietnam on 26 July 2025. With a gross development value (GDV) of US$81m (RM381.1m), Setia Garden Residences is scheduled for completion in 2027. Elsewhere, the Group has unbilled sales pipeline of RM3.9bn, underpinned by 42 ongoing projects with a remaining land bank of 5,191 acres, and an effective remaining GDV of RM90bn.
KEY FORECAST TABLE
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F | CAGR (%) |
|---|---|---|---|---|---|---|
| Revenue | 4,373.6 | 5,293.6 | 4,065.0 | 4,283.9 | 4,239.2 | -0.6% |
| Operating Profit | 1,062.8 | 1,564.4 | 899.9 | 909.9 | 925.4 | -2.7% |
| Pre-tax Profit | 655.7 | 1,121.7 | 578.7 | 592.7 | 609.2 | -1.5% |
| Net Profit | 298.6 | 575.7 | 383.2 | 394.8 | 406.8 | 6.4% |
| EPS (Sen) | 6.7 | 11.5 | 7.7 | 7.9 | 8.1 | 4.0% |
| P/E (x) | 16.3 | 9.5 | 14.2 | 13.8 | 13.4 | |
| DPS (Sen) | 1.3 | 2.8 | 1.5 | 1.5 | 1.5 | |
| Dividend Yield (%) | 1.2 | 2.6 | 1.4 | 1.4 | 1.4 |
Source: Company, PublicInvest Research estimates
T 603 2268 3016
F 603 2268 3014
E tan.sianghing@publicinvestbank.com.my
Table 1: Results Review
| FYE Dec (RM m) | 2Q25 | 2Q24 | 1Q25 | YoY chg (%) | QoQ chg (%) | FY24 YTD | FY23 YTD | YTD chg (%) |
|---|---|---|---|---|---|---|---|---|
| Revenue | 943.7 | 1494.6 | 770.7 | -36.9 | 22.5 | 1714.4 | 2970.6 | -42.3 |
| Gross profit | 381.8 | 658.0 | 281.5 | -42.0 | 35.6 | 663.3 | 995.1 | -33.3 |
| EBIT | 310.6 | 596.7 | 235.3 | -47.9 | 32.0 | 545.9 | 876.2 | -37.7 |
| Pretax profit | 195.7 | 466.8 | 141.5 | -58.1 | 38.3 | 337.1 | 648.0 | -48.0 |
| Net profit | 99.8 | 295.0 | 67.0 | -66.2 | 48.9 | 166.8 | 372.4 | -55.2 |
Margins (%):
| 2Q25 | 2Q24 | 1Q25 | ||||||
|---|---|---|---|---|---|---|---|---|
| Gross profit | 40.5 | 44.0 | 36.5 | 38.7 | 33.5 | |||
| EBIT | 32.9 | 39.9 | 30.5 | 31.8 | 29.5 | |||
| Net profit | 10.6 | 19.7 | 8.7 | 9.7 | 12.5 |
Source: Company, PublicInvest Research estimates
KEY FINANCIAL DATA
INCOME STATEMENT DATA
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Revenue | 4,373.6 | 5,293.6 | 4,065.0 | 4,283.9 | 4,239.2 |
| Operating Profit | 1,062.8 | 1,564.4 | 899.9 | 909.9 | 925.4 |
| Other Gains / (Losses) | -58.0 | -58.3 | -16.7 | -16.7 | -16.7 |
| Finance Costs | -349.1 | -384.4 | -304.5 | -300.5 | -299.5 |
| Pre-tax Profit | 655.7 | 1,121.7 | 578.7 | 592.7 | 609.2 |
| Income Tax | -298.6 | -491.2 | -138.9 | -142.3 | -146.2 |
| Effective Tax Rate (%) | 45.5 | 43.8 | 24.0 | 24.0 | 24.0 |
| Minorities | -58.5 | -54.7 | -56.6 | -55.7 | -56.2 |
| Net Profit | 298.6 | 575.7 | 383.2 | 394.8 | 406.8 |
Growth
| 2023A | 2024A | 2025F | 2026F | 2027F | |
|---|---|---|---|---|---|
| Revenue (%) | -1.8 | 21.0 | -19.4 | 0.4 | -1.0 |
| Operating Profit (%) | 30.4 | 47.2 | -39.1 | -0.5 | 2.9 |
| Net Profit | -3.1 | 92.8 | -26.4 | 0.1 | 5.0 |
Source: Company, PublicInvest Research estimates
BALANCE SHEET DATA
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Property, Plant & Equipment | 814.6 | 751.8 | 774.3 | 797.6 | 821.5 |
| Cash and Cash Equivalents | 3,959.30 | 3,141.5 | 2,840.7 | 2,872.7 | 2,710.1 |
| Receivables | 695.7 | 499.8 | 619.3 | 622.0 | 684.3 |
| Other Assets | 24,310.00 | 23,210.7 | 23,261.1 | 23,339.7 | 23,627.1 |
| Total Assets | 29,779.60 | 27,603.8 | 27,495.5 | 27,632.0 | 27,843.0 |
| Payables | 2,657.10 | 2,438.1 | 2,588.2 | 2,592.0 | 2,583.0 |
| Borrowings | 11,019.40 | 8,586.5 | 8,580.1 | 8,463.5 | 8,436.2 |
| Retirement Benefits | 0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Other Liabilities | 641.7 | 735.6 | 735.6 | 735.6 | 735.6 |
| Total Liabilities | 14,318.20 | 11,760.1 | 11,903.8 | 11,791.0 | 11,754.8 |
| Shareholders’ Equity | 12,644.05 | 13,323.03 | 13,070.94 | 13,320.27 | 13,339.84 |
| Total Equity and Liabilities | 29,779.60 | 27,603.8 | 27,495.5 | 27,632.0 | 27,843.0 |
Source: Company, PublicInvest Research estimates
PER SHARE DATA & RATIOS
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Book Value Per Share | 2.5 | 2.7 | 2.6 | 2.7 | 2.7 |
| NTA Per Share | 2.5 | 2.7 | 2.6 | 2.7 | 2.7 |
| EPS (Sen) | 6.7 | 11.5 | 8.5 | 8.5 | 8.9 |
| DPS (Sen) | 1.3 | 2.8 | 1.5 | 1.5 | 1.5 |
| Payout Ratio (%) | 19.4 | 24.3 | 17.7 | 17.7 | 16.9 |
| ROA (%) | 1.0 | 2.1 | 1.5 | 1.5 | 1.6 |
| ROE (%) | 2.4 | 4.3 | 3.2 | 3.2 | 3.3 |
Source: Company, PublicInvest Research estimates
RATING CLASSIFICATION
STOCKS
SECTOR
DISCLAIMER
This document has been prepared solely for information and private circulation only. It is for distribution under such circumstances as may be permitted by applicable law. The information contained herein is prepared from data and sources believed to be reliable at the time of issue of this document. The views/opinions expressed herein are subject to change without notice and solely reflects the personal views of the analyst(s) acting in his/her capacity as employee of Public Investment Bank Berhad (“PIVB”). PIVB does not make any guarantee, representations or warranty neither expressed or implied nor accepts any responsibility or liability as to its fairness liability adequacy, completeness or correctness of any such information and opinion contained herein. No reliance upon such statement or usage by the addressee/anyone shall give rise to any claim/liability for loss of damage against PIVB, Public Bank Berhad, its affiliates and related companies, directors, officers, connected persons/employees, associates or agents.
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