MBSB
RESEARCH
Thursday 21st. August 2025
S P Setia Berhad 2QFY25 Results Review: Attractive Valuation and Upgrade to BUY
S P Setia Berhad
(8664 | SPSB MK) Main | Property
Compliant
Stars
2QFY25 Results Review
Attractive Valuation
1HFY25 earnings within our expectation. S P Setia 1HFY25 core net income of RM176.8m came in within our expectation but below consensus expectation, making up 45% and 41% of our and consensus full year estimates respectively.
Higher sequential earnings due to land sales gain. On a sequential basis, 2QFY25 core net income climbed to RM110.5m (+64.7%qoq) mainly driven by recognition of Taman Pelangi land sales in 2QFY25. The higher land sales gain has more than enough to offset lower contribution from joint ventures and higher administrative and general expenses.
Lower earnings due to high base effect. On a yearly basis, 2QFY25 core net income declined to RM110.5m (-53.9%yoy) due to high base earnings in 2QFY24. Note that earnings in 2QFY24 were ballooned by higher land sales and bumper profit contribution from projects in Australia and Vietnam following handovers of completed projects. Nevertheless, the improved performance of Battersea Power Station cushioned the lower earnings. Meanwhile, cumulative earnings in 1HFY25 were lower at RM176.8m (-43.4%yoy) due to lower land sales gain and normalised earnings from bumper profit recognition from Australia and Vietnam projects.
New sales at RM1.9b in 1HFY25. S P Setia recorded new sales of RM1.18b in 2QFY25, higher than new sales of RM718m in 1QFY25. That brought total new sales in 1HFY25 to RM1.9b which makes up 40% of new sales target of RM4.8b for FY25. Domestic projects were the key sales contributor, contributing 75% to total sales while international projects contributed 25% to total sales. Meanwhile, land sales contributed to 12% to total new sales in 1HFY25. On the other hand, unbilled sales stood at RM3.9b, providing less than one year earnings visibility.
Upgrade to BUY with an unchanged target price of RM1.25. We maintain our FY25/26/27 earnings forecast. Our TP for S P Setia is unchanged at 1.25, based on 70% discount to RNAV. We upgrade S P Setia to BUY from NEUTRAL as the recent share price weakness presents buying opportunity. Valuation of S P Setia is attractive as it is trading at steep discount of 63% to latest NTA per share of RM2.91.
Upgrade to BUY (from NEUTRAL)
Unchanged Target Price RM1.25
RETURN STATISTICS
| Price @ 20th Aug 2025 (RM) | 1.09 |
| Expected share price return (%) | +14.7 |
| Expected dividend yield (%) | +2.3 |
| Expected total return (%) | +17.0 |
SHARE PRICE CHART
| Price performance (%) | Absolute | Relative |
|---|---|---|
| 1 month | -8.4 | -12.0 |
| 3months | -2.7 | -13.6 |
| 12 months | -16.2 | -13.3 |
INVESTMENT STATISTICS
| FYE Dec | 2025E | 2026F | 2027F |
|---|---|---|---|
| Revenue | 4,262 | 4,800 | 5,035 |
| Operating Profit | 960 | 1,075 | 1,082 |
| Profit Before Tax | 564 | 621 | 686 |
| Core PATAMI | 393 | 433 | 478 |
| Core EPS | 9.37 | 10.32 | 11.39 |
| DPS | 2.50 | 2.50 | 2.85 |
| Dividend Yield | 2.3% | 2.3% | 2.6% |
KEY STATISTICS
| FBM KLCI | 1,588.21 |
| Issue shares (m) | 4,715 |
| Estimated free float (%) | 49.74 |
| Market Capitalisation (RM’m) | 5,453 |
| 52-wk price range | RM0.99- RM1.5 |
| 3-mth average daily volume (m) | 6.07 |
| 3-mth average daily value (RM’m) | 6.90 |
| Top Shareholders (%) | |
| Amanah Saham Nasional Bhd | 28.51 |
| Yayasan Pelaburan Bumiputra | 20.88 |
| EPF | 9.40 |
| KWAP | 7.98 |
Jessica Low Jze Tieng
jessica.low@midf.com.my
03-2173 8391
S P Setia Berhad: 2QFY25 RESULTS SUMMARY
| FYE Dec (RM’m, unless otherwise stated) | Quarterly Results | Cumulative | |||
|---|---|---|---|---|---|
| 2QFY25 | %YoY | %QoQ | FY25 | %YoY | |
| Revenue | 943.7 | -36.9% | 22.5% | 1714.4 | -42.3% |
| Core EBIT | 324.2 | -44.9% | 35.0% | 564.4 | -35.0% |
| Core PBT | 206.4 | -49.9% | 45.8% | 347.1 | -41.0% |
| Net Income | 99.8 | -66.2% | 48.9% | 166.8 | -55.2% |
| Core Net Income | 110.5 | -53.9% | 64.7% | 176.8 | -43.4% |
| EPS (sen) | 1.99 | -69.9% | 48.9% | 3.3 | -60.2% |
| Core EPS (sen) | 2.21 | -59.0% | 64.7% | 3.6 | -49.5% |
| Net DPS (sen) | 0.00 | NA | NA | 0.0 | NA |
| NTA/share (RM) | 2.91 | NA | NA | 2.9 | NA |
| Net Gearing (x) | 0.37 | NA | NA | 0.37 | NA |
| Core EBIT Margin | 34.4% | NA | NA | 32.9% | NA |
| Core PBT Margin | 21.9% | NA | NA | 20.2% | NA |
Source: Company, MBSB Research
S P Setia RNAV
| Stake | Est remaining GDV (RM m) | WACC (%) | Value (RM m) | |
|---|---|---|---|---|
| Projects | ||||
| Setia Alam | 100% | 1006.61 | 10% | 62.53 |
| Setia City | 100% | 8961 | 10% | 407.47 |
| Setia Alaman | 100% | 4177.98 | 10% | 206.85 |
| Setia Ecohill | 100% | 1883 | 10% | 111.60 |
| Setia Ecohill 2 | 100% | 1883 | 10% | 263.79 |
| Glengowrie | 100% | 2160 | 10% | 83.63 |
| Setia Mayuri | 100% | 740.98 | 10% | 46.03 |
| Setia Eco Park | 50% | 1860 | 10% | 42.29 |
| Precinct Arundina @ Setia Eco Park | 100% | 230 | 10% | 14.29 |
| Setia Eco Glades | 70% | 853 | 10% | 32.29 |
| Setia Safiro | 70% | 784 | 10% | 31.06 |
| Setia Eco Templer | 100% | 833 | 10% | 47.14 |
| Setia Warisan Tropika | 100% | 558 | 10% | 30.18 |
| KL Eco City | 100% | 2203.62 | 10% | 119.17 |
| Setia Federal Hill | 100% | 20190 | 10% | 533.56 |
| Setia Alamsari North | 100% | 909.95 | 10% | 51.50 |
| Setia Alamsari South | 100% | 3198 | 10% | 172.95 |
| Putrajaya | 60% | 361.88 | 10% | 13.49 |
| Setia Trio | 70% | 1.2 | 10% | 0.06 |
| QSPH | 50% | 16298 | 10% | 292.49 |
| Bandar Kinrara | 51% | 2721 | 10% | 75.05 |
| Setia Bayuemas (I&P) | 52% | 2374 | 10% | 56.03 |
| Setia Bayuemas (PG) | 100% | 372.9 | 10% | 19.29 |
| Alam Damai | 70% | 629 | 10% | 27.35 |
| Setia AlamImpian | 99.9% | 7579 | 10% | 344.29 |
| Temasya Glenmarie | 66% | 2822 | 10% | 75.10 |
| Setia Fontaines | 100% | 11914 | 10% | 314.85 |
| Setia Eco Forest @ Tanjung Bungah | 100% | 960 | 10% | 49.66 |
| Setia Pearl Island | 100% | 635 | 10% | 32.85 |
| Bukit Dumbar | 100% | 539 | 10% | 35.12 |
| Setia Sky Vista | 100% | 450 | 10% | 23.28 |
| Setia Sky Hill | 100% | 341 | 10% | 17.64 |
| Seri Bayu | 100% | 240 | 10% | 12.41 |
| Setia Raintree Residence | 100% | 200 | 10% | 10.34 |
| Setia Sky Ville | 100% | 153 | 10% | 7.91 |
| Setia Miracca (Setia Sky Cubes) | 100% | 235 | 10% | 13.93 |
| Pangsapuri Rimbun | 100% | 18 | 10% | 0.93 |
| Setia Indah Johor | 100% | 229.36 | 10% | 14.95 |
| Setia Tropika | 100% | 1096 | 10% | 56.69 |
| Setia Eco Cascadia | 100% | 1645.63 | 10% | 81.48 |
| Setia Business Park II | 100% | 293.67 | 10% | 19.14 |
| Bukit Indah Johor | 100% | 528.45 | 10% | 29.91 |
| Setia Eco Gardens | 70% | 1248 | 10% | 45.19 |
| Setia Business Park I | 70% | 312 | 10% | 11.30 |
| Taman Perling | 100% | 222.49 | 10% | 13.82 |
| Taman Pelangi | 100% | 1658.7 | 10% | 93.87 |
| Taman Rinting | 89% | 763 | 10% | 35.16 |
| Taman Pelangi Indah I | 100% | 2004 | 10% | 83.96 |
| Taman Industri Jaya | 100% | 53.49 | 10% | 3.17 |
| Taman Pelangi Indah II | 100% | 7939 | 10% | 274.65 |
| Mukim Tanjung Kupang | 100% | 1763 | 10% | 76.92 |
| Mukim Serkat, Pontian | 100% | 311 | 10% | 15.40 |
| Aeropod @ Tanjung Aru | 100% | 1350 | 10% | 73.01 |
| Lintas Land | 100% | 925 | 10% | 57.46 |
| Shangri-La Melbourne Hotel | 100% | 1643 | 10% | 107.07 |
| Battersea Power Station | 40% | 28216 | 10% | 535.30 |
| EcoLakes, My Phuoc | 57% | 640 | 10% | 22.76 |
| EcoXuan, Lai Thieu | 95% | 608 | 10% | 32.77 |
| Setia Izumisano City Centre | 100% | 2488.49 | 10% | 123.21 |
| Unbilled sales | 6760 | 397.87 | ||
| Total | 5,883.4 | |||
| Shareholder Funds | 14,217.5 | |||
| Total RNAV | 20,100.93 | |||
| Fully Diluted Number of shares | 4827.2 | |||
| RNAV per share | 4.16 | |||
| Discount | 70% | |||
| Target Price (RM) | 1.25 | |||
FINANCIAL SUMMARY
Profit or Loss (RM’m)
| 2023A | 2024A | 2025E | 2026F | 2027F | |
|---|---|---|---|---|---|
| Revenue | 4,374 | 5,294 | 4,262 | 4,800 | 5,035 |
| EBIT | 1,084 | 1,486 | 960 | 1,075 | 1,082 |
| PBT | 688 | 1,032 | 564 | 621 | 686 |
| Net Income | 299 | 576 | 393 | 433 | 478 |
| Core Net Income | 331 | 486 | 393 | 433 | 478 |
| Core EPS (sen) | 8.0 | 10.6 | 9.4 | 10.3 | 11.4 |
| Core PER (x) | 13.6 | 10.2 | 11.6 | 10.6 | 9.6 |
| NTA/share | 3.44 | 2.99 | 3.02 | 3.05 | 3.09 |
| P/NTA | 0.32 | 0.37 | 0.36 | 0.36 | 0.35 |
Balance Sheet (RM’m)
| 2023A | 2024A | 2025E | 2026F | 2027F | |
|---|---|---|---|---|---|
| Investment properties | 1,980 | 2,001 | 2,021 | 2,041 | 2,062 |
| Inventories | 12,357 | 12,279 | 12,500 | 12,725 | 12,954 |
| Total non-current assets | 19,479 | 18,978 | 19,206 | 19,244 | 19,667 |
| Inventories – Property dev cost | 2,159 | 2,437 | 2,461 | 2,486 | 2,511 |
| Short term deposits | 441 | 733 | 1,197 | 1,542 | 2,119 |
| Cash and bank balances | 2,054 | 2,408 | 2,019 | 2,161 | 2,196 |
| Other assets | 4,873 | 3,048 | 3,810 | 3,540 | 2,773 |
| Total Assets | 29,006 | 27,604 | 28,694 | 28,972 | 29,266 |
| LT Borrowings | 7,102 | 6,383 | 6,829 | 7,308 | 7,819 |
| ST Borrowings | 3,043 | 2,204 | 2,711 | 2,651 | 2,593 |
| Other Liabilities | 3,198 | 3,174 | 3,158 | 2,822 | 2,461 |
| Total Liability | 13,344 | 11,760 | 12,698 | 12,780 | 12,873 |
| Share capital | 8,723 | 9,238 | 9,238 | 9,238 | 9,238 |
| Other Equity | 6,940 | 6,606 | 6,758 | 6,954 | 7,155 |
| Total Equity | 15,663 | 15,844 | 15,996 | 16,192 | 16,393 |
| Equity + Liability | 29,006 | 27,604 | 28,694 | 28,972 | 29,266 |
Cash Flow (RM’m)
| 2023A | 2024A | 2025E | 2026F | 2027F | |
|---|---|---|---|---|---|
| Cash flows from operating activities | |||||
| Net income before taxation | 656 | 1122 | 564 | 621 | 686 |
| Net cash from operating activities | 2301 | 3417 | 2563 | 2535 | 2507 |
| Cash flows from investing activities | |||||
| Addition to inventories | -330 | -771 | -663 | -570 | -542 |
| Net cash used in investing activities | -382 | -537 | -408 | -228 | -128 |
| Cash flows from financing activities | |||||
| Drawndown of bank borrowings | 1777 | 1301 | 1171 | 1054 | 1077 |
| Net cash from/(used in) financing activities | -2163 | -2157 | -1877 | -1820 | -1766 |
| Net increase/(decrease) in cash and cash equivalents | -243 | 723 | 278 | 486 | 613 |
| Cash and cash equivalent at 1 January | 2495 | 2255 | 2938 | 3216 | 3702 |
| Cash and cash equivalent at 1 December | 2255 | 2938 | 3216 | 3702 | 4315 |
Profitability Ratios (%)
| 2023A | 2024A | 2025E | 2026F | 2027F | |
|---|---|---|---|---|---|
| EBIT margin | 24.8% | 28.1% | 22.5% | 22.4% | 21.5% |
| PBT margin | 15.7% | 19.5% | 13.2% | 12.9% | 13.6% |
| PAT margin | 6.8% | 10.9% | 9.2% | 9.0% | 9.5% |
| Core PATAMI margin | 7.6% | 9.2% | 9.2% | 9.0% | 9.5% |
| ROE | 2.3% | 3.3% | 2.5% | 2.7% | 2.9% |
| ROA | 1.1% | 1.8% | 1.4% | 1.5% | 1.6% |
MBSB RESEARCH (formerly known as MIDF RESEARCH) is part of MBSB Investment Bank Berhad (formerly known as MIDF Amanah Investment Bank Berhad)
(Bank Pelaburan) (A Participating Organisation of Bursa Malaysia Securities Berhad)
DISCLOSURES AND DISCLAIMER
This report has been prepared by MBSB Investment Bank Berhad (formerly known as MIDF AMANAH INVESTMENT
It is for distribution only under such circumstances as may be permitted by applicable law. Readers should be fully aware that this report is for information purposes only. The opinions contained in this report are based on information obtained or derived from sources that we believe are reliable. MBSB INVESTMENT BANK BERHAD (formerly known as MIDF AMANAH INVESTMENT BANK BERHAD) makes no representation or warranty, expressed or implied, as to the accuracy, completeness or reliability of the information contained therein and it should not be relied upon as such. This report is not, and should not be construed as, an offer to buy or sell any securities or other financial instruments. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. All opinions and estimates are subject to change without notice. The research analysts will initiate, update and cease coverage solely at the discretion of MBSB INVESTMENT BANK BERHAD (formerly known as MIDF AMANAH INVESTMENT BANK BERHAD). The directors, employees and representatives of MBSB INVESTMENT BANK BERHAD (formerly known as MIDF AMANAH INVESTMENT BANK BERHAD) may have an interest in any of the securities mentioned and may benefit from the information herein. Members of the MBSB Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein This document may not be reproduced, distributed or published in any form or for any purpose.
MBSB INVESTMENT BANK (formerly known MIDF INVESTMENT BANK): GUIDE TO RECOMMENDATIONS
STOCK RECOMMENDATIONS
- BUY Total return is expected to be >10% over the next 12 months.
- TRADING BUY The stock price is expected to rise by >10% within 3 months after a Trading Buy rating has been assigned due to positive news flow.
- NEUTRAL Total return is expected to be between -10% and +10% over the next 12 months.
- SELL Total return is expected to be < -10% over the next 12 months.
- TRADING SELL The stock price is expected to fall by >10% within 3 months after a Trading Sell rating has been assigned due to negative news flow.
SECTOR RECOMMENDATIONS
- POSITIVE The sector is expected to outperform the overall market over the next 12 months.
- NEUTRAL The sector is to perform in line with the overall market over the next 12 months.
- NEGATIVE The sector is expected to underperform the overall market over the next 12 months.
ESG RECOMMENDATIONS* – source Bursa Malaysia and FTSE Russell
- ☆☆☆☆ Top 25% by ESG Ratings amongst PLCs in FBM EMAS that have been assessed by FTSE Russell
- ☆☆☆ Top 26-50% by ESG Ratings amongst PLCs in FBM EMAS that have been assessed by FTSE Russell
- ☆☆ Top 51%- 75% by ESG Ratings amongst PLCs in FBM EMAS that have been assessed by FTSE Russell
- ☆ Bottom 25% by ESG Ratings amongst PLCs in FBM EMAS that have been assessed by FTSE Russell
* ESG Ratings of PLCs in FBM EMAS that have been assessed by FTSE Russell in accordance with FTSE Russell ESG Ratings Methodology
