Sime Darby Property: Stable outlook for prime township builder Hold

We initiate coverage on Sime Darby Property (SimeProp) with a HOLD recommendation, pegging a fair value of RM1.08 based on a conservative 45% discount to RNAV (Exhibit 4). We expect the company to register core net earnings of RM169.0mil, RM401.9mil and RM497.0mil for FPE18, FY19 and FY20 respectively.

SimeProp has a 45-year track record in developing residential, commercial, and industrial properties. The group is Malaysia’s biggest property developer in terms of landbank, with a balance area of 20,572 acres and a total estimated GDV of RM89.3bil. SimeProp has built 23 townships and developments that are strategically located and connected to major highways and transportation hubs within key growth areas and economic corridors stretching from the central region of Klang Valley to Negeri Sembilan and Johor in the south.

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Source: AmInvest Research - 4 Jan 2019