SP Setia’s 4QFY21 net profit rebounded to RM123.3m, which came in above our and consensus expectations. Group FY21 net profit of RM284.3m (>100%% YoY) surpassed both our and consensus estimates by 20% and 32% respectively mainly due to improved profit margin of products delivered in 4QFY21 and some improvement in share of results from joint venture companies. The Group secured RM4.26bn sales in FY21 which surpassed its FY21 target of RM3.80bn. Group revenue rose 17% YoY to RM3.76bn with profit before tax (PBT) of RM542.5m. For FY22, it aims to sell RM4.0bn, underpinned by c.RM4.0bn worth of launches in the pipeline. Focus remains on landed residential projects, mostly from its existing townships. Maintain Neutral with TP unchanged at RM1.40, pegged at c.70% discount to RNAV.
- Property revenue rose 17% YoY to RM3.58bn with PBT of RM612.2m, mainly driven by encouraging recovery following the relaxation of movement restrictions and stimulated by the Home Ownership Campaign (HOC) introduced by the Malaysian government with the aim to encourage homeownership. This has ended on December 2021 incidentally. For new sales, Central region contributed the highest sales of RM2.92bn to the Group, followed by RM556m from the Southern region, while the international regions collectively registered RM762m. We understand that SP Setia also managed to clear RM754m worth of its completed inventories in FY21.
- FY22 sales target of RM4.0bn The Group has set a higher FY22 sales target of RM4.0bn, or about 5% higher than the original FY21 sales target of RM3.8bn. Pipeline launches of c.RM4.0bn will again focus primarily on landed residential projects in Setia Alam, Setia Eco Glades, Setia Safiro, Setia Alam Impian, Bandar Kinrara, Setia Bayuemas, Setia Ecohill & Ecohill 2, Setia Eco Park and Setia Warisan Tropika in the Central region; Setia Indah, Taman Rinting and Taman Pelangi Indah in the Southern region and Setia Fontaines in the Northern region. As of 31 December 2021, the Group has 48 ongoing projects, with effective remaining land bank of 7,237 acres valued at a GDV of RM122.4bn, which we believe will last the Group more than 20 years based on current launch rate. Unbilled sales remained healthy at RM10.2bn.
Source: PublicInvest Research - 1 Mar 2022