Sime Darby Property (SDPR) registered 3QFY22 net profit RM56.1m (>100% YoY, -46.6% QoQ) which came in within our estimates but above consensus. Group 9MFY22 net profit of RM212.9m (+153.1% YoY) constituted 79.8% and 90.1% of our and consensus full year estimates rspectively. YTD, the Group has launched products amounting to RM2.1bn in Gross Development Value (GDV), which comprises of residential and industrial product mix at 44% and 54%. Take-up is encouraging at an average of 90% sold. Sales momentum remains good with RM808.3m sold in 3QFY22, bringing pre-sales achieved to RM2.7bn, surpassing its FY22 sales target of RM2.6bn. No change to our earnings estimates and we maintain our Outperform call with unchanged RM0.70 TP, pegged at c.50% discount to its NTA.

• 9MFY22 property revenue rose +19% YoY to RM1.6bn. Correspondingly, its pretax profit (PBT) jumped +72% YoY to RM270.3m, driven mainly by higher property sales of on-going projects and higher on-site development activities in City of Elmina, Bandar Bukit Raja, Elmina Business Park, Serenia City and KLGCC Resort townships, coupled with contribution from sale of land in Selangor and Sabah, as part of the Group’s land bank management and monetisation exercise.

• Surpasses FY22 sales target. The Group clinched RM2.7bn pre-sales in 9MFY22, or +43% higher YoY compared to the similar period last year, which already surpasses its FY22 sales target of RM2.6bn. YTD, it has launched products amounting to RM2.1bn in GDV, comprising residential and industrial product mix at 44% and 54% respectively. Average take-up is averaging 90%, thanks to its successful marketing campaigns such as the industrial-driven ‘We’re the Go-To Experts’ campaign, which was launched in June. We understand that it has remaining bookings amounting to RM2.1bn as at 6 November 2022, and total completed inventories dropped to a new low of RM273.4m as at 30 September 2022. Elsewhere, Group’s unbilled sales increased 5.4% QoQ to RM3.5bn as at 3QFY22.

Source: PublicInvest Research - 29 Nov 2022