Sime Darby Property’s (SDPR) 1QFY23 net profit came in at RM60.7m (+17.0% YoY, -41.2% QoQ) or at about 18% and 19% of our and consensus full year estimates. As the first quarter is traditionally slower for SDPR, we expect subsequent quarters to be stronger and hence we keep our earnings estimates unchanged for now. The Group recorded an impressive RM688.5m in pre-sales, which is already 30% of its FY23 sales target of RM2.3bn, while property bookings as at 7 May 2023 are already at RM1.6bn. Unbilled sales as at 1QFY23 stood at RM3.6bn, unchanged as compared to 4QFY22. Net gearing remains healthy at only 0.2x with RM945m cash balance. All told, reiterate our

Outperform call with unchanged RM0.70 TP, pegged at c.50% discount to its NTA with the stock offering dividend yield of 4.4% currently.

• 1QFY23 revenue rose 43% YoY to RM685.3m, while profit before tax (PBT) correspondingly rose 18% YoY to RM97.9m, driven mainly by the property development segment. Key revenue contributors are from its major townships such as Bandar Bukit Raja, City of Elmina, Nilai Impian, Elmina Business Park and Hamilton Nilai City. As for launches, it unveiled projects worth RM1bn comprising residential landed properties (58%), residential high-rise components (29%) and industrial offerings (13%). Take-up is also commendable, we understand, with its residential landed products recording an average take-up rate of 79% while industrial products achieved an average take-up rate of 69%.

• 1QFY23 pre-sales already at 30% of FY23 sales target. The Group sold RM688.5m in the first quarter, of which 73% of sales achieved are attributable to projects launched prior to FY2023. We understand that its industrial segment’s contribution increased significantly to 55% (as compared to 31% a year ago), while residential landed and residential high rise properties remained strong, accounting for 25% and 19% of products sold, respectively. To re-cap, it has about RM3bn worth of launches to be unveiled in FY23 consisting residential high-rise and landed properties, as well as industrial properties. 2QFY23 launches are worth about RM1.3bn combined, with more than half residential landed products from its key flagship townships such as City of Elmina, Bandar Bukit raja, Serenia City and NIlai Impian.

Source: PublicInvest Research - 26 May 2023