December 18, 2014
Company Name: SP SETIA BHD
|Research House: ALLIANCE||Price Call: BUY||Target Price: 4.10|
ALLIANCE DBS Research is maintaining a "buy" rating on SP Setia Bhd, with a target price of RM4.10, following its commendable fourth quarter results.
SP Setia reported fourth quarter earnings of RM131 million, a 27 per cent increase quarter-on-quarter and a three per cent rise year-on-year, taking its 2014 financial year earnings to RM406 million.
"The higher-than-anticipated 4QFY14 earnings were largely due to the strong turnaround of its construction division as well as higher profit recognition from completed projects," said the research house.
SP Setia achieved RM4.6 billion in property sales in FY14, with RM1.2 billion from its Battersea Power Station project and RM2.1 billion from Malaysian projects, it said.
Affin Hwang Research has maintained its "reduce" call on SP Setia, with a lower target price of RM2.78.
"We have lowered our FY15-FY16 estimation earnings forecasts by 6.1 per cent and 2.3 per cent, respectively, after updating FY10/14 figures and assuming a higher associate loss.
"Although we like SP Setia for its strategic landbank and high unbilled sales of RM11 billion, we opine that the persistent uncertainty over the group's strategic direction and leadership transition will lead to further exodus of talent," it said.
Hong Leong Investment Bank Research has kept its "hold" call on SP Setia, with target price unchanged at RM3.45, believing the property market will remain weak next year. Bernama