Upbeat on SP Setia’s RM1.2b jobs
Posted on | July 30, 2007
By THE EDGE
MACQUARIE Research is maintaining an “outperform” on SP Setia Bhd for its development projects which are located in growth locations and also for management’s ability to add value to land acquisitions.
Yesterday, SP Setia announced another new property development project in Cyberjaya and the township to be called Setia Eco Villa will cover 62.4ha of land in Cyberjaya.
SP Setia plans to develop mid- to high-end homes and commercial properties. Gross development value (GDV) for this project is RM1.2 billion. The project is expected to start in FY08 with a development period of seven years.
“Based on preliminary estimates, we see the acquisition as being NAV (net asset value) enhancing. On its own, Eco Villa could add as much as 40 sen per share to NAV. However, Setia is also issuing warrants on the basis of 1-for-4 existing shares, which, depending on the exercise price, could be NAV dilutive,” Macquarie Research said.
Aseambankers Equity Research said the project would provide SP Setia sufficient development work at least for the next 10 years. The land acquisition would be financed by its existing cash pile and bank borrowings.
It described the project as long term positive but it was maintaining forecast pending management guidance.
Conservatively assuming sales value of RM100 million each for FY08-09 with a net margin of 20%, it estimated net profit for FY08-09 could be enhanced by RM10 million and RM20 million respectively.
“This translates to potential earnings enhancements of 3.5% and 5.8% for FY08 and FY09 respectively,” it said.
You might also like
|
|
|
|
|
Search
