SP Setia: The worst is over for the property market, RM3b launchings coming

Property market is bad, according to some analysts. Property market is going to be good soon, according to some predictions. What do I personally believe? I believe in only numbers, results and by talking to my good friends from the property industry. Must keep myself updated. SP Setia meanwhile believes that the property market will improve and has lined up RM3 billion worth of launches for the second half of 2017 (yes, that’s now). Its president and CEO Datuk Khor Chap Jen said, “The worst is over. We see the market coming up but whether it will come up in a strong way or not, that depends a lot on sentiments. We find that actually it has bottomed out.” He also shared that for the first half of 2017, SP Setia group has sold RM2.07 billion worth of properties of which RM1.08 billion were from domestic and RM996.5 million were from international projects. That full article by TheSun Daily here. 
SP Setis is also optimistic with hitting the RM4 billion sales target because of the planned launches in the Klang Valley and Johor. Most of the launches would be for mid-range landed properties where demand is still strong. (Yes, I agree too because landed is really short in supply versus the actual demand for them, as long as the price is affordable. Seriously, if the price is almost the same between landed and a high-rise, which one would you choose? Even a RM200,000 loan difference, when spread over a 30-year loan is less than RM1,000 per month. For a couple, that’s less than RM500 difference. A Tumi handbag meanwhile would already set us back RM2,200 or a new Samsung Note 8. Well…..)  Khor shared that they will target more local buyers for the second half.  On the acquisition of I&P Group Sdn Bhd, executive vice-president and CFO Choy Kah Yew said that it is currently obtaining Bursa Malaysia’s approval and that the exercise is on track for completion by year-end.
Net profit margin for H1 2017 came it at 13.96%. This was achieved on the back of a RM241.50 million net profit versus a revenue of RM1.73 billion. A dividend of 4 sen per share was declared. Want to know what analysts are saying for SP Setia? Refer to the image (screenshot) from a famous investment site i3investor.com Analysts in general like the share and based on its closing share price of RM3.34 per unit, there’s a potential upside of 15.3 percent. I do not own any units of SP Setia currently but intend to buy 1,000 unit (RM3,340) to beat the FD’s interest of less than 4 percent currently. Next week then since it’s already weekend currently. Happy following and buying.
written on 19 Aug 2017
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