S P Setia may hit pre-sales target of RM4 billion

S P Setia may hit pre-sales target of RM4 billion

Property developer sales results as another sign for the economy

Besides the stock market which may reflect the economic situation, developer’s sales results are also another way to know if the economy is doing well or not. Imagine an econmy where unemployment is high. Salary earners would be worried and definitely will not make any house buying decision until they feel certain that their current job is certain. This is why during a slowdown, property developers will feel the pressure because many buyers may not be thinking of buying a property.

Is RM4 billion a big number or a small number?

We have a developer who will reach its own pre-sales target of RM4 billion for one financial year. Yeah, that’s considered high in case you like to know what does RM4 billion sales target means. Typical Gross Development Value (GDV) for a developer will be lower than RM1 billion per project. They may do 1 or they may do 2 or 3. That’s to be built over a few years. So, sales per year would be lower than RM1 billion. In other words, S P Setia needs to have a GDV which is many billions in order to achieve a sales of RM4 billion. Read on.

Article in nst.com.my The settlement of S P Setia Bhd’s Australian project, Sapphire by the Garden, which has a gross development value (GDV) of RM1.1 billion, may help the company reach its pre-sales target of RM4 billion this year.

KAF Research believes that the company will be able to create much greater sales in the fourth quarter of 2022 (4Q22), powered by the Australian project, despite sales coming in slightly short at RM2.7 billion as of the first nine months of 2022 (9M22).

Homebuyers received Sapphire by the Garden in October 2022.

“Profit from this project will be fully recognised in the 4Q22. In addition, bookings received in 3Q22 stand at RM592 million of which the management is focusing on the swift conversion of these bookings into sales. Overall, the management anticipates stronger sales next quarter and is confident that they will achieve its sales target of RM4 billion for the year,” the research firm said in a note today. Do read the full article here: Article in nst.com.my

So, is it a buy, buy, buy (BBB) mode?

Haha. Sorry, it will never be BBB mode for me. 3 reasons. I do not have unlimited money. I do not believe every project is undervalued. I believe BBB mode will be followed by crash mode… Please buy after understanding. Please invest after viewing a lot of units both from the primary and the secondary, Buying by looking at brochures is ONLY applicable to those who has bought many properties and has probably sold a few of them to have RM1 million profits? Property investment is definitely going to be something I love for a very long time to come.

Happy viewing.

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