[%kMQn%] 
Research by HLIB
BUY – TP RM1.80

" Land sale boost, but offset by BPS losses ”

SP Setia reported 2Q24 core PATAMI of RM296.2m (+13.8x QoQ; +3.9x YoY), which brought 1H24’s sum to RM316.2m (+3.51x YoY). Despite making up 52.3% of our full-year forecast, we deem the results to be below our expectation as 1H24 results were boosted by substantial land sale gain of RM361m. The negative deviation in our results was due to wider-than-expected share of losses from Battersea. We lower our FY24/25 forecasts by -14%/-8.1% factoring in weaker performance from Battersea. Despite this, we remain confident that the group’s overall performance will be well-supported by the robust recovery in Malaysia’s property market. Maintain BUY with a lower TP of RM1.80 (from RM2.00) based on a higher 55% discount (from 50%) to our estimated RNAV of RM4.01

Analyst:
Tan Kai Shuen, CFA
[%Ludv%]

$KLSE-SPSETIA 
Research by HLIB
BUY – TP RM1.80

" Land sale boost, but offset by BPS losses ”

SP Setia reported 2Q24 core PATAMI of RM296.2m (+13.8x QoQ; +3.9x YoY), which brought 1H24’s sum to RM316.2m (+3.51x YoY). Despite making up 52.3% of our full-year forecast, we deem the results to be below our expectation as 1H24 results were boosted by substantial land sale gain of RM361m. The negative deviation in our results was due to wider-than-expected share of losses from Battersea. We lower our FY24/25 forecasts by -14%/-8.1% factoring in weaker performance from Battersea. Despite this, we remain confident that the group’s overall performance will be well-supported by the robust recovery in Malaysia’s property market. Maintain BUY with a lower TP of RM1.80 (from RM2.00) based on a higher 55% discount (from 50%) to our estimated RNAV of RM4.01

Analyst:
Tan Kai Shuen, CFA
kstan@hlib.hongleong.com.my