I&P deal to lift SP Se­tia earn­ings, mar­ket cap

New Straits Times - - Business -

KUALA LUMPUR: SP Se­tia Bhd’s earn­ings and mar­ket cap­i­tal­i­sa­tion are set to get fur­ther boost af­ter the com­ple­tion of I&P Group ac­qui­si­tion by year-end.

At its cur­rent mar­ket cap­i­tal­i­sa­tion of RM10.36 bil­lion, chances of SP Se­tia overtaking IOI Prop­er­ties Group Bhd as the largest prop­erty de­vel­oper in Malaysia seems very pos­si­ble.

SP Se­tia pres­i­dent and chief ex­ec­u­tive of­fi­cer Datuk CJ Khor said the com­pany ex­pected to com­plete the due dili­gence process for the ac­qui­si­tion by next month and con­clude it by yearend.

SP Se­tia aims to reach RM18 bil­lion mar­ket cap­i­tal­i­sa­tion in the fu­ture.

Khor ex­pected earn­ings to pick up in the re­main­ing quar­ters of this year as the com­pany was on track to achieve its RM4 bil­lion sales tar­get on strong launches.

He said this would be driven by higher rev­enue con­tri­bu­tion from over­seas projects.

As­sum­ing the com­ple­tion of the ac­qui­si­tion by year-end, MIDF Re­search an­a­lyst Alan Lim said SP Se­tia’s earn­ings should in­crease fur­ther and lead to higher mar­ket cap­i­tal­i­sa­tion.

The re­search house an­a­lyst had fore­cast higher rev­enue growth of 22 per cent for SP Se­tia this year with­out tak­ing into ac­count the I&P Group ac­qui­si­tion.

“SP Se­tia could gain the FTSE Bursa Malaysia KLCI sta­tus sooner than 2020 if it con­tin­ues to re­plen­ish its land­bank size and con­sis­tently achieves higher sales ex­ceed­ing RM4 bil­lion,” he said.

In its last re­port on SP Se­tia, Lim said the prop­erty de­vel­oper, which was cur­rently the sec­ond big­gest listed prop­erty de­vel­oper by mar­ket cap­i­tal­i­sa­tion af­ter IOI Prop­er­ties Group Bhd, was poised to be among the top 30 big­gest pub­lic com­pa­nies in Malaysia by 2020.

Mar­ket cap­i­tal­i­sa­tion for IOI Prop­er­ties’ cur­rently stands at RM11.5 bil­lion.

Launches this year are ex­pected to com­mand a gross de­vel­op­ment value (GDV) of more than RM5 bil­lion, the big­gest of which will be lo­cated at Ex­hi­bi­tion Street in Mel­bourne, Aus­tralia, with a GDV of A$478 mil­lion (or RM1.54 bil­lion).

SP Se­tia has un­billed sales of RM7.84 bil­lion, which is ex­pected to pro­vide earn­ings vis­i­bil­ity for 1.6 years.

The prop­erty de­vel­oper’s other over­seas projects in­clude Eco Sanc­tu­ary in Singapore and Bat­tersea Power Sta­tion in Lon­don. Amir Hisyam Rasid

BLOOMBERG PIC

The Bat­tersea Power Sta­tion de­vel­op­ment in Lon­don is one of SP Se­tia’s over­seas project.

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