KUALA LUMPUR: Public Investment Bank (PublicInvest) maintains a positive outlook on SP Setia Bhd and has raised its rating to 'outperform'.
The research firm noted that the stock price has decreased following the announcement of the cancellation of the proposed land sale to Scientex joint venture.
Despite this, they view the risk-reward ratio favourably.
"We are favourable towards the stock due to its attractive valuations and the advantageous positioning of its land assets," it said.
The property developer reported a stronger-than-expected net profit for the fourth quarter of fiscal year 2023 (4QFY23), driven by high billings resulting from the handover of several projects.
"The group achieved a net profit of RM298.6 million in FY23, representing a slight decrease of 1.9 per cent year-on-year (YoY), surpassing both our and consensus full-year estimates," it added.
PublicInvest keeps its target price unchanged at RM1.00.
On the outlook, SP Setia plans to advance its development projects in Vietnam and Australia, with a focus on maintaining its existing presence in Australia and strengthening it through the development of newly-acquired land in Sydney.
"Within Malaysia, the focus will again be on the projects in the central region, with industrial offerings in Setia Alaman Industrial Park,Klang, Selangor, and the two residential towers by Setia Federal Hill in Jalan Bangsar, Kuala Lumpur," said PublicInvest.
PublicInvest highlighted that additional project launches will stem from SP Setia's ongoing 41 projects, supported by a remaining land bank of 6,311 acres and an effective remaining gross development value (GDV) totaling RM119.74 billion.