PETALING JAYA: S P Setia Bhd is expected to see an acceleration in recognition of its unbilled sales this year, on the back of easing labour shortage conditions and ongoing Australian projects.
Hong Leong Investment Bank Research noted that the property developer will recognise most of its remaining unbilled sales from its Australia projects amounting to RM1.41 bil in the first quarter of 2023.

“Given the positive cash flow from its Australia projects, S P Setia’s net gearing as at the fourth quarter of 2022 improved to 0.81 times (from 0.9 times in the third quarter of 2022).”

The research house added that Bank Negara’s recent rate hike pause should also augur well for the group, giving it much needed breathing room to lower its net gearing.

Meanwhile, TA Research said it is raising S P Setia’s 2023 earnings by 46%, largely to reflect the delayed recognition of Australia projects and the sale proceeds of land in Johor.

“Meanwhile, 2024 earnings are adjusted marginally higher by 0.6%.

“Our 2023, 2024 and 2025 new sales assumptions are RM4.2 bil, RM4.35 bil and RM4.35 bil, respectively. We introduce our 2025 net profit of RM157.6 mil, representing a growth of 4.1% year-on-year.”

In terms of the construction status of its two Australian projects, TA Research said the group’s Sapphire by The Gardens is fully completed, while Uno Melbourne’s Stage 1 is 100% completed and Stage 2 is 73% completed.

“As such management is confident that the remaining unbilled sales of RM1.4bil will be fully recognised this year.”

Maybank Investment Bank Research (Maybank IB) meanwhile said S P Setia has set a flattish sales target of RM4.2 bil in 2023 (compared with RM4.1bil achieved in 2022), driven by RM6.2 bil worth of new launches.

“As at December 2022, S P Setia had RM385 mil worth of bookings. Unbilled sales stood at RM7.3bil.”

Separately, in view of the strong demand for industrial properties, Maybank IB noted that the company has allocated 400 acres and 321 acres of land in Klang and Port of Tanjung Pelepas, respectively, for industrial development.

“Elsewhere, it is in advanced stages of negotiations for the disposal of a non-core landbank,” said the research house.

Meanwhile, Affin Hwang Investment Bank noted that S P Setia has set a slightly higher (year-on-year) sales target of RM4.2 bil for 2023, as the developer is confident of stronger domestic sales.

“Bookings of RM385 mil as at end-2022 are expected to contribute to sales in the first quarter of 2023,” it said, adding that the high unbilled sales as at end-2022 will provide good earnings visibility.

“Net debt was reduced 13% quarter-on-quarter to RM8.75 bil at the end of the fourth quarter of 2022, due to strong operating cash inflow of RM1.69 bil.”

KUALA LUMPUR (Feb 28): S P Setia Bhd’s net profit fell 26.7% to RM90.31 million for the fourth quarter ended Dec 31, 2022 (4QFY2022), from RM123.31 million a year ago, mainly dragged by higher finance costs and tax.

S P Setia’s finance costs had swollen to RM82.35 million in 4QFY2022, compared with RM42.9 million a year ago. Taxation also increased to RM91.19 million, up from RM62.14 million.

Revenue for the quarter, however, was up 65.4% to RM1.71 billion, from RM1.03 billion a year ago. This was driven by significant contributions from the property segment, particularly the handover of Australia’s UNO Melbourne (Phase 1), which generated a revenue of RM106.2 million, and Sapphire by the Gardens, which contributed RM788.5 million.

For the full year, S P Setia reported a net profit of RM308.09 million, an increase of 8.3% from RM284.36 million for FY2021, the property developer said in a filing with Bursa Malaysia on Tuesday (Feb 28).

Meanwhile, revenue stood at RM4.45 billion, compared with RM3.76 billion for FY2021.

Local projects contributed RM3.58 billion or approximately 87% of sales, while international projects contributed RM525 million or about 13% of sales.

On the local front, the sales secured were mainly from the central region of Peninsular Malaysia with RM2.54 billion. The southern region contributed RM615 million, while the northern and eastern regions contributed RM322 million.

As for international projects, Battersea Power Station outperformed with sales of RM424 million, while Australia contributed another RM43 million.

“The total sales secured were partly complemented by the concerted effort of clearing completed inventories amounting to RM622 million in sales value. As of Dec 31, 2022, the group had secured additional sales in the pipeline of RM385 million,” S P Setia president and chief executive officer Datuk Choong Kai Wai said in a separate statement.

S P Setia has set a sales target of RM4.2 billion for FY2023, representing a growth of 5% from the preceding year.

Shares in S P Setia were unchanged at 62 sen on Tuesday, giving the group a market capitalisation of RM2.53 billion.

In efforts to support communities in need and improve their access to healthcare support, S P Setia’s charity arm S P Setia Foundation has provided assistance to three hospitals in the Klang Valley through its ‘Sincerely, Setia Healthcare & Well-Being Assistance Programme’.

S P Setia Foundation has contributed funding worth up to a total of RM120,000 to Pusat Perubatan Universiti Malaya/ University Malaya Medical Centre (UMMC), Hospital Canselor Tuanku Muhriz (HCTM) and Shah Alam Hospital.

Symbolic cheques presentation together with presentation of wheelchairs were held at S P Setia Corporate HQ today to signify the support and commemorate the launch of the programme.

“While we continue our efforts through the Sincerely, Setia drive to aid Malaysians who are underprivileged and require medical attention, we hope the assistance given to them and their carers through these hospitals will help ease their burden and provide them peace of mind while receiving the treatments they need,” said S P Setia Foundation Chairman Dato’ Zuraidah Atan.

The funding towards UMMC and HCTM will be channelled towards their transit centres to subsidise the costs of accommodation, daily meals and hygiene essentials borne by the patients and their carers or families.

The hospitals will also upgrade the amenities of the transit centre rooms to create a more comfortable environment for the patients and their carers, especially for patients with chronic illnesses who are receiving treatments at the ward and specialist centres.

Part of the funding of ‘Sincerely, Setia Healthcare & Well-Being Assistance Programme’ was allocated towards Shah Alam Hospital for the purchase of 21 units of wheelchairs worth RM10,000. These wheelchairs will be given to deserving patients who are recovering from stroke or are recovering from leg or knee surgery but are not able to afford it.

S P Setia Bhd will begin new projects within Setia Fontaines, an integrated development north of Seberang Perai, Penang, which is benefiting from growth from a nearby 850-acre industrial park.

Setia Fontaines is a 1,691-acre township with a gross development value (GDV) of RM12 billion. It will include commercial development including office space, a trade centre, warehousing, a technological hub, shopping centres, F&B, a convention centre, a hotel, and a leisure area.

Wong Wei Sum, an analyst with Maybank Investment Bank (Maybank IB), said that the company recently visited Setia Fontaines and was informed that the project accounted for 10 per cent of S P Setia’s remaining GDV.

As end-Dec 2021, S P Setia has a remaining landbank of 7,237 acres worth RM122 billion in GDV, spread over Malaysia, London, Singapore, Vietnam, and Australia.

“Setia Fontaines offers a similar eco theme as Setia Eco Park but is more affordably priced like Setia Alam. The catalyst to the project include the industrial park nearby, which could offer employment opportunities and attract new population to the area over the longer term,” she said in the firm’s research report.

She stated in a note that the project, which primarily offers standard landed properties, is anticipated to still have at least 25 to 30 years of development left.

According to Wong, the project has produced stable and increasing sales for S P Setia since its launch in 2018.

The project generated RM157 million in sales (+89 per cent year on year), or 4 per cent of S P Setia’s property sales.

She disclosed that Setia Fontaines’ products are more premium (RM500,000 to RM600,000 per unit), in comparison to nearby competitors like Scientex Bhd’s Tasek Gelugor and Sungai Dua developments, which are priced at RM250,000 to RM280,000 per unit.

“We suspect the premium pricing is due to the Setia brand name and a well-designed development plan. The project’s sizeable land area of about 1,000 acres also signifies S P Setia’s long-term commitment and this somehow has provided confidence to the potential buyers and increased the perceived value of their purchase, we think,” she said.

Wong said that S P Setia will launch the commercial plot with a GDV of RM130 million and 450 units of landed residential properties with a GDV of RM400 million in the third quarter of this year (Q3 2023), after receiving a positive response to the launch of Amansara North in the fourth quarter of 2022.

Amansara North has a GDV of RM296 million and 499 landed residential units. Some 80 per cent of the units have been sold, with an average selling price of RM580,000.

Wong also disclosed S P Setia’s continued focus on reducing its debt level through the sale of non-core landbank assets and strategic joint venture partnerships for some of its projects to reduce the up-front project development expenses.

“Apart from that, cash flow repatriation from its overseas projects will help to lower its debt level,” she said.

PETALING JAYA (Feb 15): In the spirit of Chinese New Year, S P Setia Foundation delivered gift baskets during its visit to the Klang and Coast Chik Sin Thong Old Folks Home in Selangor last week.

The visit, a continuation of the foundation’s ‘Sincerely, Setia’ campaign, was led by the foundation’s management committee member Adelene Wong along with Team Setia who were received by the chairman Ng Tian Peng and committee members of Klang and Coast Chik Sin Thong Old Folks Home.

The gift baskets, containing dry food such as rice, crackers, cooking condiments, instant beverages, and essentials like towels and underpads, were delivered to the 28 residents at the home who are aged from 65 to 93 years.

Along with the gift baskets, festive angpows were also given to each of the senior residents of the home.

“We hope that these gift baskets jointly contributed by the staff of S P Setia will not only help reduce the financial burdens of the home but also uplift the spirit of the senior residents here,” Wong said.

During the visit, members of S P Setia Foundation and Team Setia also joined the senior residents for their daily activity which is planned by the home every week.

This gift basket donation programme is in line with the foundation’s second Object of Trust, which involves providing aid to meet the needs of underprivileged, disabled, poverty-stricken or critically ill Malaysians.

S P Setia Foundation, which was established in 2000, also delivered gift baskets to 36 senior residents at Joy Garden Old Folks Home in Semenyih, Selangor earlier this month.

The foundation aims to help underprivileged communities in Malaysia with the focus on creating positive impact, foster integration and national unity, and cultivating a more caring society.

Under the foundation’s Setia Caring School Programme, it has adopted nine schools in Selangor, Penang and Johor.

The programme, which has been running since 2015 aims to cultivate future leaders who are not only academically successful but also grounded in positive moral values and possessing empathy for all in a multicultural community.

Chinese New Year was made more meaningful for residents of an old folks home in Semenyih, Selangor, who received gift bags.

In its efforts to share festive happiness, S P Setia’s charity arm S P Setia Foundation delivered gift bags to 36 residents of non-profit Joy Garden Old Folks Home.

The gift bags contained toiletries and essential items such as pyjamas, socks, bath towel, face towel, shampoo, shower gel, toilet rolls, instant oat drinks and biscuits.

S P Setia Foundation trustee Dr Azura Mansor said the gift bags were prepared by the foundation as well as members of Team Setia.

Through this programme, the foundation is also supporting the less abled community by purchasing socks made by residents from Lovely Disabled Home in the gift bags.

A special talk for the senior citizens was conducted by physiotherapist Eman Yazid, along with demonstrations of light exercises that help maintain joint health.

Dr Azura, who is also an orthopaedic surgeon, shared some advice on stretching exercises for the elderly to maintain and strengthen bone health.

Datuk Halipah Esa, who is on S P Setia Bhd’s board of directors, presented a token of appreciation to James Yong, who runs the home.

Also at the event were S P Setia group quality management general manager Goh Gek Ling, Setia EcoHill general manager Koh Sooi Meng, S P Setia executive vice-president Datuk Yuslina Mohd Yunus and S P Setia group branding and communications head Adelene Wong.

S P Setia’s new Chinese New Year film, Threads of Joy, encourages people to give new life to their old fabrics and usher in joy and blessings with a simple act of upcycling these fabrics into something auspicious.

Created by SPIN Communications in collaboration with Motionrom, the film was inspired by the fact that most of people’s favourite clothes and fabrics are more than objects. They hold stories from the past. Their colours, patterns and textures can evoke precious memories, creating sentimental connections.

After such a fulfilling ‘useful’ life, these fabrics should be woven into present celebrations to create a richer, more meaningful new year.

S P Setia Head of Group Branding & Communications Adelene Wong  said that the festive film and its inspiration also reflect the rise in upcycling and a renewed appreciation for turning fabric waste into something better.

KUALA LUMPUR (Dec 16): S P Setia Foundation hosted an educational outing for 90 primary school students on Dec 13, 2022.

This is part of the foundation’s campaign to promote the spirit of unity amongst the youth while promoting creativity beyond the classroom.

The 90 students were from SK Semenyih, SJK(C) Kampung Baru Semenyih and SJK(T) Ladang Rinching which are schools adopted under S P Setia Foundation’s Setia Caring School Programme, as well as SK(Asli) Bukit Tampoi, Dengkil.

The outing started off with the children being treated to a local animation movie Mechamato, followed by an educational play session at Toy8 Playground, an experiential playground focused on early intervention for children.

“Through the S P Setia Foundation, we hope to play a role in shaping them to be future leaders who know that within hardship, they live in a country whose people are kind, who care about their wellbeing regardless of skin colour or social status, who gives them opportunities to nurture their intelligence, skills and talents to grow up to be positive contributors to this nation’s advancement and development,” said S P Setia Foundation chairman Datuk Zuraidah Atan who is also a director of S P Setia Bhd.

“The outing today was a great experience for the students as the activities were exciting and stimulating which helped enhance their skills. The movie Mechamato was very inspiring which motivated the students to be innovative.

“Additionally, the play session at Toy8 allowed them to learn different skills from a range of activities such as building a robot, top and yoyo,” said principal of SJK(T) Ladang Rinching, Puan Uma Perumal.

S P Setia Berhad has appointed Dato’ Zuraidah Binti Atan as the chairman of S P Setia Foundation effective 1 December 2022 succeeding the late Tan Sri Dr Wan Mohd Zahid Mohd Noordin.

Dato’ Zuraidah is a veteran of corporate social responsibility activities and is known as someone with a big heart and a strong passion for social welfare.

As the chairman, Dato’ Zuraidah will be helming the Group’s vision to create a positive impact among the country’s communities, and foster national integration and unity towards a more caring society. Currently, an independent non-executive director of S P Setia, she is also the chairman of the developer’s Audit Committee. With an LLB (Hons) from the University of Buckingham, England, and a Certificate in Legal Practice (Malaysia), she is a member of the Malaysian Bar and a practising lawyer under her own legal firm, Chambers of Zuraidah Atan.

Dato’ Zuraidah’s present principal appointments include her position as the chairman of the International Association of Traffic and Safety Sciences (IATSS) Forum (Japan) National Committee in Malaysia, which is an annual ASEAN-Japan Leadership Training programme for young professionals sent to Suzuka City, Japan. She is also the honorary advisor of the National Cancer Society of Malaysia.