S P Setia Bhd's sales target of RM3.8 billion would likely be supported by the developer's RM1.19 billion new sales and RM1.3 billion bookings secured in the first quarter of 2021 (1Q2021), says CGS-CIMB in a research note today.
Local projects contributed RM923 million or about 78 per cent of the sales in 1Q2021, whilst the rest were contributions from international projects mainly from Daintree Residence, Singapore,
In 1Q2021, S P Setia achieved revenue of RM1.05 billion and a pre-tax profit of RM142.4 million.
The developer is maintaining its full-year sales target, which could be lifted by strong sales and bookings secured before the full movement control order (FMCO), CGS-CIMB said following a recent meeting with the developer.
It is planning RM3.7 billion worth of new launches for the year.
CGS-CIMB said the extension of the Home Ownership Campaign (HOC) till December 31, 2021, is positive for developers as this could spur property buying sentiment in light of the property industry's current supply glut and nationwide lockdown.
According to the stockbroking firm, S P Setia is not expecting any delays to its project handover, although revenue recognition could be weaker due to the strict standard operating procedure (SOP) onsite.
"The company revealed that the latest take-up rate for its Battersea project Phase 2 and 3A in London was 80 per cent as of end-July 2021," it said.
Construction of Phase 2's Switch House West with 98 units was completed at the end of March 2021 while the rest of Phase 2 would be completed by August 21, this year.
"We gather the handover of Switch House West started on May 21 and the half-a-million square feet of office space in the power station building was handed over to Apple in July 2021 as well," the firm said.
CGS-CIMB said according to S P Setia, Phase 3A, known as Electric Boulevard, is expected to be completed between November 2021 and April 2022.
At home, S P Setia has deferred some of its hotel openings to 2022/2023 given the travel restrictions and the high number of Covid-19 cases globally, the firm said.
