Saturday, 16 July 2011

SP Setia: Selling Climax triggered?

Since the interim dividend of 5 sen was ex-ed in 6th June, SP Setia's share price enter into a free fall mode.

There is no particular bad news on SP Setia, I guess. However, world market is generally bearish and the overall property segment outlook is reported by "someone" to be "cautious" recently, especially for high-end property. Today, a report emerges: "SP Setia falls to March low, CLSA downgrades", and SP Setia's share price fell the most in recent days (closed 12sen down and recovered from once 23 sen down), along with Mahsing (down 8 sen).

A massive intraday fall with a significantly higher volume in a significant downtrend. Could this mark (at least temporaril) the end of the downtrend or a "selling climax"? Technically speaking, its share price could stage a rebound next week. However, how long the rebound will sustain depends very much on the overall market sentiment. Don't forget the overall world market is still gloomy at this stage.

    Selling climax marks a trend reversal?

How is the future of SP Setia? Can it give us a steady revenue and profit growth at least for the next 2-3 years?

I've checked their website and found an interesting and useful presentation put up in June. Here are some of the slides.
After 6 months, net profit rises 70% from RM89.4mil to RM154.2mil, with a 30% revenue growth. The EPS is very much diluted after the 1:2 bonus issue in April. Perhaps this makes SP Setia less attractive now?

SP Setia is currently in a slightly net cash position, that's good. However, the ROE is not very good. It pays out 60% of its profit as dividend!

A glance of SP Setia's active projects. The unbilled sales are at RM3.2bil.

There are a lot of land that are still yet to be developed, especially central region with a remaining GDV of RM29.46bil?!

The 268 acres Eco Glades: The next Setia Eco Park? Will this high-end thing attracts the heart of those expatriates there in Cyberjaya?

KL Eco City should be SP Setia's next gold mine. The office block if not mistaken was sold en-bloc. One of the residential block just pre-launched in June. Anyone know how is the response?

Development in Vietnam encounters a set back and might be slow at the moment, but I believe Vietnam will experience the growth like what Malaysia has in the 1990s. Multinational company's focus will shift there soon.

SP Setia's first in Australia, the Fulton Lane apartment in Melbourne was 70% sold during its preview in Malaysia last month. It's a preview only, and grabbed by Malaysian investors.

GDV RM318mil Singapore project is pending approval.

Target total group sales for FY2011 is RM3bil. So ambitious. It achieves RM1.6bil for the first 7 months. Can it get another RM1.4bil in the next 5 months?

At RM3.89, is SP Setia worth to invest in?

I actually do not intend to buy any shares at this moment, but I can't help this time and bought some SPSETIA-WB on friday late afternoon. May be for short term play only, as it has a high possibility to drop further. US/Europe end the week with a little bit of optimism, though still surrounded by negative news.

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