SP Setia shares rise despite downgrades

On Wednesday, the property developer reported lower fourth quarter and full-year results as costlier fuel and building materials eroded profits. SP Setia's fourth quarter net profit fell 24 per cent to RM76 million.

Aseambankers retained its "sell" call and cut SP Setia's target price to RM2.20 from RM2.70.

"With unbilled sales now at RM950 million, earnings visibility has dropped to less than a year," analyst Ong Chee Ting said.

Credit Suisse maintained its "neutral" call on SP Setia, but lowered its target price to RM3.25 from RM3.50. While expecting consumer sentiment to remain poor, the analyst estimates the current financial year''s new property sales to fall to RM1.1 billion.
"We expect 2009 to be a challenging year for all property developers including SP Setia," he said.

OSK Research downgraded SP Setia to "neutral" from "buy", but maintained its target price at RM3.14.



ECM Libra advised investors to hold SP Setia's shares and kept the target price unchanged at RM2.62. Its analyst said while he likes SP Setia's execution track record, valuations at current levels are not compelling.

By Business Times