SP Setia shares down 12.3pc on lower Q2 profit

Shares of SP Setia Bhd, the country's biggest property developer, slid 12.3 per cent yesterday after its second quarter net profit came in below market expectations.

It fell 54 sen to RM3.84, making it the second biggest loser in the stock market.

Its net profit for the quarter ended April 30 fell by 16 per cent to RM40.5 million because of lower profit margins as the price of building materials rose.

"It is on track to meet its RM1.1 billion sales target (this year) but at the expense of profit margins," analyst Ong Chee Ting of Maybank Investment Bank said in a report yesterday.

He retained a "sell" call on the company but raised his target price to RM2.90 from RM2 given recent market liquidity and good sales achieved.

Credit Suisse downgraded the stock to "underperform" from "neutral", saying that despite strong property sales, its profit margins are under pressure.

By Business Times