They believe that the recent share placement by SP Setia to its major shareholders might help boost the company's acquisition plan as the exercise was expected to raise some RM1bil to finance its existing and future projects.
HwangDBS Vickers Research, in its report yesterday, said that as SP Setia build up its war-chest with the upcoming RM1bil placement and record RM1.8bil unbilled sales, the company had a knack of winning lucrative land deals, and was planning for more high-density mixed development and townships in the Klang Valley.
Kenanga Research echoed the sentiment, saying that RM300mil to RM400mil of the potential RM1bil cash from the share placement might be used to buy land.
“Hence, there is still room for more sizeable land deal in the near future,” it said in a report yesterday.
It added that the company's net gearing was still at a comfortable level of 0.26 times while cash pile remained sizeable at RM1bil as at Oct 31, 2010.
SP Setia shareholders recently approved a proposal for the placement of up to 15% of the company's issued and paid-up capital that would involve the issuance of up to 152.52 million new shares.
The share placement will involve three major shareholders in SP Setia Skim Amanah Saham Bumiputera (ASB), under the banner of Permodalan Nasional Bhd; Employees Provident Fund (EPF); and SP Setia president and chief executive officer Tan Sri Liew Kee Sin.
ASB is the largest shareholder in SP Setia with 20.12% stake while EPF has 14.47% and Liew 11.96%.
On Wednesday, SP Setia said it had bought the freehold land in Cyberjaya's flagship zone from Setia Haruman Sdn Bhd for RM420.4mil.
The land will be developed as Setia Eco Glades project by Setia Eco Villa, a 70:30 joint-venture company between SP Setia and Setia Haruman.
Liew said the project would be a mixed residential and commercial development and was expected to have a gross development value of RM3bil.
The project, targeted at high-end customers in Cyberjaya, offered RM2mil for a semi-detached house and a minimum RM3mil for a bungalow. Construction is expected to commence in financial year 2012 and will span over six years.
HwangDBS said Cyberjaya had started to come on buyers' radar screen, given its improved connectivity (20 minutes from Kuala Lumpur via new highway), increased investment by multinational companies and availability of amenities.
“Mah Sing Group Bhd's Residence and UEM Land Bhd's Symphony Hills have recently seen strong take-up at new benchmark prices,” it said.
By The Star
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