SP Setia has proposed to purchase a 268-acre piece of freehold land within the Cyberjaya Flagship Zone for M$420MM or M$36psf, which we believe is a fair price for the location. According to the company, the land is estimated to have a GDV of M$3B, with commencement of development expected to start in FY12,
spanning over six years. Management plans to replicate its success with its eco-themed development, Setia Eco Park in this new area in Cyberjaya.
Other developers like Mah Sing and UEM Land already have a presence in Cyberjaya only since the past 1-2 years, and response to their launches here have been encouraging overall.
We maintain an OW on SP Setia, but our preferred property play or top pick in the sector is IJM Land which trades at a steeper 30% discount to our RNAV versus SP Setia's 12% discount to our estimated RNAV of M$6.80/share. IJM Land is also backed by strong fundamentals and earnings growth. Our preferred entry level for SP Setia remains at below M$6.00.
Source: J.P. Morgan Research
This blog is related to observations regarding stocks traded in Malaysia. Disclaimer: The company analysis that appear in this blog is merely facts gathered from different sources and the author's personal view. It is not a buy or sell recommendation. The author do not guarantee the accuracy of the facts being presented. Please consult your investment advisors before acting on any information provided by the analysis above.
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