Company Coverage
SP Setia (SPSB MK): 2Q26: Below Expectations; Growing Non-Residential Projects
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
RM0.845
RM1.06
+25.9%
RM1.22
Analyst
Highlights
Results were below our expectations due to lower-than-expected residential revenue recognition.
While residential demand is softer, management expects to bridge the gap with higher sales contribution from the industrial and commercial segments, which typically generate higher margins.
Maintain BUY with a lower target price of RM1.06. While the REIT listing is now targeted for 2Q27 (1Q27 previously), investor sentiment could gradually improve on faster monetisation from industrial and commercial landbank.
Analysis
Below expectations. SP Setia’s 2Q26 core PATAMI came in at RM67m (+44% qoq, -40% yoy) on the back of a revenue of RM821m (-1% qoq, -13% yoy). This brings 1H26 core PATAMI to RM113m (-37% yoy), accounting for 29%/30% of our and consensus full-year forecasts, slightly behind our full-year expectation due to weaker-than-expected residential revenue. As of end 2Q26, unbilled sales were at RM3,975m (-6% qoq, +2% yoy).
Highlights
Results were below our expectations due to lower-than-expected residential revenue recognition.
While residential demand is softer, management expects to bridge the gap with higher sales contribution from the industrial and commercial segments, which typically generate higher margins.
Maintain BUY with a lower target price of RM1.06. While the REIT listing is now targeted for 2Q27 (1Q27 previously), investor sentiment could gradually improve on faster monetisation from industrial and commercial landbank.
Analysis
Below expectations. SP Setia’s 2Q26 core PATAMI came in at RM67m (+44% qoq, -40% yoy) on the back of a revenue of RM821m (-1% qoq, -13% yoy). This brings 1H26 core PATAMI to RM113m (-37% yoy), accounting for 29%/30% of our and consensus full-year forecasts, slightly behind our full-year expectation due to weaker-than-expected residential revenue. As of end 2Q26, unbilled sales were at RM3,975m (-6% qoq, +2% yoy).
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
RM0.845
RM1.06
+25.9%
RM1.22
Analyst
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