S P Setia is aiming for an asset-light strategy for competitiveness

S P Setia is aiming for an asset-light strategy for competitiveness

Some public listed companies sell their assets because they need cash to repay debts. This is so that they do not need to service huge interests on those debts. Some companies prefer to buy assets which can provide stable returns. For example, buying a mall which is has over 85 percent occupancy. Some companies will prefer not to hold too much assets which does not generate returns beyond potential appreciation many years later.

In other words, they may want to aim at an asset-light status. Perhaps holding more cash would also allow the company to take up any potential investments when needed without worrying too much about taking on unnecessary debts. The below seems to be one such company and it had just sold a piece of land for RM392 million.

Article in nst.com.my. S P Setia Berhad announced that the completion of the 500-acre land sale in Glengowrie, Semenyih, for RM392 million will enable the company to reallocate resources to significant projects and reduce debt. 

President and chief executive officer Datuk Choong Kai Wai said that this move aligns with the company’s asset-light strategy to enhance competitiveness.

“It also enables us for future growth, fostering a more dynamic and innovation-driven approach, allowing us to seize new opportunities, which increases profitability and stakeholder value,” he said in a statement.

The disposal aligns perfectly with the company’s vision of focussing on impactful projects and ensuring resource efficiency. Do read the article in full here: Article in nst.com.my.

So, are you thinking of S P Setia’s stock then?

I do not own any shares in S P Setia but the below are its latest stats, as at 6th August 2024.

If we bought at their lowest price within 52-weeks, the dividend yield would be double the current number states. If we buy at current price, then the dividend yield is 1.08 percent. It’s not high but if we are looking for dividends alone, then there are certainly better choices too. For S P Setia, probably you are looking at potential capital appreciation as they continue their property developments with a recovering economy. Happy deciding.

Please share with people you care. You can get daily updates too.

Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER). 

Alternatively, Follow me on Telegram here.

Please LIKE kopiandproperty.com FB page to get daily updates about the property market beyond kopiandproperty.com articles.