RM4 billion sales target lowered to RM3.5 billion, market uncertainty

On the way to Singapore yesterday (24 Aug), I happened to read the business section of The Star and there were the financial results of at least 9 companies. All the companies were reporting a better Q2 2016 versus Q2 2015. All have positive results and none sunk into huge losses too. I think this has shown some resiliency and that not everything is as bad as what many believe. Before boarding the plane, I was at a pharmaceutical company which told me that they will be launching new products and that it would take the market by storm. Well, positive news are good.
Then I read about SP Setia which has continuously been launching many new projects. SP Setia has revised its sales target for FY16 downwards. Formats earlier targeted RM4 billion, it is now lowered to RM3.5 billion. It shared in int interim report to Bursa Malaysia.“In view of the global uncertainty, especially post-Brexit and the continued weak sentiment in the Malaysian property market, the group sales target for FY16 has been lowered from RM4bil to RM3.5bil.” Its CEO Khor shared some positive results of its launches recently including the 100% take-up rate of Setia Eco Templer, Selayang, in May and an encouraging 72% take-up rate of Everna cluster semi-detached homes, Setia EcoHill 2 at Semenyih.
Moving on, SP Setia would also be launching other projects such as Maison Carnegie, Melbourne, ViiA Residence at KL Eco City, Setia Sky Ville at Jelutong, Penang, Setia Sky Seputeh (Tower A) at Taman Seputeh and Trio by Setia (Tower 1) at Bukit Tinggi, Klang. For the first half of 2016, S P Setia earned RM249.17mil on revenue of RM1.92bil. This is a profit margin of 13 percent. Not the highest this year but is certainly still within double digits under current circumstances.
When big names are lowering their sales targets, it does give a slightly negative perception of the property market. Let’s see what happens to all their upcoming launches to gauge the market further. As for those needing a home, the advice remains the same. Find a good one before buying. Happy following.
written on 24 Aug 2016
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