On track
Profit and sales in line; HOLD
SPSB’s 4Q21 core net profit of MYR125m (+71% YoY, >+100% QoQ) was in line with our expectation but above consensus. Sales wise, SPSB’s 2021 actual sales of MYR4.26b (+11% YoY) were above its FY21 sales goal by 12% but in line with our expectation. Management has set a lower sales target of MYR4b for 2022 (-6% YoY). We adjust our FY22/23 earnings forecasts by -25%/-6%. Our TP is largely intact at MYR1.42 (-1sen; on an unchanged 0.4x FY22 PBV). HOLD.
Pick up in 4Q21 earnings post-lock down
Excluding MYR1.7m forex loss, SPSB reported 4Q21 core net profit of MYR125m (+71% YoY; from MYR10m net loss in 3Q21), bringing 2021 core net profit to MYR296m (+1x YoY; including land sales worth MYR200m) or equal to 103%/124% of our/consensus estimates. SPSB has declared a NDPS of 0.65sen; above expectation. Elsewhere, 4Q21 net gearing inched up to 0.61x, from 0.6x in end-3Q21.
Sets lower sales target for 2022
SPSB has managed to lock in property sales of MY4.26b in 2021 (65% Klang Valley; 62% of local sales were derived from Home Ownership Campaign 2021), or 12% above its FY21 sales target of MYR3.8b but in line with our sales assumption of MYR4.4b. It has set a lower sales goal of MYR4b (-6% YoY; 90% local sales) for 2022 driven by MYR4.3b worth of new launches (61% in Klang Valley; 58% priced below MYR1m/unit). As at Dec 2021, it has MYR555m worth of bookings. Unbilled sales stood at MYR10.2b (2.2x of our FY22F revenue) as at Dec 2021.
Earnings adjustments
We adjust our FY22/23 earnings forecasts by -24.9%/-6.4% to factor in 2022 sales assumption of MYR4b (-11%), actual 2021 results and the change in progress billing assumptions for its Melbourne projects.
Earnings contribution from its Melbourne and London projects will be recognised between FY22-23. SPSB now trades at 0.3x/0.4x PRNAV/PBV.