Sime Darby Property (SDPR)’s 2Q23 core net profit of RM68.6m lifted 6M23 core net profit to RM126m, said Maybank Investment Bank (Maybank IB) in a recent report.
6M23 locked-in property sales of RM1.5b accounted for 65%/60% of SDPR/Maybank IB’s RM2.3b/2.5b sales goal/assumption, which were above expectations.
Of the RM1.5b locked-in sales, 40% was derived from its industrial properties, followed by residential (37%) and high-rise (21%). Given the strong sales performance, management has raised its FY23 sales target to RM2.7b (+17%).
However, judging from the total bookings of RM1.9b in early-Aug 2023, Maybank IB thinks SDPR’s new sales target is overly conservative. SDPR has revised its launch plan for FY23 from RM3b GDV to RM4b GDV. In 2H23, most new launches will be focusing on landed and high-rise products. SDPR’s unbilled sales stood at RM3.8b as at end June 2023.
Maybank IB identified several risk factors, which were the slower-than-expected property sales and longer-than-expected downturn in the property sector, delay in obtaining necessary approvals for its projects, higher-than-expected raw material costs, labour shortage that hit its project delivery which would result in Liquidated Ascertained Damages, and further impairment losses from Battersea Power Station project.
