KUALA LUMPUR: RHB Research Institute is maintaining an Outperform on SP Setia, with an unchanged fair value of RM8.05, based on 30x CY11 earnings.
The research house said on Monday, Jan 17 that with more news flow on SP Setia's landbanking efforts (plus the recent successful bid for the Penang International Convention Centre project), the company has shown its strength and reputation for successfully bidding for land deals (from the Government), which hence differentiates itself from the other developers.
RHB Research said this explains the large valuation premium against its peers.
It also quoted'' The Edge weekly that the Government will swap with SP Setia the Institute for Medical Research (IMR) land in Jalan Bangsar for the CONSTRUCTION [] of a new 1National Institute of Health (1NIH) integrated complex at Setia Alam.
The land parcel in Setia Alam together with construction of the proposed 1NIH is estimated to cost RM600-700m.
'This implies that the 40-acre IMR land in Bangsar is valued at a price of RM402 psf, which is around the market value that we checked with some valuers.
'The Bangsar IMR land is expected to be developed into an integrated complex of residential and high-rise office buildings. Assuming a plot ratio of 9, efficiency ratio of 65% and average selling price of RM800 psf (benchmarking with KL Sentral), this piece of land could potentially yield a GDV of RM8.2bn,' it said.
The research house said on Monday, Jan 17 that with more news flow on SP Setia's landbanking efforts (plus the recent successful bid for the Penang International Convention Centre project), the company has shown its strength and reputation for successfully bidding for land deals (from the Government), which hence differentiates itself from the other developers.
RHB Research said this explains the large valuation premium against its peers.
It also quoted'' The Edge weekly that the Government will swap with SP Setia the Institute for Medical Research (IMR) land in Jalan Bangsar for the CONSTRUCTION [] of a new 1National Institute of Health (1NIH) integrated complex at Setia Alam.
The land parcel in Setia Alam together with construction of the proposed 1NIH is estimated to cost RM600-700m.
'This implies that the 40-acre IMR land in Bangsar is valued at a price of RM402 psf, which is around the market value that we checked with some valuers.
'The Bangsar IMR land is expected to be developed into an integrated complex of residential and high-rise office buildings. Assuming a plot ratio of 9, efficiency ratio of 65% and average selling price of RM800 psf (benchmarking with KL Sentral), this piece of land could potentially yield a GDV of RM8.2bn,' it said.
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