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- Net profit, excluding extraordinary items, has reached about 80% of the consensus full-year forecast with just one quarter left before the year ends, prompting revisions of estimates. The company is on track to meet or even exceed its own sales target, analysts said.
KUALA LUMPUR (Nov 21): Sime Darby Property Bhd (KL:SIMEPROP) rose on Friday after reporting a set of stronger-than-expected results, and analysts are now unanimously bullish on the stock.
Net profit, excluding extraordinary items, has reached about 80% of the consensus full-year forecast with just one quarter left before the year ends, prompting revisions of estimates. The company is on track to meet or even exceed its own sales target, analysts said.
“We believe this puts the group firmly on track to surpass guidance and deliver growth,” CGS International said in a note.
Sime Darby Property now has ‘buy’ calls from all 13 research firms tracking the stock following upgrades from Maybank Investment Bank and Public Investment Bank. The average target price has been raised to RM1.90, a potential upside of about 37% in the next 12 months, according to Bloomberg.
The stock rose as much as six sen or nearly 5% to RM1.39 on Friday morning. It was trading at RM1.38 after more than two million shares changed hands as at 9.45am. The real estate group has a market capitalisation of over RM9 billion based on the last price.
Shares of Sime Darby Property have fallen 18% year to date, reflecting broader weakness in the real estate sector. The Bursa Malaysia Property Index itself is down around 9% so far this year.
Sales totalled RM3.4 billion so far this year, putting Sime Darby Property’s target of RM3.6 billion within reach. The company, which has amassed total bookings of RM1.5 billion, is planning another RM1.5 billion worth of new launches in the final months of 2025.
The consensus now points to Sime Darby Property making a net income of RM568 million for the whole of 2025.
Beyond 2025, the upcoming completion of the East Coast Rail Link is expected to boost land sales as well as rental yields from Sime Darby Property's industrial investment assets surrounding the Klang station, Hong Leong Investment Bank said.
The company’s early-mover advantage in the industrial property segment has translated into strong gross profit margins and faster billing cycles, and earnings visibility is also supported by higher recurring income streams from its investment property portfolio, the house noted.
“We continue to view the stock as a multi-year growth story, anchored by its exposure to the thriving industrial segment and the resilient residential landed [property] demand in the Greater Klang Valley,” Hong Leong Investment Bank added.
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