S P Setia Bhd ("SPSetia") is involved in property development, construction & infrastructure. Its property development projects in Malaysia are located in the Klang Valley, Johor & Penang. Its overseas projects are located in Vietnam, Singapore, Australia & UK.
Past Financial Results
In the past 10 years, SPSetia's top-line & bottom-line have been in an uptrend. Even though its profit margins have dipped somewhat in the past 2 years, the bottom-line still inched up due to string top-line growth.
Chart 1: SPSetia's last 10 years' financial performance
Recent Financial Results
In the past 21 quarters, SPSetia's bottom-line was boosted by the recognition of income for the Fulton Lane development.
Chart 2: SPSetia's last 10 quarters' financial performance
Financial Position
As at 31/7/2015, SPSetia's financial position is deemed satisfactory with current ratio at 2.3 times while gearing ratio stood at 1 time.
Valuation
SPSetia (closed at RM3.15 last Friday) is now trading at a PER of 11 times (based on last 4 quarters' EPS of 28 sen). At this PER, SPSetia is deemed fairly valued.
Technical Outlook
SPSetia is in a long-term uptrend line that dates back to 1998. The support of that uptrend line is at RM3.00 which it tested recently. If it can surpass the RM3.75 mark, its uptrend should accelerate.
Chart 2: SPSetia's monthly chart as at Sep 11, 2015 (Source: ShareInvestor.com)
Conclusion
Based on good financial performance, reasonable valuation & positive technical outlook, SPSetia is a good stock for long-term investment.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, SPSetia.
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