The stock fell as much 11% or 12 sen to 94 sen before paring its losses to settle at 97 sen, down 8.5%, at the mid-day break with 20.5 million shares traded.
At this price, the group is valued at RM4.85 billion. The shares have risen 29.3% year to date.
The company’s net profit for the first quarter ended March 31 (Q1 FY2026) tumbled 53.6% to RM31.12 million from RM67.02 million a year ago, weighed down by lower sales and higher foreign exchange losses.
This was its lowest quarterly profit since Q3 FY2021 when it posted a net profit of RM11.01 million.
However, quarterly revenue rose 7.25% to RM826.54 million from RM770.7 million a year earlier, according to its bourse filing yesterday.
SP Setia booked a higher realised foreign exchange loss of RM5.87 million and unrealised forex loss amounting to RM14.42 million in Q1. No dividend was declared for the quarter.
Hong Leong Investment Bank (HLIB) has downgraded its call on SP Setia to “hold” from “buy” and lowered its target price (TP) to RM1 from RM1.40 previously.
The earnings came in below expectations, accounting for only 3.4% and 2.4% of HLIB’s and consensus full-year forecasts, respectively.
In a note today, the bank attributed the weaker performance to lower-than-expected property sales and margins.
It noted SP Setia recorded new sales of RM555 million in Q1, representing just 12.1% of its full-year sales target of RM4.6 billion.
It launched RM900 million worth of projects during the quarter, equivalent to 16.8% of its FY2026 launch target of RM5.36 billion.
HLIB highlighted rising downside risk to earnings, given SP Setia’s high fixed cost structure, expectation of tapering land sales, and modest growth in its central region residential sales.
However, it expects earnings to improve over the next few quarters as the group recognises around RM650 million worth of industrial land sales from its Setia Alaman Industrial Park in Selangor, between the second quarter of 2026 and the first quarter of 2027.
Meanwhile, TA Securities has maintained its “buy” call on the stock with a slightly lower TP of RM1.32.
“Despite the weak Q1, we remain constructive on SP Setia’s medium-term outlook. Earnings should improve from Q2 FY2026 as Setia Alaman recognition comes through, while sales remain supported by a sizeable launch pipeline and pending Vietnam sales recognition,” it said.