Malaysian property firm bullish about poll results

Malaysian property developer SP Setia’s chief executive expects a shakeup in the country’s politics to deal a blow to government cronies and help his company to double profit.

“I think it’s very good for us. For any company that’s open and transparent it will be very good. If you are a crony and depend on handouts you’re going to suffer,” Chief Executive Liew Kee Sin said in the most outspoken comments by a business leader since the ruling coalition’s March 8 election debacle.

“If you’re not dependent on the government to feed you things, I think you will do much better now than before.”

The election result prompted sweeping changes to the cabinet of Prime Minister Abdullah Ahmad Badawi and some big policy changes have already been signalled, including reforms to the judiciary and a review of Malaysia’s murky system of subsidies.

“What we’re concerned about is people’s sentiment, rising fuel prices, employment. That will affect buyers’ sentiment more than anything else,” Liew said.

SP Setia expects to double 2007 earnings within four years and predicts that its Vietnamese business will turn a profit by 2009.

Speaking in an interview on the sidelines of an investor conference, Liew said he expected sales to rise by 56 percent to 1.8 billion ringgit ($566 million) this year from last, beating the average forecast of 1.3 billion by 14 analysts polled by Reuters Estimates.

“We are saying that by 2012 we will double our profit but it won’t be a smooth ride. By 2012, I want our overseas business to contribute at least 30 percent of profit. By 2009 Vietnam will start to contribute to profit.”

Liew, who owns 12 percent of the company’s shares and travels to Vietnam once a week to oversee SP Setia’s expansion there, also said its domestic business was on track and said investor concern over delays of project launches was unjustified.

SP Setia shares have lost 27 percent of their value since the start of the year due to poor investor sentiment resulting from political uncertainty and the global financial crisis, valuing the company at $1.2 billion. They have underperformed the Kuala Lumpur stock market, which has dropped 14 percent in the same period. SP Setia owns 4,700 acres (1,900 hectares) of land worth 30 billion ringgit. Less than 10 percent of its land is earmarked for commercial property.