SGP develops and manages a property portfolio across residential, retail, retirement, office and industrial assets. The shares have recovered from Februarys earnings miss with negligible follow through suggesting investors are confident with their maintained full-year guidance. Best estimates are residential development made up ~10% of SGP’s $3bn revenue in FY24 with the developer having the ability to increase supply into a strong market. With gearing at the top end of its 20-30% target range, a succession of rate cuts should ultimately help profitability on a second front. Additionally, SGP is expanding its logistics and data centre initiatives, which could add some future value.
- We can see a test of $6 by SGP, helped by its estimated 5.7% unfranked yield over the next 12 months.
MM is cautiously bullish on SGP into Christmas
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