S P SETIA RESEARCH PAGE

AUGUST 2022
What does S P Setia do?

Investor Relations Statement: Our commitment as Malaysia’s market leader in property

development is to deliver sustainable value to stakeholders.

As presented in the Investor Relations, S P Setia delivers itself as Malaysia’s leading property
development enterprise. It is a publicly traded company and the largest in its industry by property
sales. The company has also diversified into construction, infrastructure, wood-based manufacturing,
and trading. S P Setia’s main influence arises in three prime economic locations in Malaysia, Klang
Valley, Johor and Penang and Kota Kinabalu in Sabah. Established in 1974 and since has earned an
array of awards, garnered through its home grown, innovative and environmentally sustainable
projects.

The company predicates itself on its ability to impress customers through its organisational
excellence and overall experience. Team Setia, a name designated to the collective association of S P
Setia’s members, establishes itself on 10 key values, a personal pledge of accountability to its
customers, personal self, the organisation, the environment and its fellow team members. They
include upholding noble virtues like integrity and responsibility, as well as respecting their peers and
the environment.

The company also delves into its share of charitable efforts through The S P Setia Foundation. The
subsidiary attempts to aid in many global and domestic issues such as

Property Development

Prioritised and held in regard for its sustainable development, the company is a leading provider in
efficacious and sustainable construction methods including precast construction for the
superstructure and advanced technology system formwork which allow for increased efficiency and
minimal wastage. Its property development sector focuses on 4 sectors, township developments,
eco-themed developments, integrated and niche developments.
Mergers and Acquisitions Timeline

[May 2009] I&P Merge driven by Permodalan Nasional Berhad (PNB) of three companies, Island
and Peninsular Berhad, Petaling Garden Berhad and Pelangi Sdn Berhad.

[2011] Permodalan Nasional Berhad (PNB) takes over S P Setia as majority shareholder at RM 3.90
a piece for its shares and values the company at 6.9 billion ringgit.

PNB Launches Takeover of S P Setia, (2011)

[2017] Permodalan Nasional Berhad (PNB) will see the merger of its two property investments, S P
Setia Berhad and I&P Group Berhad

- S P Setia buys sister company I&P Group Berhad for: RM 3.65 billion
- This allows it to double its landbank and fast track its expansion plans
- Such would allow the formation of the largest land bank company in Malaysia with close to
10,000 acres

PNB Merge S P Setia To Form One Of The Largest Property Players, (2017)

Challenges:
 - The local market was soft hence the company had to navigate through the unsteadiness
- Pre GE-14 a lot of people adopted a wait-and-see stance
- Singapore came up with ABSD [in July]
- Talks of Brexit
- Went under staff rationalisation

Mergers and Acquisitions Plans

As of now there are no merger and acquisition plans for the near future.

S P Setia Deals That Went Wrong

[2022] Maxter Glove Manufacturing Sdn Bhd has scrapped its plan to acquire two parcels of land
from SP Setia Berhad’s subsidiary, Bandar Setia Alam Sdn. Berhad.

- Proposed land acquisitions by Maxter was contingent on obtaining Economical Planning

Unit’s approval (EPU)
- Total deposit and stamp duty was refunded to the company in January as well as the caveat
on the two land parcels being withdrawn
- Recap, 2020 September, Supermax announced Maxer had gotten into a sales agreement,
(SPA) for 73.49 Million RM to build it’s headquarters
- The EPU had approved of it as it passed the 30% Bumiputera equity ownership, march 2021
- May, Maxter had applied to waive the EPU condition
- Dec, EPU rejected the appeal of waiver
- Under 2A.4 of the agreement, Maxter was able to deny the SPA and terminate the
agreement if it did not like the conditions

Supermax Unit Terminates Land Deal with S P Setia, (2022)

[June 12 2022] Battersea Power Station Development is being closely investigated as state
funds were used as an investment in the building.
 - Anwar has stated that Battersea’s new deal in London of its renovation and project had been
used with state funds and the government needs to reassess and ascertain that the funds
were used for proper investment over political gain
- Battersea’s website shows it was driven by a group of companies, S P Setia being one of them

Malaysia to Investigate Battersea Power Station Property Deal with Anwar Ibrahim, (June 12 2022)

[2011] S P Setia’s deal with Umno foundation raises questions [KL Eco City Deal]
- S P Setia makes a deal with Umno Foundation worth 75 Million RM
- They own 60% of KLEC property opposite Mid Valley City with DBKL
- Deal was seen as shady by many

KL Eco City S P Setia's Deal with Umno Foundation Raises Questions, (2011)

[April 2022] S P Setia’s deal to raise 1.18 Billion from Rights Issue
- They proposed to take a renounceable rights issue of a new Class C Islamic redeemable
convertible preference shares (RCPS- i C) to raise the money
- They did this to raise the proposed shares to redeem all the (RCPS-i B) in 2017
- In recap the B’s were used to raise 2 Billion over ringgit for the acquisition of I&B in that
timeframe

S P Setia Smart Development for Cities

As of 2020 S P Setia will introduce smart-home features to its upcoming landed residential areas. In
order to understand consumer markets, the developers have unveiled their Experience Lab in Setia
EcoHill Club 360.
Setia EcoHill general manager Koh Sooi Meng in a press statement:
“The Experience Lab will also equip buyers with knowledge on value-added features that are
available in the market and gauge their response towards futuristic technologies before adapting
them into other Setia developments,”.

The Experience Lab showcases a futuristic smart-home system from Blu Guard, engineered timber
flooring, digital lockset and dry wall system which will be implemented in many of their
double-storey terrace houses.

S P Setia Include Smart Home Features Upcoming Launches, (November 01 2019)

Tenaga Nasional Bhd (TNB) has formed a partnership with SP Setia Bhd to provide smart energy and
renewable energy (RE) solutions to the latter's future property developments.

- These include the installation of a rooftop solar photovoltaic (PV) system as well as ensuring
the properties are future-ready to support the installation of battery solution in SP Setia's
upcoming residential and commercial developments.
TNB S P Setia Offer Smart Energy Re Solutions Latters Future Projects, (April 12 2022)

S P Setia Bhd’s KL Eco City (KLEC) has won the Gold Award of FIABCI World Prix d’Excellence 2020
Awards in the Office category, making it the developer’s 12th FIABCI World Gold award.

- KLEC is a transport-oriented integrated green development located strategically between

Petaling Jaya and Kuala Lumpur. With a GDV of over RM7 billion, KLEC was founded based on
the pillars of integration, connectivity and sustainability. It comprises prime commercial
offices, retail outlets, luxury residential towers and a chic business class hotel.

KL Eco City Gives S P Setia its 12th Fiabci World Gold, (July 12 2020)
Sustainability Front

Taken from the Sustainability Statement

They successfully installed 37 thermal scanner devices across our offices and sales galleries/welcome
centres in Malaysia as well as seven (7) units across Centralised Labour Quarters ("CLQs") which are
occupied by our workers. The initiative involved a total investment cost of RM296,376. At project
sites, we implemented ID tags with QR Codes to monitor the movement of construction workers
within sites. Screening of construction workers was also conducted.
S P Setia Issues and Scandals

Frankly Speaking: S P Setia bulks up for Battersea

The project in London, whose development is at phase 2 and 3, has been facing headwinds since
2016. It is unusual for a property project to encounter delays in London as the demand for housing
far exceeds supply.

Nevertheless, it resulted in S P Setia recognising an impairment of £62.4 million last year.

The London property market has been weak mainly because the UK decided to leave the European
Union following a referendum in 2016. Brexit was finally resolved in 2019/20 but subsequently, the
global property market was hit by the Covid-19 pandemic.

Frankly Speaking: S P Setia bulks up for Battersea | The Edge Markets, (May 10 2021)

S P Setia's 2-for-15 rights issue fixed at RM2.65 apiece

The rights issuance is being undertaken on the basis of two rights shares for 15 existing S P Setia
shares (2-for-15), while the RCPS-i B issuance is to be implemented on the basis of 2 RCPS-i B for
every five existing S P Setia shares held (2-for-5).
In a filing with Bursa Malaysia, it also announced that the conversion rate for the RCPS-i B would be
at five new S P Setia shares for every 21 RCPS-i B held.

The rights issue and renounceable rights issue of the RCPS-i B are expected to raise RM1.2 billion per
exercise, or RM2.4 billion in all.

S P Setia's 2-for-15 rights issue fixed at RM2.65 apiece | The Edge Markets, (November 16 2017)

S P Setia Raise RM 1.18 Billion on Rights Issue

Property developer S P Setia Bhd has proposed to undertake a renounceable rights issue of new class
C Islamic redeemable convertible preference shares (RCPS-i C) to raise up to RM1.18 billion on an
entitlement date to be determined later.

The group intends to utilise the gross proceeds raised from the proposed exercise to redeem all
outstanding RCPS-i B which were issued in December 2017 and to repay borrowings. As at April 8,
2022, it had 1.18 billion RCPS-i B amounting to RM1.04 billion in issue.

S P Setia Raise RM 1.18 Billion on Rights Issue, (April 27, 2022)

S P Setia shares down on weaker-than-expected 1Q results,

S P Setia Bhd shares on Bursa Malaysia went down in the early trading session on Tuesday (May 24)
after it posted a weaker-than-expected revenue for the first quarter ended March 31, 2022 (1QFY22)
due to supply chain disruptions which also affected margins.

S P Setia shares down on weaker-than-expected 1Q results, (May 24, 2022)

S P Setia Board Composition

BOARD COMPOSITION TABLE

Y.A.M TAN DATO’ DATO’ DATO’ DATO’ DATO’ TENGKU NORAINI PHILIP DATO’
2018 SRI DATO’ KHOR HALIPAH AHMAD SERI IR. ZURAIDAH DATO’ AB. BINTI CHE TAN PUAY AZMI BIN
SERI SYED CHAP JEN BINTI ESA PARDAS HJ. MOHD BINTI AZIZ BIN DAN KOON MOHD ALI
ANWAR BIN SENIN NOOR BIN ATAN TENGKU
JAMALULL YAACOB MAHMUD
AIL

Y.A.M TAN DATO’ DATO’ DATO’ DATO’ DATO’ TENGKU NORAINI PHILIP DATO’
2019 SRI DATO’ KHOR HALIPAH AHMAD SERI IR. ZURAIDAH DATO’ AB. BINTI CHE TAN PUAY AZMI BIN
SERI SYED CHAP JEN BINTI ESA PARDAS HJ. MOHD BINTI AZIZ BIN DAN KOON MOHD ALI
ANWAR BIN SENIN NOOR BIN ATAN TENGKU
JAMALULL YAACOB MAHMUD
AIL

Y.A.M TAN DATO’ DATO’ DATO’ DATO’ DATO’ TENGKU NORAINI PHILIP DATO’
2020 SRI DATO’ KHOR HALIPAH AHMAD SERI IR. ZURAIDAH DATO’ AB. BINTI CHE TAN PUAY AZMI BIN
SERI SYED CHAP JEN BINTI ESA PARDAS HJ. MOHD BINTI AZIZ BIN DAN KOON MOHD ALI
ANWAR BIN SENIN NOOR BIN ATAN TENGKU
JAMALULL YAACOB MAHMUD
AIL

Y.A.M TAN DATO’ DATO’ DATO’ DATO’ TENGKU PHILIP DATO’ DATO’ DATUK
2021 SRI DATO’ SERI IR. AHMAD ZURAIDAH HALIPAH DATO’ AB. TAN PUAY AZMI BIN MERINA CHOONG
SERI SYED HJ. MOHD PARDAS BINTI BINTI ESA AZIZ BIN KOON MOHD ALI BINTI ABU KAI WAI
ANWAR NOOR BIN BIN SENIN ATAN TENGKU TAHIR
JAMALULL YAACOB MAHMUD
AIL

S P Setia Q and A Evaluation

1. Among the assets, the Company has sold a 960-acre plot in Taman Pelangi Indah II in Johor,
which in the Company’s post evaluation, was not ideal for development. [Page 20 of IR]

The buyer of the 960-acre plot in Taman Pelangi Indah II in Johor is Scientex Quatari Sdn Bhd, which
is a wholly owned subsidiary of Scientex Berhad. The Group has yet to recognise any profit from this
land disposal, as the land disposal is still subject to the fulfilment of conditions precedent, chiefly
being the approval from the Economic Planning Unit. The disposal will complete in 3 different phases
/ parcels successively in 2022, 2023 and 2024. The potential profit before tax expected from this land
disposal is approximately RM383 million. b) The disposal of 2.21-acre parcel at Setia City in Setia
Alam is also pending the fulfilment of conditions precedent, chiefly being the approval from the
Economic Planning Unit. As such, the Group has yet to recognise any profit from this disposal. The
potential profit before tax expected from this sale is approximately RM19 million. c) Similarly, the
disposal of 6.75-acre plot in EcoLakes Vietnam is also pending the fulfilment of certain condition
precedent. Therefore, the Group has yet to recognise any profit from this disposal. However, the
disposal is potential to contribute RM21 million profit before tax to the Group upon its completion.
 2. How much does the company spend on this virtual Agm? Would the board kindly consider
giving shareholder with e-wallet as a token of appreciation for attending today’s RPV. I
would like to request a printed hard copy of the company annual report

The cost of the 47th AGM is approximately RM47,500 (excluding out of pocket expenses). The
printed Integrated Report 2021 will be sent today