The property market remains subdued in the short-to-medium term, AmInvestment Bank Bhd (AmInvestment Bank) observed in a reinitiation company report on S P Setia Bhd (SP Setia).

According to AmInvestment Bank, the property market remains subdued as many potential buyers are having difficulty in obtaining loans.

"In thes hort-to-medium-term, the property market remains subdued with many potential buyers having difficulty in obtaining loans due to their already high debt service ratios," the research firm said.

Nonetheless, AmInvestment Bank believed the outlook for SP Setia shall remain stable premised on its strong unbilled sales of RM7.92 billion and overseas contribution in 2020.

"Meanwhile, a lack of overseas contributions and slow progress billings from local projects are the key factors for weaker earnings in 2018.

"Moreover, management noted that there was no evident pickup in sales during the month of October 2018 and conditions remain challenging."

As there is little upside potential, AmInvestment Bank reinitiated coverage on SP Setia with a 'hold' recommendation, pegging a fair value of RM2.39 per share.

The research firm expected the company to register core net earnings of RM263.6 million, RM352.9 million and RM402.8 million for financial year 2018 (FY18), FY19 and FY20 respectively.