17E TP Bt2.90 - Global Alliance Partners
Quality Houses Buy (17E TP Bt2.90)
Earnings Review
Close Bt2.46
Property Development August 9, 2017
Beat forecast/Below forecast/In line
2Q17 earnings declined 13.2% YoY but increased 18.9% QoQ Results date: August 8, 2017 Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.310
0.337
KT ZMICO vs. consensus Share data
3.2%
‐5.0%
Reuters / Bloomberg
QH.BK/QH TB
Paid‐up Shares (m)
10,714.38
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
26.00/793.00
Foreign limit / actual (%)
40.00/35.09
52 week High / Low (Bt)
2.86/2.24
Avg. daily T/O (shares 000)
28,431.00
NVDR (%)
4.74
Estimated free float (%)
63
Beta
1.01
URL
www.qh.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Maintain Buy with the TP of Bt2.90 We maintain QH’s rating as Buy with the 17E TP of Bt2.90. The catalysts that should support QH’s share price are as follows: i) the expectation of booking extra gain of Bt695mn, which is a non‐cash item, on shareholding dilution of LHBANK in 3Q17E; and ii) a 1H17 DPS of Bt0.07, implying a dividend yield of 2.8%. 2Q17 earnings declined 13.2% YoY but increased 18.9% QoQ QH reported 2Q17 net profit at Bt776mn (-13.2% YoY, +18.9% QoQ), 4% above our estimate, mainly due to higher‐than‐expected transfers. 2Q17 transfers were 11% above our forecast at Bt4.12bn (‐20.8% YoY, +31.5% QoQ). The average GPM was 27.5%, lower than our forecast at 29.4%, on a lower GPM for both low‐rise and condo projects to boost transfers. However, the SG&A expense‐to‐revenue ratio was only 16.5%, which was below our estimate at 18.0%, enabling the 2Q17 earnings to beat our estimate. Maintain 2017E forecast QH's 1H17 net profit was 42% of our full‐year estimate, which is maintained at Bt3.4bn (+10.7% YoY). We expect QH’s earnings to be better HoH in 2H17E as there are more new completed condos and low‐ rise projects to be realized in the period. Announced 1H17 DPS of Bt0.07, implying 2.8% yield QH announced an interim DPS of Bt0.07 for its 1H17 performance, implying a 2.8% yield. The stock will go XD on August 21 and the dividend will be paid on September 5, 2017. Financials and Valuation FY Ended 31 Dec Revenues (Btm) Net profit (Btm) EPS (Bt) EPS growth (%) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) Normalized PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 21,220 3,329 0.36 0.7 0.37 3.9 0.26 2.09 2014 6.8 6.7 13.9 1.2 10.6 17.4 123.9
2015 20,358 3,106 0.29 (20.0) 0.29 (21.3) 0.14 2.01 2015 8.5 8.5 17.5 1.2 5.7 14.4 111.2
2016 19,125 3,085 0.29 (0.7) 0.29 0.0 0.15 2.14 2016 8.5 8.5 20.1 1.1 6.1 13.4 98.5
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 20,042 3,416 0.32 10.7 0.32 10.7 0.16 2.31 2017E 7.7 7.7 17.9 1.1 6.5 13.8 91.4
2018E 21,422 3,443 0.32 0.8 0.32 0.8 0.16 2.47 2018E 7.7 7.7 17.3 1.0 6.5 13.0 82.0
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
2Q16
1Q17
2Q17
% YoY
% QoQ
1H17
% YoY
2017E
% YoY
Revenue from project sales Total revenue Gross profit
5,208 5,480 1,602
3,135 3,450 1,027
4,123 4,411 1,215
(20.8) (19.5) (24.1)
31.5 27.9 18.3
7,258 7,861 2,242
(28.2) (26.5) (30.1)
18,824 20,042 6,109
5.0 4.8 5.9
YTD (% 2017E) 38.6 39.2 36.7
EBITDA
642
369
498
(22.5)
34.8
867
(27.6)
2,742
12.5
31.6
Interest expense
(84)
(79)
(89)
6.0
13.3
168
(3.2)
(330)
(1.8)
50.9
Other income
34
49
63
85.7
30.1
112
50.2
130
(23.7)
86.0
Income tax
(138)
(75)
(103)
(25.4)
36.7
(178)
(28.8)
(493)
12.1
36.0
Gn (Ls) from affiliates
413
390
409
(1.0)
4.8
799
5.4
1,667
4.5
48.0
Net profit (loss)
895
653
776
(13.2)
18.9
1,429
(12.8)
3,416
10.7
41.8
Core net profit (loss)
895
653
776
(13.2)
18.9
1,429
(12.8)
3,416
10.7
41.8
Reported EPS (THB)
0.08
0.06
0.07
(13.2)
18.9
0.13
(12.8)
0.32
10.7
41.8
Core EPS (THB)
0.08
0.06
0.07
(13.2)
18.9
0.13
(12.8)
0.32
10.7
41.8
Gross margin – project sales (%)
28.9
29.0
26.9
27.8
30.1
Gross margin ‐ overall (%)
29.2
29.8
27.5
28.5
30.5
EBITDA margin (%)
11.7
10.7
11.3
11.0
13.7
Net margin (%)
16.3
18.9
17.6
18.2
17.0
Current ratio (x)
3.2
2.2
2.0
2.0
2.7
Interest coverage (x)
8.3
5.3
6.2
5.7
7.8
Debt / equity (x)
1.4
1.3
1.3
1.3
1.1
BVPS (Bt)
2.1
2.2
2.2
2.2
2.3
ROE (%)
15.7
12.9
12.2
13.8
12.2
Source: QH, KT ZMICO Research
Figure 2: Presales
Figure 3: Backlog at end 1Q17
Btmn 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 ‐
Low rise
Total Backlog Bt5,700mn
2017E 3,500
1H16 1H17
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 3Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
2018E 2,200
High rise
Source: QH, KT ZMICO Research
Source: QH, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2014 21,220 (14,313) 6,907 (3,881) 3,341 179 3,163 255 137 3,958 628 0 (31) 1,060 3,329 0.36 0.36 3,360 0.37 0.26
2015 20,358 (14,000) 6,358 (3,849) 2,882 191 2,691 329 183 3,632 525 0 22 1,233 3,106 0.29 0.29 3,084 0.29 0.14
2016 19,125 (13,356) 5,770 (3,691) 2,438 190 2,248 335 170 3,525 440 0 0 1,595 3,085 0.29 0.29 3,085 0.29 0.15
2017E 20,042 (13,933) 6,109 (3,684) 2,742 187 2,555 330 130 3,909 493 0 0 1,667 3,416 0.32 0.32 3,416 0.32 0.16
2018E 21,422 (14,840) 6,582 (4,120) 2,782 190 2,592 315 130 3,947 505 0 0 1,654 3,443 0.32 0.32 3,443 0.32 0.16
2014 1,458 74 24,949 10,569 1,227 48,634 6,592 18,600 29,485 9,184 19,149 48,634
2015 2,837 58 29,098 9,245 1,036 52,998 8,810 17,987 31,452 10,714 21,545 52,998
2016 2,888 50 28,835 9,823 576 53,014 7,498 17,989 30,075 10,714 22,940 53,014
2017E 350 61 28,472 10,612 601 52,448 7,274 15,700 27,700 10,714 24,748 52,448
2018E 350 62 27,221 11,306 643 53,511 8,979 13,100 27,028 10,714 26,483 53,511
2014 3,329 (1,982) 179 (4,997) (3,471) (493) 384 (109) 4,887 0 (1,469) (10) 3,407 (172) (2,845) (0.31)
2015 3,106 (958) 191 (1,397) 942 (74) 673 599 1,603 0 (706) (1,059) (162) 1,379 (12,572) (1.17)
2017E 3,416 (1,697) 187 (352) 1,554 (50) (91) (141) (2,510) 0 (1,607) 166 (3,951) (2,538) 1,504 0.14
2018E 3,443 (1,684) 190 713 2,662 (50) (3) (53) (887) 0 (1,708) (15) (2,609) 0 2,612 0.24
2014 7.7 0.9 0.7 32.5 15.7 14.9 15.7 15.8 15.9
2015 (4.1) (13.7) (20.0) 31.2 14.2 13.2 15.3 15.1 14.5
2016 3,085 (1,166) 190 982 3,090 (18) 965 947 (1,312) 0 (1,714) (960) (3,986) 51 (9,618) (0.90) 2016 (6.1) (15.4) (0.7) 30.2 12.7 11.8 16.1 16.1 21.9
2017E 4.8 12.5 10.7 30.5 13.7 12.7 17.0 17.0 22.0
2018E 6.9 1.5 0.8 30.7 13.0 12.1 16.1 16.1 22.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
Earnings Review
Close Bt2.46
Property Development August 9, 2017
Beat forecast/Below forecast/In line
2Q17 earnings declined 13.2% YoY but increased 18.9% QoQ Results date: August 8, 2017 Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.310
0.337
KT ZMICO vs. consensus Share data
3.2%
‐5.0%
Reuters / Bloomberg
QH.BK/QH TB
Paid‐up Shares (m)
10,714.38
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
26.00/793.00
Foreign limit / actual (%)
40.00/35.09
52 week High / Low (Bt)
2.86/2.24
Avg. daily T/O (shares 000)
28,431.00
NVDR (%)
4.74
Estimated free float (%)
63
Beta
1.01
URL
www.qh.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Maintain Buy with the TP of Bt2.90 We maintain QH’s rating as Buy with the 17E TP of Bt2.90. The catalysts that should support QH’s share price are as follows: i) the expectation of booking extra gain of Bt695mn, which is a non‐cash item, on shareholding dilution of LHBANK in 3Q17E; and ii) a 1H17 DPS of Bt0.07, implying a dividend yield of 2.8%. 2Q17 earnings declined 13.2% YoY but increased 18.9% QoQ QH reported 2Q17 net profit at Bt776mn (-13.2% YoY, +18.9% QoQ), 4% above our estimate, mainly due to higher‐than‐expected transfers. 2Q17 transfers were 11% above our forecast at Bt4.12bn (‐20.8% YoY, +31.5% QoQ). The average GPM was 27.5%, lower than our forecast at 29.4%, on a lower GPM for both low‐rise and condo projects to boost transfers. However, the SG&A expense‐to‐revenue ratio was only 16.5%, which was below our estimate at 18.0%, enabling the 2Q17 earnings to beat our estimate. Maintain 2017E forecast QH's 1H17 net profit was 42% of our full‐year estimate, which is maintained at Bt3.4bn (+10.7% YoY). We expect QH’s earnings to be better HoH in 2H17E as there are more new completed condos and low‐ rise projects to be realized in the period. Announced 1H17 DPS of Bt0.07, implying 2.8% yield QH announced an interim DPS of Bt0.07 for its 1H17 performance, implying a 2.8% yield. The stock will go XD on August 21 and the dividend will be paid on September 5, 2017. Financials and Valuation FY Ended 31 Dec Revenues (Btm) Net profit (Btm) EPS (Bt) EPS growth (%) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) Normalized PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 21,220 3,329 0.36 0.7 0.37 3.9 0.26 2.09 2014 6.8 6.7 13.9 1.2 10.6 17.4 123.9
2015 20,358 3,106 0.29 (20.0) 0.29 (21.3) 0.14 2.01 2015 8.5 8.5 17.5 1.2 5.7 14.4 111.2
2016 19,125 3,085 0.29 (0.7) 0.29 0.0 0.15 2.14 2016 8.5 8.5 20.1 1.1 6.1 13.4 98.5
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 20,042 3,416 0.32 10.7 0.32 10.7 0.16 2.31 2017E 7.7 7.7 17.9 1.1 6.5 13.8 91.4
2018E 21,422 3,443 0.32 0.8 0.32 0.8 0.16 2.47 2018E 7.7 7.7 17.3 1.0 6.5 13.0 82.0
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
2Q16
1Q17
2Q17
% YoY
% QoQ
1H17
% YoY
2017E
% YoY
Revenue from project sales Total revenue Gross profit
5,208 5,480 1,602
3,135 3,450 1,027
4,123 4,411 1,215
(20.8) (19.5) (24.1)
31.5 27.9 18.3
7,258 7,861 2,242
(28.2) (26.5) (30.1)
18,824 20,042 6,109
5.0 4.8 5.9
YTD (% 2017E) 38.6 39.2 36.7
EBITDA
642
369
498
(22.5)
34.8
867
(27.6)
2,742
12.5
31.6
Interest expense
(84)
(79)
(89)
6.0
13.3
168
(3.2)
(330)
(1.8)
50.9
Other income
34
49
63
85.7
30.1
112
50.2
130
(23.7)
86.0
Income tax
(138)
(75)
(103)
(25.4)
36.7
(178)
(28.8)
(493)
12.1
36.0
Gn (Ls) from affiliates
413
390
409
(1.0)
4.8
799
5.4
1,667
4.5
48.0
Net profit (loss)
895
653
776
(13.2)
18.9
1,429
(12.8)
3,416
10.7
41.8
Core net profit (loss)
895
653
776
(13.2)
18.9
1,429
(12.8)
3,416
10.7
41.8
Reported EPS (THB)
0.08
0.06
0.07
(13.2)
18.9
0.13
(12.8)
0.32
10.7
41.8
Core EPS (THB)
0.08
0.06
0.07
(13.2)
18.9
0.13
(12.8)
0.32
10.7
41.8
Gross margin – project sales (%)
28.9
29.0
26.9
27.8
30.1
Gross margin ‐ overall (%)
29.2
29.8
27.5
28.5
30.5
EBITDA margin (%)
11.7
10.7
11.3
11.0
13.7
Net margin (%)
16.3
18.9
17.6
18.2
17.0
Current ratio (x)
3.2
2.2
2.0
2.0
2.7
Interest coverage (x)
8.3
5.3
6.2
5.7
7.8
Debt / equity (x)
1.4
1.3
1.3
1.3
1.1
BVPS (Bt)
2.1
2.2
2.2
2.2
2.3
ROE (%)
15.7
12.9
12.2
13.8
12.2
Source: QH, KT ZMICO Research
Figure 2: Presales
Figure 3: Backlog at end 1Q17
Btmn 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 ‐
Low rise
Total Backlog Bt5,700mn
2017E 3,500
1H16 1H17
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 3Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
2018E 2,200
High rise
Source: QH, KT ZMICO Research
Source: QH, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2014 21,220 (14,313) 6,907 (3,881) 3,341 179 3,163 255 137 3,958 628 0 (31) 1,060 3,329 0.36 0.36 3,360 0.37 0.26
2015 20,358 (14,000) 6,358 (3,849) 2,882 191 2,691 329 183 3,632 525 0 22 1,233 3,106 0.29 0.29 3,084 0.29 0.14
2016 19,125 (13,356) 5,770 (3,691) 2,438 190 2,248 335 170 3,525 440 0 0 1,595 3,085 0.29 0.29 3,085 0.29 0.15
2017E 20,042 (13,933) 6,109 (3,684) 2,742 187 2,555 330 130 3,909 493 0 0 1,667 3,416 0.32 0.32 3,416 0.32 0.16
2018E 21,422 (14,840) 6,582 (4,120) 2,782 190 2,592 315 130 3,947 505 0 0 1,654 3,443 0.32 0.32 3,443 0.32 0.16
2014 1,458 74 24,949 10,569 1,227 48,634 6,592 18,600 29,485 9,184 19,149 48,634
2015 2,837 58 29,098 9,245 1,036 52,998 8,810 17,987 31,452 10,714 21,545 52,998
2016 2,888 50 28,835 9,823 576 53,014 7,498 17,989 30,075 10,714 22,940 53,014
2017E 350 61 28,472 10,612 601 52,448 7,274 15,700 27,700 10,714 24,748 52,448
2018E 350 62 27,221 11,306 643 53,511 8,979 13,100 27,028 10,714 26,483 53,511
2014 3,329 (1,982) 179 (4,997) (3,471) (493) 384 (109) 4,887 0 (1,469) (10) 3,407 (172) (2,845) (0.31)
2015 3,106 (958) 191 (1,397) 942 (74) 673 599 1,603 0 (706) (1,059) (162) 1,379 (12,572) (1.17)
2017E 3,416 (1,697) 187 (352) 1,554 (50) (91) (141) (2,510) 0 (1,607) 166 (3,951) (2,538) 1,504 0.14
2018E 3,443 (1,684) 190 713 2,662 (50) (3) (53) (887) 0 (1,708) (15) (2,609) 0 2,612 0.24
2014 7.7 0.9 0.7 32.5 15.7 14.9 15.7 15.8 15.9
2015 (4.1) (13.7) (20.0) 31.2 14.2 13.2 15.3 15.1 14.5
2016 3,085 (1,166) 190 982 3,090 (18) 965 947 (1,312) 0 (1,714) (960) (3,986) 51 (9,618) (0.90) 2016 (6.1) (15.4) (0.7) 30.2 12.7 11.8 16.1 16.1 21.9
2017E 4.8 12.5 10.7 30.5 13.7 12.7 17.0 17.0 22.0
2018E 6.9 1.5 0.8 30.7 13.0 12.1 16.1 16.1 22.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
