2015E presales & earnings forecasts lower than previous estimates
L.P.N. Development Outperform (16E TP Bt18.00)
Company Update
Close Bt16.00
Earnings upgrade / Earnings downgrade /Overview unchanged
Property Development January 11, 2016
2015E presales & earnings forecasts lower than previous estimates Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
1.785
1.970
KT ZMICO vs. consensus Share data
‐1.4%
‐3.6%
Reuters / Bloomberg
LPN.BK/ LPN TB
Paid‐up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
24.00/650.00
Foreign limit / actual (%)
39.00/25.47
52 week High / Low (Bt)
23.30/14.20
Avg. daily T/O (shares 000)
5,173.00
NVDR (%)
12.23
Estimated free float (%)
79.91
Beta
0.95
URL
www.lpn.co.th
CGR
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Level 3A (Established)
Downgrade to Outperform with new 16E TP of Bt18.00 (9.5x PER) We have lowered LPN’s 2016E target price to Bt18 from Bt20.50 and also reduced PER from 10x to 9.5x (‐0.25SD) after revising down our 2015‐16E net profit by 8.1‐7.4%, respectively, due to the transfer revenue estimates being lower than our previous forecasts. Hence, we downgrade LPN’s rating to Outperform from Buy as its upside is now below 15%. LPN has near‐term catalysts from an expected 2H15E dividend of Bt0.70, implying a yield of 4.4%, and improving earnings momentum in 1Q16E after completed condos amounting to Bt3.5bn begin transfers. 2015 presales decreased 14.9% YoY LPN generated 4Q15 presales of Bt2.65bn (‐34.5% YoY, ‐8.1% QoQ). The declining presales resulted from the following: i) LPN launched only one condo project, i.e., Lumpini Ville Sukhumvit 76‐Bearing Station (Bt1.1bn, 36% sold) while it delayed another two projects to 2016 and ii) presales from existing projects, especially provincial condos, did not improve much. 2015 presales were Bt14.5bn, decreasing 14.9% and 14.6% below its target of Bt17bn. However, LPN expects its 2016E presales target at Bt17bn, (+18% YoY). The growth of presales will mainly derive from 10 newly launched projects (Bangkok Metropolitan Region) in 2016 with a total value of Bt17bn. 4Q15E earnings expected to decline both YoY and QoQ We expect 4Q15E net profit at Bt476mn (‐36.0% YoY, ‐53.0% QoQ) on the back of Bt3.0bn in revenue (‐28.0% YoY, ‐48.7% QoQ). Transfers fell YoY and QoQ because LPN had only two major condos that generated a significant transfer rate in the quarter, i.e., Lumpini Township Rangsit‐ Klong 1‐Phase1 (Bt2.4bn, 70% sold, 39% transferred) and Lumpini Place Borommaratchachonnani (Bt1.66bn, 100% sold, 36% transferred). Revise down 2015‐16E net profit by 8.1%‐7.5%, respectively We revise down our 2015‐16E net profit by 8.1%‐7.5%, respectively. The downward revision was brought about by 2015‐16E transfer revenue decreases by 8.4% and 7.4% due to the trend of condo transfer rates being lower than our previous estimates, especially the transfer rates of provincial condo projects. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) 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 (%)
2013 14,347 2,329 1.58 4.5 1.58 6.2 0.84 6.52 2013 10.1 10.1 9.3 2.5 5.3 25.7 42.6
2014 12,867 2,021 1.37 (13.2) 1.37 (13.2) 0.80 7.05 2014 11.7 11.7 11.2 2.3 5.0 20.2 52.4
2015E 16,581 2,601 1.76 28.7 1.76 28.7 1.00 7.98 2015E 9.1 9.1 8.2 2.0 6.3 23.5 33.1
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2016E 16,782 2,801 1.90 7.7 1.90 7.7 1.00 8.87 2016E 8.4 8.4 8.0 1.8 6.3 22.5 38.5
2017E 18,132 2,860 1.94 2.1 1.94 2.1 1.00 9.81 2017E 8.3 8.3 7.8 1.6 6.3 20.7 35.6
Figure 1: Quarterly earnings preview Profit and Loss (Btmn)
FY Ended 31 Dec
4Q14
3Q15
4Q15E
% YoY
% QoQ
2014
2015E
% YoY
Revenue from project sales Total revenue Gross profit
4,182 4,323 1,425
5,877 6,041 1,849
3,013 3,177 979
(28.0) (26.5) (31.3)
(48.7) (47.4) (47.1)
12,321 12,867 4,163
15,952 16,581 5,109
29.5 28.9 22.7
EBITDA
958
1,286
581
(39.4)
(54.9)
2,600
3,338
28.4
Interest expense
(6)
(3)
(8)
31.1
158.7
(21)
(18)
(13.2)
Other income
48
4
16
(66.7)
272.3
78
41
(46.6)
(204)
(264)
(133)
(34.5)
(49.4)
(534)
(691)
29.5
Net profit (loss)
743
1,011
476
(36.0)
(53.0)
2,021
2,601
28.7
Core net profit (loss)
743
1,011
476
(36.0)
(53.0)
2,021
2,601
28.7
Reported EPS (THB)
0.50
0.69
0.32
(36.0)
(53.0)
1.37
1.76
28.7
Core EPS (THB)
0.50
0.69
0.32
(36.0)
(53.0)
1.37
1.76
28.7
Income tax
Gross margin – project sales (%)
33.3
30.9
30.9
32.5
31.0
Gross margin ‐ overall (%)
33.0
30.6
30.8
32.4
30.8
EBITDA margin (%)
22.2
21.3
18.3
20.2
20.1
Net margin (%)
17.2
16.7
15.0
15.7
15.7
Current ratio (x)
2.3
2.9
3.3
2.3
3.3
154.2
409.3
75.8
123.5
183.1
Debt / equity (x)
0.9
0.7
0.7
0.9
0.7
BVPS (Bt)
7.05
7.65
7.98
7.05
7.98
ROE (%)
19.1
22.6
26.1
20.2
23.5
Interest coverage (x)
Source: LPN, KT ZMICO Research Figure 2: Project launches in 2015
1 2 3 4 5
Value (Btmn)
Unit
Launch
Finish
Lumpini Park Beach Chaam
1,000
413
1Q15
2016
Lumpini Ville Nakorn in‐Riverview
2,000
1,544
2Q15
2016
Lumpini Mixx Theparak‐Srinakharin
1,600
1,900
2Q15
2016
Lumpini Sukhumvit 76‐Barring Station
1,100
895
4Q15
2017
Lumpini Township Rangsit Klong1 (ph 2)
2,600
3,674
4Q15
2016
Total
11,600
8,426
Source: LPN, KT ZMICO Research Figure 3: Quarterly presales
Figure 4: Condo completion schedule Btmn 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 ‐
Btmn
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 ‐ 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Source: LPN, KT ZMICO Research
2014 2015
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
3Q16
4Q16
Figure 5: Major forecast revisions Old Btmn Residential sales Transfer fee Special Business Tax
New
% Change
Remark
2015E 17,418
2016E 17,410
2015E 15,952
2016E 16,122
2015E (8.4)
2016E (7.4) Transfer rate decrease
138
70
127
63
(8.4)
(9.6)
Decrease along with transfers
575
575
526
532
(8.4)
(7.4)
Decrease along with transfers
Other SG&A
1,289
1,271
1,180
1,193
(8.4)
(6.1)
Decrease along with transfers
Net profit
2,829
3,027
2,601
2,801
(8.1)
(7.4)
Source: LPN, KT ZMICO Research Figure 6: Major assumptions Revenue (Btmn) Residential sales Rent Property management Total Growth YoY (%) Residential sales Rent Property management Total Gross margin (%) Residential sales Rent Property management Total NPM
2013 13,871 43 432 14,347 7.1 7.3 29.1 7.7
2014 12,321 51 495 12,867 (11.2) 18.9 14.4 (10.3)
2015E 15,952 55 574 16,581 29.5 7.4 16.0 28.9
2016E 16,122 57 603 16,782
2017E 17,439 60 633 18,132
1.1 3.6 5.0 1.2
8.2 5.3 5.0 8.0
32.9 49.2 25.6 32.7 16.2
32.5 50.1 26.6 32.4 15.7
31.0 48.0 24.0 30.8 15.7
32.0 48.0 24.0 31.8 16.7
31.0 48.0 24.0 30.8 15.8
Source: LPN, KT ZMICO Research Figure 7: Project update as of Sep 30, 2015
Source: LPN
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
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 (%)
2013 14,347 (9,657) 4,690 (1,779) 2,990 37 2,953 (12) 42 2,954 (625) 0 0 0 2,329 1.58 1.58 2,329 1.58 0.84
2014 12,867 (8,704) 4,163 (1,679) 2,600 39 2,561 (21) 78 2,555 (534) 0 0 0 2,021 1.37 1.37 2,021 1.37 0.80
2015E 16,581 (11,472) 5,109 (1,854) 3,338 41 3,296 (18) 41 3,292 (691) 0 0 0 2,601 1.76 1.76 2,601 1.76 1.00
2016E 16,782 (11,451) 5,331 (1,810) 3,599 43 3,556 (20) 35 3,546 (745) 0 0 0 2,801 1.90 1.90 2,801 1.90 1.00
2017E 18,132 (12,545) 5,587 (1,994) 3,676 45 3,631 (20) 38 3,621 (760) 0 0 0 2,860 1.94 1.94 2,860 1.94 1.00
2013 1,192 130 3,500 1,189 11,203 17,420 5,148 140 7,794 1,476 9,626 17,420
2014 1,113 232 4,957 1,702 11,522 19,784 4,986 1,583 9,375 1,476 10,408 19,784
2015E 1,000 232 4,086 1,697 12,429 19,716 2,540 2,351 7,946 1,476 11,770 19,716
2016E 1,000 235 3,765 1,742 15,202 22,210 3,962 2,083 9,114 1,476 13,096 22,210
2017E 1,000 254 4,124 1,785 16,544 23,984 3,906 2,243 9,504 1,476 14,480 23,984
2013 2,329 (392) 37 (3,212) (1,238) (12) 0 (12) 2,439 0 (1,165) 0 1,274 24 (904) (0.61)
2014 2,021 (279) 39 (1,847) (66) (52) (66) (118) 1,279 0 (1,239) 0 40 (144) 12 0.01
2015E 2,601 12 41 278 2,932 (99) 66 (33) (2,531) 0 (1,240) 824 (2,947) (47) 2,819 1.91
2016E 2,801 15 43 (2,472) 387 (49) 0 (49) 1,150 0 (1,476) (12) (338) 0 324 0.22
2017E 2,860 15 45 (1,476) 1,445 (49) 0 (49) 102 0 (1,476) (22) (1,396) 0 1,382 0.94
2013 7.7 5.4 4.5 32.7 20.8 20.6 16.2 16.2 21.2
2014 (10.3) (13.0) (13.2) 32.4 20.2 19.9 15.7 15.7 20.9
2015E 28.9 28.4 28.7 30.8 20.1 19.9 15.7 15.7 21.0
2016E 1.2 7.8 7.7 31.8 21.4 21.2 16.7 16.7 21.0
2017E 8.0 2.1 2.1 30.8 20.3 20.0 15.8 15.8 21.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
Note: KT ZMICO is a partnership between KTB and ZMICO. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO. 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, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, TFG. KT ZMICO is a co‐underwriter of SCI, SR, J, TKN.
Anti‐corruption Progress Indicator
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Company Update
Close Bt16.00
Earnings upgrade / Earnings downgrade /Overview unchanged
Property Development January 11, 2016
2015E presales & earnings forecasts lower than previous estimates Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
1.785
1.970
KT ZMICO vs. consensus Share data
‐1.4%
‐3.6%
Reuters / Bloomberg
LPN.BK/ LPN TB
Paid‐up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
24.00/650.00
Foreign limit / actual (%)
39.00/25.47
52 week High / Low (Bt)
23.30/14.20
Avg. daily T/O (shares 000)
5,173.00
NVDR (%)
12.23
Estimated free float (%)
79.91
Beta
0.95
URL
www.lpn.co.th
CGR
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Level 3A (Established)
Downgrade to Outperform with new 16E TP of Bt18.00 (9.5x PER) We have lowered LPN’s 2016E target price to Bt18 from Bt20.50 and also reduced PER from 10x to 9.5x (‐0.25SD) after revising down our 2015‐16E net profit by 8.1‐7.4%, respectively, due to the transfer revenue estimates being lower than our previous forecasts. Hence, we downgrade LPN’s rating to Outperform from Buy as its upside is now below 15%. LPN has near‐term catalysts from an expected 2H15E dividend of Bt0.70, implying a yield of 4.4%, and improving earnings momentum in 1Q16E after completed condos amounting to Bt3.5bn begin transfers. 2015 presales decreased 14.9% YoY LPN generated 4Q15 presales of Bt2.65bn (‐34.5% YoY, ‐8.1% QoQ). The declining presales resulted from the following: i) LPN launched only one condo project, i.e., Lumpini Ville Sukhumvit 76‐Bearing Station (Bt1.1bn, 36% sold) while it delayed another two projects to 2016 and ii) presales from existing projects, especially provincial condos, did not improve much. 2015 presales were Bt14.5bn, decreasing 14.9% and 14.6% below its target of Bt17bn. However, LPN expects its 2016E presales target at Bt17bn, (+18% YoY). The growth of presales will mainly derive from 10 newly launched projects (Bangkok Metropolitan Region) in 2016 with a total value of Bt17bn. 4Q15E earnings expected to decline both YoY and QoQ We expect 4Q15E net profit at Bt476mn (‐36.0% YoY, ‐53.0% QoQ) on the back of Bt3.0bn in revenue (‐28.0% YoY, ‐48.7% QoQ). Transfers fell YoY and QoQ because LPN had only two major condos that generated a significant transfer rate in the quarter, i.e., Lumpini Township Rangsit‐ Klong 1‐Phase1 (Bt2.4bn, 70% sold, 39% transferred) and Lumpini Place Borommaratchachonnani (Bt1.66bn, 100% sold, 36% transferred). Revise down 2015‐16E net profit by 8.1%‐7.5%, respectively We revise down our 2015‐16E net profit by 8.1%‐7.5%, respectively. The downward revision was brought about by 2015‐16E transfer revenue decreases by 8.4% and 7.4% due to the trend of condo transfer rates being lower than our previous estimates, especially the transfer rates of provincial condo projects. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) 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 (%)
2013 14,347 2,329 1.58 4.5 1.58 6.2 0.84 6.52 2013 10.1 10.1 9.3 2.5 5.3 25.7 42.6
2014 12,867 2,021 1.37 (13.2) 1.37 (13.2) 0.80 7.05 2014 11.7 11.7 11.2 2.3 5.0 20.2 52.4
2015E 16,581 2,601 1.76 28.7 1.76 28.7 1.00 7.98 2015E 9.1 9.1 8.2 2.0 6.3 23.5 33.1
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2016E 16,782 2,801 1.90 7.7 1.90 7.7 1.00 8.87 2016E 8.4 8.4 8.0 1.8 6.3 22.5 38.5
2017E 18,132 2,860 1.94 2.1 1.94 2.1 1.00 9.81 2017E 8.3 8.3 7.8 1.6 6.3 20.7 35.6
Figure 1: Quarterly earnings preview Profit and Loss (Btmn)
FY Ended 31 Dec
4Q14
3Q15
4Q15E
% YoY
% QoQ
2014
2015E
% YoY
Revenue from project sales Total revenue Gross profit
4,182 4,323 1,425
5,877 6,041 1,849
3,013 3,177 979
(28.0) (26.5) (31.3)
(48.7) (47.4) (47.1)
12,321 12,867 4,163
15,952 16,581 5,109
29.5 28.9 22.7
EBITDA
958
1,286
581
(39.4)
(54.9)
2,600
3,338
28.4
Interest expense
(6)
(3)
(8)
31.1
158.7
(21)
(18)
(13.2)
Other income
48
4
16
(66.7)
272.3
78
41
(46.6)
(204)
(264)
(133)
(34.5)
(49.4)
(534)
(691)
29.5
Net profit (loss)
743
1,011
476
(36.0)
(53.0)
2,021
2,601
28.7
Core net profit (loss)
743
1,011
476
(36.0)
(53.0)
2,021
2,601
28.7
Reported EPS (THB)
0.50
0.69
0.32
(36.0)
(53.0)
1.37
1.76
28.7
Core EPS (THB)
0.50
0.69
0.32
(36.0)
(53.0)
1.37
1.76
28.7
Income tax
Gross margin – project sales (%)
33.3
30.9
30.9
32.5
31.0
Gross margin ‐ overall (%)
33.0
30.6
30.8
32.4
30.8
EBITDA margin (%)
22.2
21.3
18.3
20.2
20.1
Net margin (%)
17.2
16.7
15.0
15.7
15.7
Current ratio (x)
2.3
2.9
3.3
2.3
3.3
154.2
409.3
75.8
123.5
183.1
Debt / equity (x)
0.9
0.7
0.7
0.9
0.7
BVPS (Bt)
7.05
7.65
7.98
7.05
7.98
ROE (%)
19.1
22.6
26.1
20.2
23.5
Interest coverage (x)
Source: LPN, KT ZMICO Research Figure 2: Project launches in 2015
1 2 3 4 5
Value (Btmn)
Unit
Launch
Finish
Lumpini Park Beach Chaam
1,000
413
1Q15
2016
Lumpini Ville Nakorn in‐Riverview
2,000
1,544
2Q15
2016
Lumpini Mixx Theparak‐Srinakharin
1,600
1,900
2Q15
2016
Lumpini Sukhumvit 76‐Barring Station
1,100
895
4Q15
2017
Lumpini Township Rangsit Klong1 (ph 2)
2,600
3,674
4Q15
2016
Total
11,600
8,426
Source: LPN, KT ZMICO Research Figure 3: Quarterly presales
Figure 4: Condo completion schedule Btmn 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 ‐
Btmn
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 ‐ 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Source: LPN, KT ZMICO Research
2014 2015
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
3Q16
4Q16
Figure 5: Major forecast revisions Old Btmn Residential sales Transfer fee Special Business Tax
New
% Change
Remark
2015E 17,418
2016E 17,410
2015E 15,952
2016E 16,122
2015E (8.4)
2016E (7.4) Transfer rate decrease
138
70
127
63
(8.4)
(9.6)
Decrease along with transfers
575
575
526
532
(8.4)
(7.4)
Decrease along with transfers
Other SG&A
1,289
1,271
1,180
1,193
(8.4)
(6.1)
Decrease along with transfers
Net profit
2,829
3,027
2,601
2,801
(8.1)
(7.4)
Source: LPN, KT ZMICO Research Figure 6: Major assumptions Revenue (Btmn) Residential sales Rent Property management Total Growth YoY (%) Residential sales Rent Property management Total Gross margin (%) Residential sales Rent Property management Total NPM
2013 13,871 43 432 14,347 7.1 7.3 29.1 7.7
2014 12,321 51 495 12,867 (11.2) 18.9 14.4 (10.3)
2015E 15,952 55 574 16,581 29.5 7.4 16.0 28.9
2016E 16,122 57 603 16,782
2017E 17,439 60 633 18,132
1.1 3.6 5.0 1.2
8.2 5.3 5.0 8.0
32.9 49.2 25.6 32.7 16.2
32.5 50.1 26.6 32.4 15.7
31.0 48.0 24.0 30.8 15.7
32.0 48.0 24.0 31.8 16.7
31.0 48.0 24.0 30.8 15.8
Source: LPN, KT ZMICO Research Figure 7: Project update as of Sep 30, 2015
Source: LPN
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
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 (%)
2013 14,347 (9,657) 4,690 (1,779) 2,990 37 2,953 (12) 42 2,954 (625) 0 0 0 2,329 1.58 1.58 2,329 1.58 0.84
2014 12,867 (8,704) 4,163 (1,679) 2,600 39 2,561 (21) 78 2,555 (534) 0 0 0 2,021 1.37 1.37 2,021 1.37 0.80
2015E 16,581 (11,472) 5,109 (1,854) 3,338 41 3,296 (18) 41 3,292 (691) 0 0 0 2,601 1.76 1.76 2,601 1.76 1.00
2016E 16,782 (11,451) 5,331 (1,810) 3,599 43 3,556 (20) 35 3,546 (745) 0 0 0 2,801 1.90 1.90 2,801 1.90 1.00
2017E 18,132 (12,545) 5,587 (1,994) 3,676 45 3,631 (20) 38 3,621 (760) 0 0 0 2,860 1.94 1.94 2,860 1.94 1.00
2013 1,192 130 3,500 1,189 11,203 17,420 5,148 140 7,794 1,476 9,626 17,420
2014 1,113 232 4,957 1,702 11,522 19,784 4,986 1,583 9,375 1,476 10,408 19,784
2015E 1,000 232 4,086 1,697 12,429 19,716 2,540 2,351 7,946 1,476 11,770 19,716
2016E 1,000 235 3,765 1,742 15,202 22,210 3,962 2,083 9,114 1,476 13,096 22,210
2017E 1,000 254 4,124 1,785 16,544 23,984 3,906 2,243 9,504 1,476 14,480 23,984
2013 2,329 (392) 37 (3,212) (1,238) (12) 0 (12) 2,439 0 (1,165) 0 1,274 24 (904) (0.61)
2014 2,021 (279) 39 (1,847) (66) (52) (66) (118) 1,279 0 (1,239) 0 40 (144) 12 0.01
2015E 2,601 12 41 278 2,932 (99) 66 (33) (2,531) 0 (1,240) 824 (2,947) (47) 2,819 1.91
2016E 2,801 15 43 (2,472) 387 (49) 0 (49) 1,150 0 (1,476) (12) (338) 0 324 0.22
2017E 2,860 15 45 (1,476) 1,445 (49) 0 (49) 102 0 (1,476) (22) (1,396) 0 1,382 0.94
2013 7.7 5.4 4.5 32.7 20.8 20.6 16.2 16.2 21.2
2014 (10.3) (13.0) (13.2) 32.4 20.2 19.9 15.7 15.7 20.9
2015E 28.9 28.4 28.7 30.8 20.1 19.9 15.7 15.7 21.0
2016E 1.2 7.8 7.7 31.8 21.4 21.2 16.7 16.7 21.0
2017E 8.0 2.1 2.1 30.8 20.3 20.0 15.8 15.8 21.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
Note: KT ZMICO is a partnership between KTB and ZMICO. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO. 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, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, TFG. KT ZMICO is a co‐underwriter of SCI, SR, J, TKN.
Anti‐corruption Progress Indicator
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
