2Q16E net profit to rise YoY but be flat QoQ - Ananda
Ananda Development Outperform (16E TP Bt4.10)
Company Update
Close Bt4.56
Earnings upgrade/Earnings downgrade/ Overview unchanged
Property Development July 22, 2016
2Q16E net profit to rise YoY but be flat QoQ Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.426
0.526
KT ZMICO vs. consensus Share data
‐3.8%
4.6%
Reuters / Bloomberg
ANAN.BK/ANAN TB
Paid‐up Shares (m)
3,333.00
Par (Bt)
0.10
Market cap (Bt bn / US$ m) Foreign limit / actual (%)
15.00/434.00 49.00/7.33
52 week High / Low (Bt)
4.90/2.94
Avg. daily T/O (shares 000)
11,272.00
NVDR (%) Estimated free float (%)
2.51 44.52
Beta
0.98
URL
www.ananda.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Maintain Outperform We maintain ANAN’s 2016E TP at Bt4.1 and the 17E TP will be Bt5.5 after revising up the 2017E net profit by 9.4%. We maintain an Outperform rating and we still like ANAN as our top pick on projected earnings growth of 13.3% in 2016E and 33.4% in 2017E, driven by potential realization of significant contributions from its condos and joint venture condos. 6M16 presales secured 39.6% of the full‐year target ANAN's 6M16 presales were Bt8.23bn (‐34.0% YoY) and secured 39.6% of the company's full‐year target of Bt20.8bn (‐20.7% YoY). The 6M16 low‐rise presales were Bt1.5bn (‐14.3% YoY) and condo presales were Bt6.69bn (‐37.3% YoY). Presales declined 34.1% YoY, mainly due to the fact that ANAN launched only two condos in 1H16E, i.e., Ashton Silom (Bt6bn, 66.4% sold) and Ideo Tha Phra Interchange (Bt2.98bn, 14.3% sold), lower than last year both in project number and value. ANAN has just announced that it will enter into three JV condos with a total value of Bt14bn, which are planned for launch in late 3Q16E or 4Q16E; this will help drive its presales in 2H16E. 2Q16 presales rose 10.9% YoY but declined 27.7% QoQ ANAN reported 2Q16 presales at Bt3.4bn, increasing 10.9% YoY but decreasing 27.7% QoQ. This is because ANAN did not launch any new condos in the quarter. 2Q16E net profit to rise YoY but be flat QoQ We expect ANAN’s 2Q16E net profit at Bt152mn, increasing 111.9% YoY and 2.6% QoQ. We estimate 2Q16E transfers of around Bt2.2bn, rising 83.8% YoY, as ANAN had a higher condo backlog to transfer than in 2Q15; meanwhile, the 1.1% rise QoQ was quite flat because the company only continued to transfer from the backlog in 1Q16 and there were no new condos ready to transfer in 2Q16E. We expect ANAN’s quarterly net profit to gradually increase QoQ in 3Q16E as two new completed condos (Bt4.7bn, 58% sold) will start transferring and the peak will be in 4Q16E after one completed condo (Bt1.8bn, 62.7% sold) and one JV condo (Ideo Q Chula‐Samyan, Bt6.77bn, 96.8% sold) begin transferring in the period. Maintain 2016E but revise up 2017E net profit We maintain the 2016E net profit at Bt1.37bn (+13.2% YoY) but revise up 2017E net profit by 9.4% to Bt1.8bn (+33.4% YoY). This is due to the fact that we add more condo transfers from Ideo Tha Phra Interchange (Bt2.98bn, 14.3% sold) and two new projects, namely, UNiO Sukhumvit 72 (Bt1.43bn) and UNiO Rama 2‐Thakham (Bt961mn), that plan to launch in 3Q16 and will be ready to transfer in late 2017E to our 2017E transfer forecast. 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 9,173 812 0.24 N.M. 0.24 N.M. 0.05 1.76 2013 18.7 18.7 12.5 2.6 1.1 14.8 36.5
2014 10,328 1,301 0.39 60.3 0.36 46.8 0.10 2.07 2014 11.7 12.8 10.0 2.2 2.1 20.3 74.8
2015 10,740 1,207 0.36 (7.3) 0.36 1.3 0.10 2.62 2015 12.6 12.6 9.4 1.7 2.2 15.4 70.6
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2016E 11,573 1,367 0.41 13.3 0.41 13.3 0.11 3.19 2016E 11.1 11.1 9.9 1.4 2.4 14.1 55.2
2017E 11,747 1,824 0.55 33.4 0.55 33.4 0.14 3.56 2017E 8.3 8.3 9.9 1.3 3.0 16.2 44.4
Figure 1: Quarterly earnings preview
FY Ended 31 Dec
2Q15
1Q16
2Q16E
% YoY
% QoQ
1H16E
% YoY
2016E
% YoY
Revenue from Project sales Total revenue Gross profit
1,198 1,463 621
2,179 2,529 933
2,203 2,560 924
83.8 74.9 48.8
1.1 1.2 (0.9)
4,382 5,089 1,857
82.6 82.1 59.1
10,418 11,573 4,054
8.5 7.8 (2.5)
YTD (% 2016E) 42.1 44.0 45.8
EBITDA
254
365
377
48.4
3.4
742
57.2
2,138
(5.9)
34.7
Interest expense
(70)
(69)
(70)
(0.3)
2.0
(139)
5.3
(243)
(4.1)
57.0
Profit and Loss (Btmn)
Other income
57
38
40
(30.4)
5.2
78
(25.5)
208
(1.1)
37.4
Income tax
8
(48)
(46)
(648.7)
(4.1)
93
440.4
(374)
9.9
‐24.9
(124)
(108)
(110)
(11.5)
1.5
(218)
20.5
(130)
‐72.7
167.6
72
149
152
111.9
2.6
301
107.0
1,367
13.3
22.0
Gn (Ls) from affiliates Net profit (loss) Core net profit (loss)
72
149
152
111.9
2.6
301
107.0
1,367
13.3
22.0
Reported EPS (THB)
0.02
0.04
0.05
111.9
2.6
0.09
107.0
0.41
13.3
22.0
Core EPS (THB)
0.02
0.04
0.05
111.9
2.6
0.09
107.0
0.41
13.3
22.0
Gross margin‐ Project sales (%)
37.5
36.6
36.0
37.6
33.9
Gross margin ‐ overall (%)
42.4
36.9
36.1
36.5
35.0
EBITDA margin (%)
17.4
14.4
14.7
14.6
18.5
Net margin (%)
4.9
5.9
6.0
5.9
11.8
Current ratio (x)
3.6
2.5
0.0
0.0
2.9
Interest coverage (x)
3.4
5.0
5.1
5.1
8.5
Debt / equity (x)
1.9
1.1
‐
‐
1.2
BVPS (Bt)
2.05
2.66
‐
‐
3.19
ROE (%)
14.7
10.5
‐
‐
14.1
Source: ANAN, KT ZMICO Research
Figure 2: Major forecast revisions Old 2016E 10,413
New 2016E 10,418
% Change 2016E 0.0
Old 2017E 9,992
New 2017E 10,570
% Change 2017E 5.8
High rise
8,190
8,195
0.1
7,549
8,126
7.7
More condos to be transferred in 2017E
Low rise
2,223
2,223
0.0
2,443
2,443
0.0
Maintain
Transfer fee
70
70
0.0
100
106
5.8
Increases along with transfers
Special Business Tax
344
344
0.0
330
349
5.8
Increases along with transfers
Selling expenses
1,131
1,131
0.0
1,183
1,208
2.1
Increases along with transfers
Administration
1,066
1,066
0.0
1,119
1,119
0.0
Maintain
Btmn Residential sales
Remarks
Shared gain (loss) from JVs
(130)
(130)
0.0
373
373
0.0
Maintain
Core profit Net profit
1,366 1,366
1,367 1,367
0.1 0.1
1,667 1,667
1,824 1,824
9.4 9.4
Source: ANAN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 3: Presales
Figure 4: Distribution of backlog as of (31 Mar 16)
Btmn
Btmn
14,000
12,000
12,000 10,000
10,000
8,000
8,000
6,000
6,000
4,000
4,000
2,000 2,000
‐
0
Low rise
2016
Condo
2017
Housing‐Anan
Source: ANAN, KT ZMICO Research
2018
CD Anan's Backlog in JV
CD‐Anan
Source: ANAN, KT ZMICO Research
Figure 5: Value of completed condos by quarter
Figure 6: JV project launches and shared gain (Loss) from JVs
Btmn
Btmn 25,000
4,500 4,000 3,500
Btmn 500 400 300 200 100 0 (100) (200) (300) (400) (500) (600)
20,000
3,000
15,000
2,500 2,000
10,000
1,500 1,000
5,000
500 0
0 1Q15
2Q15
3Q15
4Q15
Completion of CD
1Q16
2Q16
3Q16
4Q16
2013
Completion of CD‐JV
2014
2015
Launch
Source: ANAN, KT ZMICO Research
2016E
ANAN's share of gain (loss) from JV (RHS)
Source: ANAN, KT ZMICO Research
Figure 7: Major assumptions
2013
Revenue
2014
2015
2016E
2017E
Project sales
8,808
9,678
9,598
10,418
10,570
High‐rise
8,279
7,383
7,494
8,195
8,126
Low‐rise
529
2,295
2,104
2,223
2,443
365
650
1,142
1,155
1,177
17,981
20,006
20,338
21,991
22,316
(94)
(293)
(477)
(130)
373
Project management and services Total Share of loss from investment in JVS Revenue growth YoY
77.6%
9.9%
‐0.8%
8.5%
1.5%
High‐rise
n.a.
‐10.8%
1.5%
9.4%
‐0.8%
Low‐rise
n.a.
333.8%
‐8.3%
5.6%
9.9%
Project sales
Project management and services
156.2%
78.0%
75.7%
1.1%
1.9%
Total
252.4%
11.3%
1.7%
8.1%
1.5%
n.a.
n.a.
n.a.
n.a.
n.a.
Gross margin
Project sales
37.5%
36.9%
37.5%
33.9%
33.8%
Project management and services
42.1%
56.4%
49.3%
44.9%
44.7%
Overall GPM
37.4%
38.0%
38.7%
35.0%
34.9%
NPM
8.8%
12.6%
11.2%
11.8%
15.5%
Share of loss from investment in JVs
2017E
Source: ANAN, KT ZMICO Research 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 9,173 (5,741) 3,432 (2,136) 1,391 186 1,205 (112) 149 1,024 (213) 0 0 (94) 812 0.24 0.24 812 0.24 0.05
2014 10,328 (6,402) 3,927 (2,059) 2,037 62 1,974 (227) 114 1,596 (294) 0 110 (293) 1,301 0.39 0.39 1,192 0.36 0.10
2015 10,740 (6,582) 4,159 (2,166) 2,273 70 2,203 (254) 211 1,547 (341) 0 0 (477) 1,207 0.36 0.36 1,207 0.36 0.10
2016E 11,573 (7,519) 4,054 (2,197) 2,138 73 2,065 (243) 208 1,742 (374) 0 0 (130) 1,367 0.41 0.41 1,367 0.41 0.11
2017E 11,747 (7,644) 4,103 (2,327) 2,064 76 1,988 (225) 211 2,187 (363) 0 0 373 1,824 0.55 0.55 1,824 0.55 0.14
2013 2,309 351 1 660 8,541 12,482 2,904 1,552 6,603 333 5,879 12,482
2014 2,477 28 10 664 11,730 17,088 1,012 6,636 10,175 333 6,913 17,088
2015 2,573 142 7 778 13,420 20,471 2,712 6,023 11,743 333 8,727 20,471
2016E 3,762 116 8 772 14,229 23,413 3,129 6,504 12,780 333 10,633 23,413
2017E 2,036 117 8 763 14,817 22,452 4,780 2,534 10,570 333 11,882 22,452
2013 812 5,856 186 (7,392) (538) (1,070) 121 (949) 1,960 0 0 (223) 1,737 250 (1,627) (0.49)
2014 1,301 6,889 62 (9,691) (1,439) (1,080) (573) (1,652) 3,880 0 (267) (354) 3,260 168 (2,968) (0.89)
2015 1,207 7,317 70 (7,452) 1,142 (1,837) (360) (2,197) 1,993 0 (351) (490) 1,152 96 (1,343) (0.40)
2016E 1,367 7,716 73 239 9,395 (855) (256) (1,112) (2,865) 0 (356) (3,874) (7,095) 1,189 8,164 2.45
2017E 1,824 7,797 76 (607) 9,090 (60) (150) (211) (4,441) 0 (400) (5,764) (10,605) (1,726) 8,691 2.61
2013 79.8 186.2 n.m. 37.4 15.2 13.1 8.8 8.8 20.8
2014 12.6 46.4 60.3 38.0 19.7 19.1 12.6 11.5 18.5
2015 4.0 11.6 (7.3) 38.7 21.2 20.5 11.2 11.2 22.0
2016E 7.8 (5.9) 13.3 35.0 18.5 17.8 11.8 11.8 20.0
2017E 1.5 (3.5) 33.4 34.9 17.6 16.9 15.5 15.5 20.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
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, PACE, PLE, TPOLY, M‐CHAI. KT ZMICO is a co‐underwriter of ALT, EKH.
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 UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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th
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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 Bt4.56
Earnings upgrade/Earnings downgrade/ Overview unchanged
Property Development July 22, 2016
2Q16E net profit to rise YoY but be flat QoQ Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.426
0.526
KT ZMICO vs. consensus Share data
‐3.8%
4.6%
Reuters / Bloomberg
ANAN.BK/ANAN TB
Paid‐up Shares (m)
3,333.00
Par (Bt)
0.10
Market cap (Bt bn / US$ m) Foreign limit / actual (%)
15.00/434.00 49.00/7.33
52 week High / Low (Bt)
4.90/2.94
Avg. daily T/O (shares 000)
11,272.00
NVDR (%) Estimated free float (%)
2.51 44.52
Beta
0.98
URL
www.ananda.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Maintain Outperform We maintain ANAN’s 2016E TP at Bt4.1 and the 17E TP will be Bt5.5 after revising up the 2017E net profit by 9.4%. We maintain an Outperform rating and we still like ANAN as our top pick on projected earnings growth of 13.3% in 2016E and 33.4% in 2017E, driven by potential realization of significant contributions from its condos and joint venture condos. 6M16 presales secured 39.6% of the full‐year target ANAN's 6M16 presales were Bt8.23bn (‐34.0% YoY) and secured 39.6% of the company's full‐year target of Bt20.8bn (‐20.7% YoY). The 6M16 low‐rise presales were Bt1.5bn (‐14.3% YoY) and condo presales were Bt6.69bn (‐37.3% YoY). Presales declined 34.1% YoY, mainly due to the fact that ANAN launched only two condos in 1H16E, i.e., Ashton Silom (Bt6bn, 66.4% sold) and Ideo Tha Phra Interchange (Bt2.98bn, 14.3% sold), lower than last year both in project number and value. ANAN has just announced that it will enter into three JV condos with a total value of Bt14bn, which are planned for launch in late 3Q16E or 4Q16E; this will help drive its presales in 2H16E. 2Q16 presales rose 10.9% YoY but declined 27.7% QoQ ANAN reported 2Q16 presales at Bt3.4bn, increasing 10.9% YoY but decreasing 27.7% QoQ. This is because ANAN did not launch any new condos in the quarter. 2Q16E net profit to rise YoY but be flat QoQ We expect ANAN’s 2Q16E net profit at Bt152mn, increasing 111.9% YoY and 2.6% QoQ. We estimate 2Q16E transfers of around Bt2.2bn, rising 83.8% YoY, as ANAN had a higher condo backlog to transfer than in 2Q15; meanwhile, the 1.1% rise QoQ was quite flat because the company only continued to transfer from the backlog in 1Q16 and there were no new condos ready to transfer in 2Q16E. We expect ANAN’s quarterly net profit to gradually increase QoQ in 3Q16E as two new completed condos (Bt4.7bn, 58% sold) will start transferring and the peak will be in 4Q16E after one completed condo (Bt1.8bn, 62.7% sold) and one JV condo (Ideo Q Chula‐Samyan, Bt6.77bn, 96.8% sold) begin transferring in the period. Maintain 2016E but revise up 2017E net profit We maintain the 2016E net profit at Bt1.37bn (+13.2% YoY) but revise up 2017E net profit by 9.4% to Bt1.8bn (+33.4% YoY). This is due to the fact that we add more condo transfers from Ideo Tha Phra Interchange (Bt2.98bn, 14.3% sold) and two new projects, namely, UNiO Sukhumvit 72 (Bt1.43bn) and UNiO Rama 2‐Thakham (Bt961mn), that plan to launch in 3Q16 and will be ready to transfer in late 2017E to our 2017E transfer forecast. 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 9,173 812 0.24 N.M. 0.24 N.M. 0.05 1.76 2013 18.7 18.7 12.5 2.6 1.1 14.8 36.5
2014 10,328 1,301 0.39 60.3 0.36 46.8 0.10 2.07 2014 11.7 12.8 10.0 2.2 2.1 20.3 74.8
2015 10,740 1,207 0.36 (7.3) 0.36 1.3 0.10 2.62 2015 12.6 12.6 9.4 1.7 2.2 15.4 70.6
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2016E 11,573 1,367 0.41 13.3 0.41 13.3 0.11 3.19 2016E 11.1 11.1 9.9 1.4 2.4 14.1 55.2
2017E 11,747 1,824 0.55 33.4 0.55 33.4 0.14 3.56 2017E 8.3 8.3 9.9 1.3 3.0 16.2 44.4
Figure 1: Quarterly earnings preview
FY Ended 31 Dec
2Q15
1Q16
2Q16E
% YoY
% QoQ
1H16E
% YoY
2016E
% YoY
Revenue from Project sales Total revenue Gross profit
1,198 1,463 621
2,179 2,529 933
2,203 2,560 924
83.8 74.9 48.8
1.1 1.2 (0.9)
4,382 5,089 1,857
82.6 82.1 59.1
10,418 11,573 4,054
8.5 7.8 (2.5)
YTD (% 2016E) 42.1 44.0 45.8
EBITDA
254
365
377
48.4
3.4
742
57.2
2,138
(5.9)
34.7
Interest expense
(70)
(69)
(70)
(0.3)
2.0
(139)
5.3
(243)
(4.1)
57.0
Profit and Loss (Btmn)
Other income
57
38
40
(30.4)
5.2
78
(25.5)
208
(1.1)
37.4
Income tax
8
(48)
(46)
(648.7)
(4.1)
93
440.4
(374)
9.9
‐24.9
(124)
(108)
(110)
(11.5)
1.5
(218)
20.5
(130)
‐72.7
167.6
72
149
152
111.9
2.6
301
107.0
1,367
13.3
22.0
Gn (Ls) from affiliates Net profit (loss) Core net profit (loss)
72
149
152
111.9
2.6
301
107.0
1,367
13.3
22.0
Reported EPS (THB)
0.02
0.04
0.05
111.9
2.6
0.09
107.0
0.41
13.3
22.0
Core EPS (THB)
0.02
0.04
0.05
111.9
2.6
0.09
107.0
0.41
13.3
22.0
Gross margin‐ Project sales (%)
37.5
36.6
36.0
37.6
33.9
Gross margin ‐ overall (%)
42.4
36.9
36.1
36.5
35.0
EBITDA margin (%)
17.4
14.4
14.7
14.6
18.5
Net margin (%)
4.9
5.9
6.0
5.9
11.8
Current ratio (x)
3.6
2.5
0.0
0.0
2.9
Interest coverage (x)
3.4
5.0
5.1
5.1
8.5
Debt / equity (x)
1.9
1.1
‐
‐
1.2
BVPS (Bt)
2.05
2.66
‐
‐
3.19
ROE (%)
14.7
10.5
‐
‐
14.1
Source: ANAN, KT ZMICO Research
Figure 2: Major forecast revisions Old 2016E 10,413
New 2016E 10,418
% Change 2016E 0.0
Old 2017E 9,992
New 2017E 10,570
% Change 2017E 5.8
High rise
8,190
8,195
0.1
7,549
8,126
7.7
More condos to be transferred in 2017E
Low rise
2,223
2,223
0.0
2,443
2,443
0.0
Maintain
Transfer fee
70
70
0.0
100
106
5.8
Increases along with transfers
Special Business Tax
344
344
0.0
330
349
5.8
Increases along with transfers
Selling expenses
1,131
1,131
0.0
1,183
1,208
2.1
Increases along with transfers
Administration
1,066
1,066
0.0
1,119
1,119
0.0
Maintain
Btmn Residential sales
Remarks
Shared gain (loss) from JVs
(130)
(130)
0.0
373
373
0.0
Maintain
Core profit Net profit
1,366 1,366
1,367 1,367
0.1 0.1
1,667 1,667
1,824 1,824
9.4 9.4
Source: ANAN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 3: Presales
Figure 4: Distribution of backlog as of (31 Mar 16)
Btmn
Btmn
14,000
12,000
12,000 10,000
10,000
8,000
8,000
6,000
6,000
4,000
4,000
2,000 2,000
‐
0
Low rise
2016
Condo
2017
Housing‐Anan
Source: ANAN, KT ZMICO Research
2018
CD Anan's Backlog in JV
CD‐Anan
Source: ANAN, KT ZMICO Research
Figure 5: Value of completed condos by quarter
Figure 6: JV project launches and shared gain (Loss) from JVs
Btmn
Btmn 25,000
4,500 4,000 3,500
Btmn 500 400 300 200 100 0 (100) (200) (300) (400) (500) (600)
20,000
3,000
15,000
2,500 2,000
10,000
1,500 1,000
5,000
500 0
0 1Q15
2Q15
3Q15
4Q15
Completion of CD
1Q16
2Q16
3Q16
4Q16
2013
Completion of CD‐JV
2014
2015
Launch
Source: ANAN, KT ZMICO Research
2016E
ANAN's share of gain (loss) from JV (RHS)
Source: ANAN, KT ZMICO Research
Figure 7: Major assumptions
2013
Revenue
2014
2015
2016E
2017E
Project sales
8,808
9,678
9,598
10,418
10,570
High‐rise
8,279
7,383
7,494
8,195
8,126
Low‐rise
529
2,295
2,104
2,223
2,443
365
650
1,142
1,155
1,177
17,981
20,006
20,338
21,991
22,316
(94)
(293)
(477)
(130)
373
Project management and services Total Share of loss from investment in JVS Revenue growth YoY
77.6%
9.9%
‐0.8%
8.5%
1.5%
High‐rise
n.a.
‐10.8%
1.5%
9.4%
‐0.8%
Low‐rise
n.a.
333.8%
‐8.3%
5.6%
9.9%
Project sales
Project management and services
156.2%
78.0%
75.7%
1.1%
1.9%
Total
252.4%
11.3%
1.7%
8.1%
1.5%
n.a.
n.a.
n.a.
n.a.
n.a.
Gross margin
Project sales
37.5%
36.9%
37.5%
33.9%
33.8%
Project management and services
42.1%
56.4%
49.3%
44.9%
44.7%
Overall GPM
37.4%
38.0%
38.7%
35.0%
34.9%
NPM
8.8%
12.6%
11.2%
11.8%
15.5%
Share of loss from investment in JVs
2017E
Source: ANAN, KT ZMICO Research 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 9,173 (5,741) 3,432 (2,136) 1,391 186 1,205 (112) 149 1,024 (213) 0 0 (94) 812 0.24 0.24 812 0.24 0.05
2014 10,328 (6,402) 3,927 (2,059) 2,037 62 1,974 (227) 114 1,596 (294) 0 110 (293) 1,301 0.39 0.39 1,192 0.36 0.10
2015 10,740 (6,582) 4,159 (2,166) 2,273 70 2,203 (254) 211 1,547 (341) 0 0 (477) 1,207 0.36 0.36 1,207 0.36 0.10
2016E 11,573 (7,519) 4,054 (2,197) 2,138 73 2,065 (243) 208 1,742 (374) 0 0 (130) 1,367 0.41 0.41 1,367 0.41 0.11
2017E 11,747 (7,644) 4,103 (2,327) 2,064 76 1,988 (225) 211 2,187 (363) 0 0 373 1,824 0.55 0.55 1,824 0.55 0.14
2013 2,309 351 1 660 8,541 12,482 2,904 1,552 6,603 333 5,879 12,482
2014 2,477 28 10 664 11,730 17,088 1,012 6,636 10,175 333 6,913 17,088
2015 2,573 142 7 778 13,420 20,471 2,712 6,023 11,743 333 8,727 20,471
2016E 3,762 116 8 772 14,229 23,413 3,129 6,504 12,780 333 10,633 23,413
2017E 2,036 117 8 763 14,817 22,452 4,780 2,534 10,570 333 11,882 22,452
2013 812 5,856 186 (7,392) (538) (1,070) 121 (949) 1,960 0 0 (223) 1,737 250 (1,627) (0.49)
2014 1,301 6,889 62 (9,691) (1,439) (1,080) (573) (1,652) 3,880 0 (267) (354) 3,260 168 (2,968) (0.89)
2015 1,207 7,317 70 (7,452) 1,142 (1,837) (360) (2,197) 1,993 0 (351) (490) 1,152 96 (1,343) (0.40)
2016E 1,367 7,716 73 239 9,395 (855) (256) (1,112) (2,865) 0 (356) (3,874) (7,095) 1,189 8,164 2.45
2017E 1,824 7,797 76 (607) 9,090 (60) (150) (211) (4,441) 0 (400) (5,764) (10,605) (1,726) 8,691 2.61
2013 79.8 186.2 n.m. 37.4 15.2 13.1 8.8 8.8 20.8
2014 12.6 46.4 60.3 38.0 19.7 19.1 12.6 11.5 18.5
2015 4.0 11.6 (7.3) 38.7 21.2 20.5 11.2 11.2 22.0
2016E 7.8 (5.9) 13.3 35.0 18.5 17.8 11.8 11.8 20.0
2017E 1.5 (3.5) 33.4 34.9 17.6 16.9 15.5 15.5 20.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
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, PACE, PLE, TPOLY, M‐CHAI. KT ZMICO is a co‐underwriter of ALT, EKH.
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 UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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th
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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.
