Ananda Development - Global Alliance Partners
-edits
Ananda Development Buy (16E TP Bt4.70)
Company Update
Close Bt4.12
Property Development October 27, 2015
Earnings upgrade/Earnings downgrade/Overview unchanged
3Q15E core profit to improve notably QoQ Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
0.340
0.446
KT ZMICO vs. consensus Share data
2.9%
‐3.6%
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 (%)
14.00/387.00 49.00/6.13
52 week High / Low (Bt)
4.26/2.94
Avg. daily T/O (shares 000)
13,088.00
NVDR (%)
2.88
Estimated free float (%)
44.32
Beta
1.17
URL
www.ananda.co.th
CGR
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Level 2 (Declared)
Maintain “BUY” with 2016E TP raised slightly to Bt4.70/share We slightly fine‐tune our 2016E target price to Bt4.70/share (vs. Bt4.60/share previously), pegged with 11x PER (+0.25SD from the 2013‐ 14 PER average). We reaffirm our “BUY” rating for ANAN thanks to the likelihood that its core profit will begin to recover in 3Q15‐4Q15E. Its core profit is projected to grow further by 23.2% YoY in 2016E, potentially marking the biggest core profit growth in the sector. 9M15 presales accounted for 71% of 2015E target ANAN booked presales of Bt6.3bn in 3Q15 (‐46.2% YoY, +99.3% QoQ). During 9M15, its presales amounted to Bt19.7bn (+21.6% YoY), accounting for 71% of its 2015E target of Bt26.3bn (+25.8% YoY). The presales performance during 9M15 was underpinned by the presales of seven project launches (project value = Bt26.3bn, 41.5% sold) during the same period. The firm plans to launch two new JV‐based condo projects worth Bt10.5bn in 4Q15 and decided to postpone the scheduled launches of two condo projects worth a total of Bt1.5bn to 2016E. Thus, ANAN now anticipates that its 2015E presales may range from around Bt25bn to Bt26bn, falling short of its initial target (vs. our 2015E presales estimate = Bt25bn). 3Q15 core profit may have increased by 137.3% YoY and 282.0% QoQ We forecast ANAN’s 3Q15 core profit at Bt275mn (+137.3% YoY, +282.0% QoQ), up significantly from the previous two quarters on the back of transfer revenue of Bt2.1bn (+26.0% YoY, +75.2% QoQ). In 3Q15, one condo project (i.e., Ideo Wutthakat worth Bt2.14bn, 51.8% sold) was completed and unit transfers are already underway. Core profit is likely to peak in 4Q15 We expect ANAN’s core profit to continue to pick up QoQ in 4Q15 given that one more condo project (i.e., Ideo Mobi Charan‐Interchange worth Bt3.7bn, 76.4% sold) will be completed and transferred during the quarter. In addition, the firm should also realize the transfer revenue from the backlog that has continued since 3Q15. Hence, the firm’s 4Q15E core profit is expected to improve QoQ, marking the best performance for the year. 2015‐16E core profit forecasts revised up slightly by 1.4% ‐ 2.0% We fine‐tune our 2015‐16E core profit forecasts slightly upward by 1.4% ‐ 2.0% from the previous projections to reflect the downward revision made to the 2015‐16E transfer expense assumptions by 20.6% and 33.0%, respectively (thanks to the cut in transfer fees to 0.01% from 1% during 18 Oct 15–30 Apr 16). As a result of the lower transfer expense estimates, our selling expense assumptions for 2015‐16E were lowered by 1.4% and 2.8%, respectively. 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 (%)
2012 5,103 (199) (0.06) N.M. (0.06) N.M. 0.00 1.52 2012 N.M. N.M. 29.3 2.7 0.0 (8.0) 9.7
2013 9,173 812 0.24 N.M. 0.24 N.M. 0.05 1.76 2013 16.9 16.9 11.4 2.3 1.2 14.8 36.5
2014 10,328 1,301 0.39 60.3 0.36 46.8 0.10 2.07 2014 10.6 11.5 9.3 2.0 2.4 20.3 74.8
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2015E 10,522 1,151 0.35 (11.5) 0.35 (3.4) 0.09 2.65 2015E 11.9 11.9 8.8 1.6 2.1 14.6 64.8
2016E 11,436 1,418 0.43 23.2 0.43 23.2 0.11 2.94 2016E 9.7 9.7 11.3 1.4 2.6 15.2 108.6
Figure 1: Quarterly earnings preview
FY Ended 31 Dec
3Q14
2Q15
3Q15E
% YoY
% QoQ
9M15E
% YoY
2015E
% YoY
Revenue from Project sales Total revenue Gross profit
1,667 1,855 735
1,198 1,463 621
2,100 2,365 939
26.0 27.5 27.8
75.2 61.6 51.1
4,499 5,160 2,106
(22.5) (15.8) (5.8)
9,652 10,522 4,142
(0.3) 1.9 5.5
YTD (% 2015E) 46.6 49.0 50.8
EBITDA
385
254
564
46.7
121.9
1,037
(0.0)
2,202
8.1
47.1
Interest expense
(56)
(70)
(75)
34.6
6.9
(207)
35.2
(247)
8.9
83.5
Profit and Loss (Btmn)
52
57
50
(3.2)
(13.0)
155
89.7
193
74.9
80.1
Income tax
Other income
(73)
8
(69)
(5.4)
(927.9)
86
(45.5)
(288)
(2.3)
‐29.9
Gn (Ls) from affiliates
(132)
(124)
(150)
13.5
20.6
(331)
119.2
(536)
83.1
61.8
Net profit (loss)
225
72
275
22.0
282.0
420
(36.0)
1,151
(11.5)
36.5
Core net profit (loss)
116
72
275
137.3
282.0
420
(23.1)
1,151
(3.4)
36.5
Reported EPS (THB)
0.07
0.02
0.08
22.0
282.0
0.13
(36.0)
0.35
(11.5)
36.5
Core EPS (THB)
0.03
0.02
0.08
137.3
282.0
0.13
(23.1)
0.35
(3.4)
36.5
Gross margin‐ Project sales (%)
36.8
37.5
36.5
37.5
34.6
Gross margin ‐ overall (%)
39.6
42.4
39.7
40.8
39.4
EBITDA margin (%)
20.7
17.4
23.9
20.1
20.9
Net margin (%)
12.1
4.9
11.6
8.1
10.9
Current ratio (x)
3.2
3.6
‐
‐
4.3
Interest coverage (x)
6.6
3.4
7.3
4.8
8.7
Debt / equity (x)
1.6
1.9
‐
‐
1.5
‐
2.65
‐
14.6
BVPS (Bt)
1.88
2.05
‐
ROE (%)
26.7
14.7
‐
Source: ANAN, KT ZMICO Research
Figure 2: Major forecast revisions Btmn
Old 2015E 2016E
New 2015E 2016E
% Change 2015E 2016E
Remark
Residential sales
9,652
10,513
9,652
10,513
0.0
0.0
Maintains forecasts
High rise
7,336
7,992
7,336
7,992
0.0
0.0
Low rise
2,315
2,521
2,315
2,521
0.0
0.0
Transfer fee
97
105
77
70
(20.6)
(33.0)
Special Business Tax
318
347
318
347
0.0
0.0
Decreases along with transfers
Selling expenses
1,182
1,250
1,163
1,216
(1.7)
(2.8)
Core profit
1,135
1,390
1,151
1,418
1.4
2.0
Net profit
1,135
1,390
1,151
1,418
1.4
2.0
Transfer fee cut to 0.01% from 1% for 6 months (18 Oct 15‐30 Apr 16)
Source: ANAN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 3: Major assumptions
2012
Revenue
Project sales
2014
4,960
Project management and services
2013
2015E
8,808
9,678
2016E
9,652
10,513
143
365
650
871
923
5,103
9,173
10,328
10,522
11,436
Revenue growth YoY
Total
Project sales
‐9.5%
77.6%
9.9%
‐0.3%
8.9%
Project management and services
‐19.7%
156.2%
78.0%
33.9%
6.0%
Total
‐9.9%
79.8%
12.6%
1.9%
8.7%
Gross margin
Project sales
32.3%
37.5%
36.9%
37.6%
34.6%
Project management and services
35.0%
42.1%
56.4%
58.9%
59.3%
Overall GPM
32.4%
37.4%
38.0%
39.4%
36.6%
NPM
‐3.9%
8.8%
12.6%
10.9%
12.4%
Source: ANAN, KT ZMICO Research Figure 4: Presales
Figure 5: Completions of CD by quarter
Btmn
Btmn
20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 ‐
4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 1Q15
Condo
2Q15
3Q15
4Q15
Low rise
Source: ANAN, KT ZMICO Research
Source: ANAN, KT ZMICO Research
Figure 6: ANAN’s new launches in 4Q15 Project Launch Silom‐Chong Nonsi (JV) 4Q15 Tao Poon Bang Sue (JV) 4Q15 Total Project Value
Transfer 2018 2018
Figure 7: JV projects to be launched No. of JV Projects 3Q15 2 4Q15 2 1Q16 1 To be launched 5
Value (Bt mn) 8,000 2,500 10,500
Source: ANAN, KT ZMICO Research
Source: ANAN, KT ZMICO Research
JV Project Value (Bt mn) 7,779 8,388 3,006 19,173
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 (%)
2012 5,103 (3,449) 1,654 (1,291) 486 444 42 (307) 378 (250) 51 0 0 8 (199) (0.06) (0.06) (199) (0.06) 0.00
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
2015E 10,522 (6,381) 4,142 (2,192) 2,202 60 2,143 (247) 193 1,439 (288) 0 0 (536) 1,151 0.35 0.35 1,151 0.35 0.09
2016E 11,436 (7,255) 4,181 (2,307) 2,148 64 2,084 (268) 210 1,772 (354) 0 0 (94) 1,418 0.43 0.43 1,418 0.43 0.11
2012 2,159 21 1 530 6,350 9,494 544 2,108 4,424 333 5,070 9,494
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
2015E 4,552 53 8 692 12,111 21,653 1,367 8,900 12,829 333 8,824 21,653
2016E 192 57 8 706 17,667 23,512 4,096 6,727 13,719 333 9,794 23,512
2012 (199) 3,180 444 (1,696) 1,730 (200) 237 37 (4,730) 5,389 0 (429) 230 1,996 1,847 0.55
2013 812 5,856 186 (7,392) (538) (1,070) 121 (949) 1,960 0 0 (223) 1,737 250 (1,186) (0.36)
2014 1,301 6,934 62 (9,737) (1,439) (1,080) (573) (1,652) 3,880 0 (267) (354) 3,260 168 (2,902) (0.87)
2015E 1,151 6,643 60 (331) 7,523 (1,579) 238 (1,341) 1,539 0 (207) (5,439) (4,107) 2,075 7,108 2.13
2016E 1,418 7,581 64 (5,290) 3,773 (280) 50 (230) (2,653) 0 (358) (4,892) (7,904) (4,361) 3,288 0.99
2012 (9.9) 4.3 N.M 32.4 9.5 0.8 (3.9) (3.9) 20.8
2013 79.8 186.2 N.M. 37.4 15.2 13.1 8.8 8.8 18.5
2014 12.6 46.4 60.3 38.0 19.7 19.1 12.6 11.5 20.0
2015E 1.9 8.1 (11.5) 39.4 20.9 20.4 10.9 10.9 20.0
2016E 8.7 (2.5) 23.2 36.6 18.8 18.2 12.4 12.4 20.0
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, KBS, PSL, SVH, VNG, ZMICO, CPI . KT ZMICO is a financial advisor for U, LOXLEY, SUTHA, ZMICO, MAKRO, CPALL, PLE, SAFARI, PACE, TPOLY, TFG. KT ZMICO is a co‐underwriter of KOOL, ORI, SCI, SR.
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
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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.
Ananda Development Buy (16E TP Bt4.70)
Company Update
Close Bt4.12
Property Development October 27, 2015
Earnings upgrade/Earnings downgrade/Overview unchanged
3Q15E core profit to improve notably QoQ Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
0.340
0.446
KT ZMICO vs. consensus Share data
2.9%
‐3.6%
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 (%)
14.00/387.00 49.00/6.13
52 week High / Low (Bt)
4.26/2.94
Avg. daily T/O (shares 000)
13,088.00
NVDR (%)
2.88
Estimated free float (%)
44.32
Beta
1.17
URL
www.ananda.co.th
CGR
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Level 2 (Declared)
Maintain “BUY” with 2016E TP raised slightly to Bt4.70/share We slightly fine‐tune our 2016E target price to Bt4.70/share (vs. Bt4.60/share previously), pegged with 11x PER (+0.25SD from the 2013‐ 14 PER average). We reaffirm our “BUY” rating for ANAN thanks to the likelihood that its core profit will begin to recover in 3Q15‐4Q15E. Its core profit is projected to grow further by 23.2% YoY in 2016E, potentially marking the biggest core profit growth in the sector. 9M15 presales accounted for 71% of 2015E target ANAN booked presales of Bt6.3bn in 3Q15 (‐46.2% YoY, +99.3% QoQ). During 9M15, its presales amounted to Bt19.7bn (+21.6% YoY), accounting for 71% of its 2015E target of Bt26.3bn (+25.8% YoY). The presales performance during 9M15 was underpinned by the presales of seven project launches (project value = Bt26.3bn, 41.5% sold) during the same period. The firm plans to launch two new JV‐based condo projects worth Bt10.5bn in 4Q15 and decided to postpone the scheduled launches of two condo projects worth a total of Bt1.5bn to 2016E. Thus, ANAN now anticipates that its 2015E presales may range from around Bt25bn to Bt26bn, falling short of its initial target (vs. our 2015E presales estimate = Bt25bn). 3Q15 core profit may have increased by 137.3% YoY and 282.0% QoQ We forecast ANAN’s 3Q15 core profit at Bt275mn (+137.3% YoY, +282.0% QoQ), up significantly from the previous two quarters on the back of transfer revenue of Bt2.1bn (+26.0% YoY, +75.2% QoQ). In 3Q15, one condo project (i.e., Ideo Wutthakat worth Bt2.14bn, 51.8% sold) was completed and unit transfers are already underway. Core profit is likely to peak in 4Q15 We expect ANAN’s core profit to continue to pick up QoQ in 4Q15 given that one more condo project (i.e., Ideo Mobi Charan‐Interchange worth Bt3.7bn, 76.4% sold) will be completed and transferred during the quarter. In addition, the firm should also realize the transfer revenue from the backlog that has continued since 3Q15. Hence, the firm’s 4Q15E core profit is expected to improve QoQ, marking the best performance for the year. 2015‐16E core profit forecasts revised up slightly by 1.4% ‐ 2.0% We fine‐tune our 2015‐16E core profit forecasts slightly upward by 1.4% ‐ 2.0% from the previous projections to reflect the downward revision made to the 2015‐16E transfer expense assumptions by 20.6% and 33.0%, respectively (thanks to the cut in transfer fees to 0.01% from 1% during 18 Oct 15–30 Apr 16). As a result of the lower transfer expense estimates, our selling expense assumptions for 2015‐16E were lowered by 1.4% and 2.8%, respectively. 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 (%)
2012 5,103 (199) (0.06) N.M. (0.06) N.M. 0.00 1.52 2012 N.M. N.M. 29.3 2.7 0.0 (8.0) 9.7
2013 9,173 812 0.24 N.M. 0.24 N.M. 0.05 1.76 2013 16.9 16.9 11.4 2.3 1.2 14.8 36.5
2014 10,328 1,301 0.39 60.3 0.36 46.8 0.10 2.07 2014 10.6 11.5 9.3 2.0 2.4 20.3 74.8
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2015E 10,522 1,151 0.35 (11.5) 0.35 (3.4) 0.09 2.65 2015E 11.9 11.9 8.8 1.6 2.1 14.6 64.8
2016E 11,436 1,418 0.43 23.2 0.43 23.2 0.11 2.94 2016E 9.7 9.7 11.3 1.4 2.6 15.2 108.6
Figure 1: Quarterly earnings preview
FY Ended 31 Dec
3Q14
2Q15
3Q15E
% YoY
% QoQ
9M15E
% YoY
2015E
% YoY
Revenue from Project sales Total revenue Gross profit
1,667 1,855 735
1,198 1,463 621
2,100 2,365 939
26.0 27.5 27.8
75.2 61.6 51.1
4,499 5,160 2,106
(22.5) (15.8) (5.8)
9,652 10,522 4,142
(0.3) 1.9 5.5
YTD (% 2015E) 46.6 49.0 50.8
EBITDA
385
254
564
46.7
121.9
1,037
(0.0)
2,202
8.1
47.1
Interest expense
(56)
(70)
(75)
34.6
6.9
(207)
35.2
(247)
8.9
83.5
Profit and Loss (Btmn)
52
57
50
(3.2)
(13.0)
155
89.7
193
74.9
80.1
Income tax
Other income
(73)
8
(69)
(5.4)
(927.9)
86
(45.5)
(288)
(2.3)
‐29.9
Gn (Ls) from affiliates
(132)
(124)
(150)
13.5
20.6
(331)
119.2
(536)
83.1
61.8
Net profit (loss)
225
72
275
22.0
282.0
420
(36.0)
1,151
(11.5)
36.5
Core net profit (loss)
116
72
275
137.3
282.0
420
(23.1)
1,151
(3.4)
36.5
Reported EPS (THB)
0.07
0.02
0.08
22.0
282.0
0.13
(36.0)
0.35
(11.5)
36.5
Core EPS (THB)
0.03
0.02
0.08
137.3
282.0
0.13
(23.1)
0.35
(3.4)
36.5
Gross margin‐ Project sales (%)
36.8
37.5
36.5
37.5
34.6
Gross margin ‐ overall (%)
39.6
42.4
39.7
40.8
39.4
EBITDA margin (%)
20.7
17.4
23.9
20.1
20.9
Net margin (%)
12.1
4.9
11.6
8.1
10.9
Current ratio (x)
3.2
3.6
‐
‐
4.3
Interest coverage (x)
6.6
3.4
7.3
4.8
8.7
Debt / equity (x)
1.6
1.9
‐
‐
1.5
‐
2.65
‐
14.6
BVPS (Bt)
1.88
2.05
‐
ROE (%)
26.7
14.7
‐
Source: ANAN, KT ZMICO Research
Figure 2: Major forecast revisions Btmn
Old 2015E 2016E
New 2015E 2016E
% Change 2015E 2016E
Remark
Residential sales
9,652
10,513
9,652
10,513
0.0
0.0
Maintains forecasts
High rise
7,336
7,992
7,336
7,992
0.0
0.0
Low rise
2,315
2,521
2,315
2,521
0.0
0.0
Transfer fee
97
105
77
70
(20.6)
(33.0)
Special Business Tax
318
347
318
347
0.0
0.0
Decreases along with transfers
Selling expenses
1,182
1,250
1,163
1,216
(1.7)
(2.8)
Core profit
1,135
1,390
1,151
1,418
1.4
2.0
Net profit
1,135
1,390
1,151
1,418
1.4
2.0
Transfer fee cut to 0.01% from 1% for 6 months (18 Oct 15‐30 Apr 16)
Source: ANAN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 3: Major assumptions
2012
Revenue
Project sales
2014
4,960
Project management and services
2013
2015E
8,808
9,678
2016E
9,652
10,513
143
365
650
871
923
5,103
9,173
10,328
10,522
11,436
Revenue growth YoY
Total
Project sales
‐9.5%
77.6%
9.9%
‐0.3%
8.9%
Project management and services
‐19.7%
156.2%
78.0%
33.9%
6.0%
Total
‐9.9%
79.8%
12.6%
1.9%
8.7%
Gross margin
Project sales
32.3%
37.5%
36.9%
37.6%
34.6%
Project management and services
35.0%
42.1%
56.4%
58.9%
59.3%
Overall GPM
32.4%
37.4%
38.0%
39.4%
36.6%
NPM
‐3.9%
8.8%
12.6%
10.9%
12.4%
Source: ANAN, KT ZMICO Research Figure 4: Presales
Figure 5: Completions of CD by quarter
Btmn
Btmn
20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 ‐
4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 1Q15
Condo
2Q15
3Q15
4Q15
Low rise
Source: ANAN, KT ZMICO Research
Source: ANAN, KT ZMICO Research
Figure 6: ANAN’s new launches in 4Q15 Project Launch Silom‐Chong Nonsi (JV) 4Q15 Tao Poon Bang Sue (JV) 4Q15 Total Project Value
Transfer 2018 2018
Figure 7: JV projects to be launched No. of JV Projects 3Q15 2 4Q15 2 1Q16 1 To be launched 5
Value (Bt mn) 8,000 2,500 10,500
Source: ANAN, KT ZMICO Research
Source: ANAN, KT ZMICO Research
JV Project Value (Bt mn) 7,779 8,388 3,006 19,173
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 (%)
2012 5,103 (3,449) 1,654 (1,291) 486 444 42 (307) 378 (250) 51 0 0 8 (199) (0.06) (0.06) (199) (0.06) 0.00
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
2015E 10,522 (6,381) 4,142 (2,192) 2,202 60 2,143 (247) 193 1,439 (288) 0 0 (536) 1,151 0.35 0.35 1,151 0.35 0.09
2016E 11,436 (7,255) 4,181 (2,307) 2,148 64 2,084 (268) 210 1,772 (354) 0 0 (94) 1,418 0.43 0.43 1,418 0.43 0.11
2012 2,159 21 1 530 6,350 9,494 544 2,108 4,424 333 5,070 9,494
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
2015E 4,552 53 8 692 12,111 21,653 1,367 8,900 12,829 333 8,824 21,653
2016E 192 57 8 706 17,667 23,512 4,096 6,727 13,719 333 9,794 23,512
2012 (199) 3,180 444 (1,696) 1,730 (200) 237 37 (4,730) 5,389 0 (429) 230 1,996 1,847 0.55
2013 812 5,856 186 (7,392) (538) (1,070) 121 (949) 1,960 0 0 (223) 1,737 250 (1,186) (0.36)
2014 1,301 6,934 62 (9,737) (1,439) (1,080) (573) (1,652) 3,880 0 (267) (354) 3,260 168 (2,902) (0.87)
2015E 1,151 6,643 60 (331) 7,523 (1,579) 238 (1,341) 1,539 0 (207) (5,439) (4,107) 2,075 7,108 2.13
2016E 1,418 7,581 64 (5,290) 3,773 (280) 50 (230) (2,653) 0 (358) (4,892) (7,904) (4,361) 3,288 0.99
2012 (9.9) 4.3 N.M 32.4 9.5 0.8 (3.9) (3.9) 20.8
2013 79.8 186.2 N.M. 37.4 15.2 13.1 8.8 8.8 18.5
2014 12.6 46.4 60.3 38.0 19.7 19.1 12.6 11.5 20.0
2015E 1.9 8.1 (11.5) 39.4 20.9 20.4 10.9 10.9 20.0
2016E 8.7 (2.5) 23.2 36.6 18.8 18.2 12.4 12.4 20.0
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, KBS, PSL, SVH, VNG, ZMICO, CPI . KT ZMICO is a financial advisor for U, LOXLEY, SUTHA, ZMICO, MAKRO, CPALL, PLE, SAFARI, PACE, TPOLY, TFG. KT ZMICO is a co‐underwriter of KOOL, ORI, SCI, SR.
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
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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.
