AP (Thailand) - Global Alliance Partners
AP (Thailand) Buy (16E TP Bt6.90)
Company Update
Close Bt5.55
Property Development January 13, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
2015E presales in line but transfers to be lower than previously forecast Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
0.860
0.937
KT ZMICO vs. consensus Share data
‐8.1%
‐7.2%
Reuters / Bloomberg
AP.BK/AP TB
Paid‐up Shares (m)
3,145.90
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
17.00/481.00
Foreign limit / actual (%)
30.00/25.93
52 week High / Low (Bt)
7.80/4.98
Avg. daily T/O (shares 000)
10,391.00
NVDR (%)
13.17
Estimated free float (%)
63.97
Beta
0.95
URL
www.apthai.com
CGR
Anti‐corruption
Level 3A (Established)
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Maintain Buy with lower 2016E TP at Bt6.90 We have lowered our 2016E TP for AP to Bt6.9 (8x PER) from Bt7.6 due to the downward revision to 2015‐16E net profit by 8.5%‐10.4%, respectively. Nevertheless, we maintain Buy for long‐term investment as we expect AP’s core profit to grow by 10.0% in 2016E backed by the property stimulus measures. Moreover, it will continue to rise by 22.1% YoY in 2017E after the firm starts realizing a significant share of profit from JVs. We also expect AP to pay DPS of Bt0.28 for its performance in 2015E, implying a dividend yield of 5.0%. 2015 presales was in line with the firm’s target AP reported 4Q15 presales at Bt5.87bn (+13.2% YoY, +16.4% QoQ) as it opened five low‐rise projects (Bt2.7bn, sold 8%) and one JV condo (Life Pinklao, Bt3.1bn, sold 16%). The total presales achieved during 2015 amounted to Bt28.2bn, which was in line with the firm’s target of Bt28.3bn. In 2015, AP launched 16 low‐rise projects with a total value of Bt11.5bn and seven condo projects with a total value of Bt17.3bn. In 2016, it plans to launch low‐rise projects and condo projects with a total value of Bt33.1bn (+15% YoY). The firm targets its 2016 presales growth at 10‐12% YoY and the revenue target will increase around 6‐10% YoY. 4Q15E core profit to decrease YoY and QoQ We expect AP’s 4Q15 core profit at Bt531mn (‐12.8% YoY, ‐14.5% QoQ). We estimate 4Q15 transfers at Bt5.85bn (‐2.6% QoQ, +9.0% YoY), which is lower than our previous expectation due to the slower rate of some condo transfers, such as The Rhythm Sathorn (Bt5.3bn, 57% sold). In contrast, its low‐rise transfers were better than our previous prediction, implying that the firm’s low‐rise products meet customers’ demand. Cut 2015‐16E core profit forecasts by 8.5%‐10.4% We revised down our 2015‐16E transfer revenue estimates by 4.5% and 1.6%, respectively. Such downward revisions are mainly due to the high‐ rise transfer rate being lower than the previous forecast and the increasing percentage of the 2015‐16E SG&A/revenue assumptions as we expect the firm to incur more marketing costs to drive its presales and transfers. Hence, this brought the 2015‐16E core profit down by 8.9% and 10.4%. Financials and Valuation FY Ended 31 Dec Revenues (Btm) Net profit (Btm) EPS (Bt) EPS growth (%) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) Normalized PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2013 19,989 2,013 0.70
2014 23,149 2,615 0.83
2015E 22,117 2,478 0.79
2016E 23,211 2,725 0.87
2017E 23,742 3,328 1.06
(8.3)
18.1
(5.3)
10.0
22.1
0.70
0.83
0.74
0.87
1.06
(3.1)
18.3
(10.4)
16.4
22.1
0.25 4.90 2013 7.9 7.9 10.2 1.1 4.5 14.4 103.8
0.38 5.04 2014 6.7 6.7 8.5 1.1 6.8 16.5 89.9
0.28 5.56 2015E 7.0 7.5 9.5 1.0 5.0 14.2 96.1
0.30 6.15 2016E 6.4 6.4 9.4 0.9 5.5 14.1 90.6
0.35 6.90 2017E 5.2 5.2 9.3 0.8 6.3 15.3 79.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
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
6,008 6,068 2,102
5,371 5,499 1,876
5,853 5,996 2,006
(2.6) (1.2) (4.6)
9.0 9.0 6.9
22,941 23,149 7,845
21,672 22,117 7,548
(5.5) (4.5) (3.8)
EBITDA
909
963
898
(1.2)
(6.8)
3,725
3,619
(2.8)
Interest expense
(96)
(71)
(90)
(6.4)
26.0
(344)
(320)
(7.0)
Other income Income tax Other extraordinary Items Gn (Ls) from affiliates
10
30
10
4.0
(66.5)
47
116
145.4
(170)
(213)
(152)
(10.2)
(28.4)
(627)
(695)
10.9
0
155
0
962
(100.0)
2
172
8,079
(21)
(72)
(108)
425.3
49.4
(66)
(250)
280.9
Net profit (loss)
608
745
531
(12.8)
(28.8)
2,615
2,478
(5.3)
Core net profit (loss)
608
621
531
(12.8)
(14.5)
2,613
2,341
(10.4)
Reported EPS (THB)
0.19
0.24
0.17
(12.8)
(28.8)
0.83
0.79
(5.3)
Core EPS (THB)
0.19
0.20
0.17
(12.8)
(14.5)
0.83
0.74
(10.4)
Gross margin – project sales (%)
34.2
32.7
32.2
33.5
33.0
Gross margin ‐ overall (%)
34.6
34.1
33.5
33.9
34.1
EBITDA margin (%)
15.0
17.5
15.0
16.1
16.4
Net margin (%)
10.0
13.5
8.9
11.3
11.2
Current ratio (x)
3.8
4.1
3.8
3.8
3.8
Interest coverage (x)
9.3
9.7
9.7
10.6
11.1
Debt / equity (x)
1.2
1.1
1.2
1.2
1.2
BVPS (Bt)
5.04
5.40
5.56
5.04
5.56
ROE (%)
16.8
15.4
14.2
16.5
14.2
Source: AP, KT ZMICO Research
Figure 2: Major forecast revisions Btmn Residential sales
Old 2015E 2016E 22,686 23,083
New 2015E 2016E 21,672 22,706
% Change Remark 2015E 2016E (4.5) (1.6) Decreases along with lower high‐rise transfers
Low rise
12,252
13,086 12,414
13,260
1.3
1.3
Low‐rise transfers were better than previous forecast
High rise
10,434
9,997
9,258
9,446
(11.3)
(5.5)
Some high‐rise transfers were lower than previous estimates
Selling expenses
4,168
4,259
4,083
4,230
(2.0)
(0.7)
Decreases along with transfers cut
% SG&A/Revenue
18.4%
18.5%
18.8%
18.6%
0.5
0.2
Core profit
2,569
3,041
2,341
2,725
(8.9)
(10.4)
Decreases along with transfers cut
Net profit 2,707 Source: AP, KT ZMICO Research
3,041
2,478
2,725
(8.5)
(10.4)
Decreases along with transfers cut
Percentage increase due to higher marketing & admin expense forecasts
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 3: Major assumptions Revenue Residential Low rise High rise Service income Total Equity gain (loss) from JVs Growth (%) Residential Low rise High rise Service income Total Equity gain (loss) from JVs GPM (%) Residential overall Service income Total NPM
2012
2013
2014
17,197 9,324 7,872 113 17,309 0.0 27.0 46.6 9.6 15.9 26.9 ‐ 34.4 0.0 34.9 12.6
2015E
19,854 10,092 9,761 134 19,987 (1.3) 15.5 8.2 24.0 18.9 15.5 N.M. 33.3 76.3 33.6 10.1
22,941 11,700 11,241 208 23,149 (65.6) 15.5 15.9 15.2 54.7 15.8 N.M. 33.5 74.4 33.9 11.3
2016E
21,672 12,414 9,258 445 22,117 (250.0) (5.5) 6.1 (17.6) 114.3 (4.5) N.M. 33.0 75.0 34.1 11.2
2017E
22,706 13,260 9,446 504 23,211 164.8 4.8 6.8 2.0 13.3 4.9 N.M. 32.5 75.0 33.7 11.7
23,233 13,976 9,257 509 23,742 931.3 2.3 5.4 (2.0) 0.9 2.3 465.3 32.5 75.0 33.7 14.0
Source: AP, KT ZMICO Research
Figure 4: Presales
Figure 5: Backlog at end 3Q15
Btmn 30,000 25,000
2017 2,237
20,000 15,000
Total Backlog Bt12,368mn
10,000 5,000
2016 3,449
‐
Low rise
2015 6,682
High rise
Source: AP, KT ZMICO Research
Source: AP, 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 ‐ residential (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 19,989 (13,270) 6,718 (3,944) 2,991 159 2,832 (293) 58 2,552 (539) 0 5 (1) 2,013 0.70 0.70 2,009 0.70 0.25
2014 23,149 (15,304) 7,845 (4,140) 3,725 84 3,641 (344) 159 3,242 (627) 0 2 (66) 2,615 0.83 0.83 2,613 0.83 0.38
2015E 22,117 (14,569) 7,548 (4,083) 3,619 79 3,541 (320) 157 3,173 (695) 0 172 (250) 2,478 0.79 0.79 2,341 0.74 0.28
2016E 23,211 (15,378) 7,833 (4,230) 3,715 62 3,653 (366) 50 3,471 (746) 0 0 165 2,725 0.87 0.87 2,725 0.87 0.30
2017E 23,742 (15,734) 8,007 (4,416) 3,711 68 3,643 (354) 51 4,240 (912) 0 0 931 3,328 1.06 1.06 3,328 1.06 0.35
2013 889 110 30,784 550 1,375 34,410 5,059 10,371 20,402 2,860 14,007 34,410
2014 463 96 31,673 770 1,503 35,564 4,431 10,274 19,715 3,146 15,848 35,564
2015E 100 119 35,574 764 1,409 39,356 6,182 10,724 21,876 3,146 17,480 39,356
2016E 100 124 38,429 750 1,135 42,183 4,390 13,224 22,845 3,146 19,338 42,183
2017E 100 127 40,314 731 1,162 44,330 5,172 12,074 22,617 3,146 21,712 44,330
2013 2,013 (422) 159 (4,419) (2,669) (95) 6 (89) 3,589 29 (715) 0 2,903 145 (2,331) (0.82)
2014 2,615 (181) 84 (1,563) 956 (433) 552 119 (729) 0 (772) 0 (1,501) (426) 1,280 0.41
2015E 2,478 263 79 (3,395) (576) (550) (4) (554) 2,201 0 (818) (617) 766 (363) (625) (0.20)
2016E 2,725 (148) 62 (2,611) 28 (300) 0 (300) 707 0 (867) 432 272 0 (22) (0.01)
2017E 3,328 (911) 68 (1,759) 726 (300) 0 (300) (367) 0 (954) 895 (426) 0 676 0.21
2013 15.5 (3.6) (8.3) 33.6 15.0 14.2 10.1 10.0 21.1
2014 15.8 24.5 18.1 33.9 16.1 15.7 11.3 11.3 19.3
2015E (4.5) (2.8) (5.3) 34.1 16.4 16.0 11.2 10.6 21.9
2016E 4.9 2.6 10.0 33.7 16.0 15.7 11.7 11.7 21.5
2017E 2.3 (0.1) 22.1 33.7 15.6 15.3 14.0 14.0 21.5
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, SAWAD. 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 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
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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 Bt5.55
Property Development January 13, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
2015E presales in line but transfers to be lower than previously forecast Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
0.860
0.937
KT ZMICO vs. consensus Share data
‐8.1%
‐7.2%
Reuters / Bloomberg
AP.BK/AP TB
Paid‐up Shares (m)
3,145.90
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
17.00/481.00
Foreign limit / actual (%)
30.00/25.93
52 week High / Low (Bt)
7.80/4.98
Avg. daily T/O (shares 000)
10,391.00
NVDR (%)
13.17
Estimated free float (%)
63.97
Beta
0.95
URL
www.apthai.com
CGR
Anti‐corruption
Level 3A (Established)
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Maintain Buy with lower 2016E TP at Bt6.90 We have lowered our 2016E TP for AP to Bt6.9 (8x PER) from Bt7.6 due to the downward revision to 2015‐16E net profit by 8.5%‐10.4%, respectively. Nevertheless, we maintain Buy for long‐term investment as we expect AP’s core profit to grow by 10.0% in 2016E backed by the property stimulus measures. Moreover, it will continue to rise by 22.1% YoY in 2017E after the firm starts realizing a significant share of profit from JVs. We also expect AP to pay DPS of Bt0.28 for its performance in 2015E, implying a dividend yield of 5.0%. 2015 presales was in line with the firm’s target AP reported 4Q15 presales at Bt5.87bn (+13.2% YoY, +16.4% QoQ) as it opened five low‐rise projects (Bt2.7bn, sold 8%) and one JV condo (Life Pinklao, Bt3.1bn, sold 16%). The total presales achieved during 2015 amounted to Bt28.2bn, which was in line with the firm’s target of Bt28.3bn. In 2015, AP launched 16 low‐rise projects with a total value of Bt11.5bn and seven condo projects with a total value of Bt17.3bn. In 2016, it plans to launch low‐rise projects and condo projects with a total value of Bt33.1bn (+15% YoY). The firm targets its 2016 presales growth at 10‐12% YoY and the revenue target will increase around 6‐10% YoY. 4Q15E core profit to decrease YoY and QoQ We expect AP’s 4Q15 core profit at Bt531mn (‐12.8% YoY, ‐14.5% QoQ). We estimate 4Q15 transfers at Bt5.85bn (‐2.6% QoQ, +9.0% YoY), which is lower than our previous expectation due to the slower rate of some condo transfers, such as The Rhythm Sathorn (Bt5.3bn, 57% sold). In contrast, its low‐rise transfers were better than our previous prediction, implying that the firm’s low‐rise products meet customers’ demand. Cut 2015‐16E core profit forecasts by 8.5%‐10.4% We revised down our 2015‐16E transfer revenue estimates by 4.5% and 1.6%, respectively. Such downward revisions are mainly due to the high‐ rise transfer rate being lower than the previous forecast and the increasing percentage of the 2015‐16E SG&A/revenue assumptions as we expect the firm to incur more marketing costs to drive its presales and transfers. Hence, this brought the 2015‐16E core profit down by 8.9% and 10.4%. Financials and Valuation FY Ended 31 Dec Revenues (Btm) Net profit (Btm) EPS (Bt) EPS growth (%) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) Normalized PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2013 19,989 2,013 0.70
2014 23,149 2,615 0.83
2015E 22,117 2,478 0.79
2016E 23,211 2,725 0.87
2017E 23,742 3,328 1.06
(8.3)
18.1
(5.3)
10.0
22.1
0.70
0.83
0.74
0.87
1.06
(3.1)
18.3
(10.4)
16.4
22.1
0.25 4.90 2013 7.9 7.9 10.2 1.1 4.5 14.4 103.8
0.38 5.04 2014 6.7 6.7 8.5 1.1 6.8 16.5 89.9
0.28 5.56 2015E 7.0 7.5 9.5 1.0 5.0 14.2 96.1
0.30 6.15 2016E 6.4 6.4 9.4 0.9 5.5 14.1 90.6
0.35 6.90 2017E 5.2 5.2 9.3 0.8 6.3 15.3 79.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
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
6,008 6,068 2,102
5,371 5,499 1,876
5,853 5,996 2,006
(2.6) (1.2) (4.6)
9.0 9.0 6.9
22,941 23,149 7,845
21,672 22,117 7,548
(5.5) (4.5) (3.8)
EBITDA
909
963
898
(1.2)
(6.8)
3,725
3,619
(2.8)
Interest expense
(96)
(71)
(90)
(6.4)
26.0
(344)
(320)
(7.0)
Other income Income tax Other extraordinary Items Gn (Ls) from affiliates
10
30
10
4.0
(66.5)
47
116
145.4
(170)
(213)
(152)
(10.2)
(28.4)
(627)
(695)
10.9
0
155
0
962
(100.0)
2
172
8,079
(21)
(72)
(108)
425.3
49.4
(66)
(250)
280.9
Net profit (loss)
608
745
531
(12.8)
(28.8)
2,615
2,478
(5.3)
Core net profit (loss)
608
621
531
(12.8)
(14.5)
2,613
2,341
(10.4)
Reported EPS (THB)
0.19
0.24
0.17
(12.8)
(28.8)
0.83
0.79
(5.3)
Core EPS (THB)
0.19
0.20
0.17
(12.8)
(14.5)
0.83
0.74
(10.4)
Gross margin – project sales (%)
34.2
32.7
32.2
33.5
33.0
Gross margin ‐ overall (%)
34.6
34.1
33.5
33.9
34.1
EBITDA margin (%)
15.0
17.5
15.0
16.1
16.4
Net margin (%)
10.0
13.5
8.9
11.3
11.2
Current ratio (x)
3.8
4.1
3.8
3.8
3.8
Interest coverage (x)
9.3
9.7
9.7
10.6
11.1
Debt / equity (x)
1.2
1.1
1.2
1.2
1.2
BVPS (Bt)
5.04
5.40
5.56
5.04
5.56
ROE (%)
16.8
15.4
14.2
16.5
14.2
Source: AP, KT ZMICO Research
Figure 2: Major forecast revisions Btmn Residential sales
Old 2015E 2016E 22,686 23,083
New 2015E 2016E 21,672 22,706
% Change Remark 2015E 2016E (4.5) (1.6) Decreases along with lower high‐rise transfers
Low rise
12,252
13,086 12,414
13,260
1.3
1.3
Low‐rise transfers were better than previous forecast
High rise
10,434
9,997
9,258
9,446
(11.3)
(5.5)
Some high‐rise transfers were lower than previous estimates
Selling expenses
4,168
4,259
4,083
4,230
(2.0)
(0.7)
Decreases along with transfers cut
% SG&A/Revenue
18.4%
18.5%
18.8%
18.6%
0.5
0.2
Core profit
2,569
3,041
2,341
2,725
(8.9)
(10.4)
Decreases along with transfers cut
Net profit 2,707 Source: AP, KT ZMICO Research
3,041
2,478
2,725
(8.5)
(10.4)
Decreases along with transfers cut
Percentage increase due to higher marketing & admin expense forecasts
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 3: Major assumptions Revenue Residential Low rise High rise Service income Total Equity gain (loss) from JVs Growth (%) Residential Low rise High rise Service income Total Equity gain (loss) from JVs GPM (%) Residential overall Service income Total NPM
2012
2013
2014
17,197 9,324 7,872 113 17,309 0.0 27.0 46.6 9.6 15.9 26.9 ‐ 34.4 0.0 34.9 12.6
2015E
19,854 10,092 9,761 134 19,987 (1.3) 15.5 8.2 24.0 18.9 15.5 N.M. 33.3 76.3 33.6 10.1
22,941 11,700 11,241 208 23,149 (65.6) 15.5 15.9 15.2 54.7 15.8 N.M. 33.5 74.4 33.9 11.3
2016E
21,672 12,414 9,258 445 22,117 (250.0) (5.5) 6.1 (17.6) 114.3 (4.5) N.M. 33.0 75.0 34.1 11.2
2017E
22,706 13,260 9,446 504 23,211 164.8 4.8 6.8 2.0 13.3 4.9 N.M. 32.5 75.0 33.7 11.7
23,233 13,976 9,257 509 23,742 931.3 2.3 5.4 (2.0) 0.9 2.3 465.3 32.5 75.0 33.7 14.0
Source: AP, KT ZMICO Research
Figure 4: Presales
Figure 5: Backlog at end 3Q15
Btmn 30,000 25,000
2017 2,237
20,000 15,000
Total Backlog Bt12,368mn
10,000 5,000
2016 3,449
‐
Low rise
2015 6,682
High rise
Source: AP, KT ZMICO Research
Source: AP, 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 ‐ residential (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 19,989 (13,270) 6,718 (3,944) 2,991 159 2,832 (293) 58 2,552 (539) 0 5 (1) 2,013 0.70 0.70 2,009 0.70 0.25
2014 23,149 (15,304) 7,845 (4,140) 3,725 84 3,641 (344) 159 3,242 (627) 0 2 (66) 2,615 0.83 0.83 2,613 0.83 0.38
2015E 22,117 (14,569) 7,548 (4,083) 3,619 79 3,541 (320) 157 3,173 (695) 0 172 (250) 2,478 0.79 0.79 2,341 0.74 0.28
2016E 23,211 (15,378) 7,833 (4,230) 3,715 62 3,653 (366) 50 3,471 (746) 0 0 165 2,725 0.87 0.87 2,725 0.87 0.30
2017E 23,742 (15,734) 8,007 (4,416) 3,711 68 3,643 (354) 51 4,240 (912) 0 0 931 3,328 1.06 1.06 3,328 1.06 0.35
2013 889 110 30,784 550 1,375 34,410 5,059 10,371 20,402 2,860 14,007 34,410
2014 463 96 31,673 770 1,503 35,564 4,431 10,274 19,715 3,146 15,848 35,564
2015E 100 119 35,574 764 1,409 39,356 6,182 10,724 21,876 3,146 17,480 39,356
2016E 100 124 38,429 750 1,135 42,183 4,390 13,224 22,845 3,146 19,338 42,183
2017E 100 127 40,314 731 1,162 44,330 5,172 12,074 22,617 3,146 21,712 44,330
2013 2,013 (422) 159 (4,419) (2,669) (95) 6 (89) 3,589 29 (715) 0 2,903 145 (2,331) (0.82)
2014 2,615 (181) 84 (1,563) 956 (433) 552 119 (729) 0 (772) 0 (1,501) (426) 1,280 0.41
2015E 2,478 263 79 (3,395) (576) (550) (4) (554) 2,201 0 (818) (617) 766 (363) (625) (0.20)
2016E 2,725 (148) 62 (2,611) 28 (300) 0 (300) 707 0 (867) 432 272 0 (22) (0.01)
2017E 3,328 (911) 68 (1,759) 726 (300) 0 (300) (367) 0 (954) 895 (426) 0 676 0.21
2013 15.5 (3.6) (8.3) 33.6 15.0 14.2 10.1 10.0 21.1
2014 15.8 24.5 18.1 33.9 16.1 15.7 11.3 11.3 19.3
2015E (4.5) (2.8) (5.3) 34.1 16.4 16.0 11.2 10.6 21.9
2016E 4.9 2.6 10.0 33.7 16.0 15.7 11.7 11.7 21.5
2017E 2.3 (0.1) 22.1 33.7 15.6 15.3 14.0 14.0 21.5
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, SAWAD. 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 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
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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.
