Company Update - Global Alliance Partners
Company Update July 18, 2014
L.P.N. Development
Buy (TP Bt23.40)
Take-up rate of new launches rose in 2Q14
Price Bt21.30
Political stability led to higher presales in 2Q14 compared to 1Q14. The strong presales also resulted in clearer revenue visibility, and we expect 2014E-15E transfers to be 90.7% and 82.6% secured by end-2Q14. 2Q14 earnings are expected to rise slightly as LPN’s finished products are selling well. We upgrade the rating from Sell to Buy with a new TP of Bt23.40 (10.0x 2015E PER). Political stability led to strong presales recovery The take-up rate of new launches shot up from 23.9% in 1Q14 to 45.8% in 2Q14 as the political situation has stabilized, resulting in 2Q14 presales of Bt6.9bn (+117.8% QoQ). The strongest performer was Lumpini Place Barommaratchachonnani (Bt1.7bn, 996 units), which was 100% sold within a month after its launch.
Stock Performance (%)
Absolute
1M
3M
12M
12.69
20.33
-8.19
7.28
10.72
-10.24
Relative to SET Share data
Highly secured revenue streams By the end of 2Q14, our 2014E transfers of Bt13.2bn (-4.7%) should be 90.7% secured by the backlog and 1H14 performance owing to the spike in 2Q14 presales. LPN also has around Bt16.0bn backlog waiting to be realized next year, securing 82.6% of 2015E transfers.
Reuters / Bloomberg
Foreign limit / actual (%)
39.00/31.23
Earnings to rise slightly in 2Q14 We have 2Q14E earnings of Bt374m (-53.2% YoY, +6.7% QoQ) on the back of Bt2.6bn transfers (-37.2% YoY, +10.8% QoQ). Transfers are expected to have risen in 2Q14 despite no new completions because LPN’s completed inventories are selling relatively well.
52 week High / Low (Bt)
24.00/14.00
Upgrade to Buy as the TP is rolled over to 2015E Thanks to 2015E earnings growth of 60.2%, we change our rating on LPN from Sell to Buy as we roll over our TP to next year. The new TP of Bt23.40 is based on 10.0x PER (+0.25SD). After rising slightly in 2Q14, earnings are expected to take off in 2H14 on the back of concentrated transfers (1H14: 37.8% vs. 2H14: 62.2%) and lower launch-related expenses.
LPN.BK/LPN TB
Sector
Property Development
Paid-up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
31.00/978.00
Avg. daily T/O (shares 000)
5,962.00
NVDR (%)
14.78
Estimated free float (%)
82.86
Beta
1.08
URL
www.lpn.co.th
Major Shareholders (04/03/2014) Thai NVDR Co., Ltd.
15.45 %
Chase Nominees Limited 28
6.17 %
Krungsri Dvd Stock LTF
4.59 % FY14
FY15
Consensus EPS (Bt)
1.564
2.178
KT ZMICO vs. consensus
-6.6%
7.4%
Company Profile
Financial and Valuation 2012
2013
2014E
2015E
2016E
Revenues (Btmn)
13,325
14,347
13,742
19,899
21,166
Net profit (Btmn)
2,217
2,329
2,157
3,455
3,534
1.46
1.58
1.46
2.34
2.39
12.85
8.19
-7.37
60.17
2.29
0.76
0.84
0.73
1.17
1.20
The Company and its affiliated companies carry on the business of real estate development aiming to sell and rent the developed projects, as offices and residential condominiums located in the central business district of Bangkok and neighbouring provinces. These offices and residential condominiums initially developed are dominated by high-rise and huge buildings. CGR 2013
FY Ended 31 Dec
Norm. EPS (Bt) Norm. EPS growth Dividend (Bt) BV (Bt)
5.75
6.52
7.04
8.43
9.64
2012
2013
2014E
2015E
2016E
Norm. PER (x)
14.6
13.5
14.6
9.1
8.9
EV/EBITDA (x)
11.8
12.1
12.6
7.7
0.0
PBV (x)
3.71
3.27
3.03
2.53
2.21
Dividend yield (%)
3.57
3.94
3.43
5.50
5.62
28.21
25.72
21.55
30.27
26.51
0.20
0.43
0.26
0.14
0.13
FY Ended 31 Dec
ROE (%) Net gearing (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
Wasu Mattanapotchanart Analyst, no. 44357 [email protected] 66 (0) 2624-6268
page 1 of 6
Figure 1: Quarterly earnings preview Profit and Loss (Btmn) FY Ended 31 Dec
2Q13
1Q14
2Q14E
% YoY
% QoQ
6M14E
% YoY
2014E
% YoY
YTD (% 2012E)
Revenue from project sales
4,182
2,372
2,628
(37.2)
10.8
5,000
(23.6)
13,225
(4.7)
37.8
Total revenue
4,302
2,502
2,758
(35.9)
10.2
5,261
(22.4)
13,742
(4.2)
38.3
Gross profit
1,489
811
894
(40.0)
10.2
1,704
(26.3)
4,277
(8.8)
39.8
EBITDA
1,024
455
427
(58.3)
(6.2)
882
(39.9)
2,697
(8.5)
32.7
(5)
(9)
(2)
(65.4)
(80.2)
(11)
94.8
(15)
26.3
75.1
2
1
5
94.1
540.2
5
(24.3)
15
(72.2)
36.6
(220)
(94)
(94)
(57.4)
(0.7)
(188)
(39.4)
(539)
(13.8)
34.8
Net profit (loss)
800
351
374
(53.2)
6.7
725
(37.5)
2,157
(7.4)
33.6
Normalized profit (loss)
800
351
374
(53.2)
6.7
725
(37.5)
2,157
(7.4)
33.6
Reported EPS (THB)
0.54
0.24
0.23
(57.7)
(3.5)
0.47
(40.6)
1.46
(7.4)
31.9
Gross margin - residential (%)
34.6
32.4
32.4
32.4
31.2
Gross margin - overall (%)
34.6
32.4
32.4
32.4
31.1
EBITDA margin (%)
23.8
18.2
15.5
16.8
19.6
Net margin (%)
18.6
14.0
13.6
13.8
15.7
249.6
81.8
181.5
Interest expense Other income Income tax
Current ratio (x)
2.2
1.8
192.7
48.5
Debt / equity (x)
0.5
0.7
BVPS (Bt)
6.0
6.2
ROE (%)
36.1
15.4
Interest coverage (x)
Source: LPN, KT ZMICO Research Figure 2: Major assumptions
Revenue Residential sales Rent Property management Total
2011
2012
2013
2014E
2015E
2016E
12,035
12,950
13,871
13,225
19,358
20,600
41
40
43
43
43
43
259
335
432
475
498
523
12,335
13,325
14,347
13,742
19,899
Growth YoY (%)
21,166
Residential sales
24.4
7.6
7.1
‐4.7
46.4
6.4
Rent
‐8.5
‐2.0
7.3
0.0
0.0
0.0
Property management
18.2
29.0
29.1
9.8
5.0
5.0
Total
24.1
8.0
7.7
‐4.2
44.8
6.4
Gross margin (%)
Residential sales
33.2
32.4
32.7
31.1
33.2
32.4
Rent
41.8
43.3
49.2
42.5
42.5
42.5
Property management
30.0
27.2
25.6
27.5
27.5
27.5
Total
33.2
32.4
32.7
31.1
33.2
NPM
15.5
16.6
16.2
15.7
32.4
17.4
16.7
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 2 of 6
Figure 3: Quarterly presales
Source: LPN, KT ZMICO Research Figure 4: Project launches in 1H14
Lumpini Ville Onnut 46
Unit
Value (Btm)
Launch
% Sold as of 30 Jun 14
1,450
1,400
25-Jan
37.0%
Lumpini Ville Onnut-Pattanakarn
1,600
1,800
25-Jan
35.0%
Lumpini Seaview Jomtien
1,150
1,280
2Q14
30.0%
Lumpini Borommaratchachonnani
900
1,660
2Q14
100.0%
Lumpini Ville Nawamin-Inthrarak
1,600
2,000
2Q14
35.0%
Lumpini Park Petchakasem 98
2,600
3,350
2Q14
34.0%
Total Source: LPN, KT ZMICO Research
9,300
11,490
Figure 5: Launch schedule 2014
Source: LPN, KT ZMICO Research
Figure 6: Completion schedule 2014
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 3 of 6
Figure 7: PER band and sensitivity of market prices based on PER at different standard deviations Implied market price Upside/Downside PER (x)
(Bt)
(%)
+1.5SD
14.1
33.0
55.0
+1.0SD
12.5
29.2
37.1
+0.5SD
10.8
25.4
19.1
+0.25SD
10.0
23.5
10.2
Average
9.2
21.6
1.2
-0.5SD
7.6
17.7
-16.7
-1SD
5.9
13.9
-34.7
2015E EPS
Bt2.34
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 4 of 6
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)
2011 12,335 (8,237) 4,098 (1,457) 2,674 33 2,641 (3) 29 2,667 (830)
2012 13,325 (9,008) 4,317 (1,547) 2,805 35 2,770 (10) 37 2,797 (700)
2013 14,347 (9,657) 4,690 (1,779) 2,948 37 2,912 (12) 54 2,954 (625)
2014E 13,742 (9,465) 4,277 (1,619) 2,697 40 2,658 (15) 53 2,696 (539)
2015E 19,899 (13,288) 6,612 (2,356) 4,308 51 4,256 (15) 78 4,318 (864)
2016E 21,166 (14,309) 6,857 (2,506) 4,484 133 4,351 (16) 82 4,417 (883)
8 73 1,917 1.30 1.30 1,907 1.29 0.65
52 68 2,217 1.50 1.50 2,152 1.46 0.76
0 0 2,329 1.58 1.58 2,329 1.58 0.84
0 0 2,157 1.46 1.46 2,157 1.46 0.73
0 0 3,455 2.34 2.34 3,455 2.34 1.17
0 0 3,534 2.39 2.39 3,534 2.39 1.20
2011 295 198 7,408 237 1,560 9,698 600 11 2,465 1,476 7,233 9,698
2012 1,168 222 10,899 238 1,495 14,021 1,837 1,008 5,539 1,476 8,482 14,021
2013 1,192 130 14,703 238 1,158 17,420 5,148 140 7,794 1,476 9,626 17,420
2014E 553 224 14,072 193 1,102 16,145 2,321 915 5,759 1,476 10,385 16,144
2015E 1,638 327 15,933 340 1,157 19,395 2,507 915 6,956 1,476 12,439 19,395
2011 1,917 24 33 (584) 1,277 (101) 24 (76) (1,157)
2012 2,217 (42) 35 (2,812) (689) (16) 336 320 2,223
2013 2,329 54 37 (3,212) (1,238) (89) 77 (12) 2,439
2014E 2,157 0 40 592 2,790 19 0 19 (2,053)
2015E 3,455 0 51 (1,023) 2,485 (184) 0 (184) 186
2016E 3,534 0 133 (722) 2,947 (1,279) 0 (1,279) 94
(871)
(981)
(1,165)
(1,395)
(1,403)
(1,747)
(2,027) (827)
1,242 873
1,274 24
(3,448) (638)
(1,217) 1,085
(1,653) 14
2,071
212
(167)
3,361
3,179
2,565
1.40
0.14
(0.11)
2.28
2.15
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
2016E 1,652 349 16,872 1,501 1,157 21,531 2,601 915 7,304 1,476 14,228 21,531
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)
1.74
PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2011 24.1 16.8 17.1 33.2 21.7 21.4 15.5 15.5 (30.2)
2012 8.0 4.9 15.6 32.4 21.1 20.8 16.6 16.2 (24.0)
2013 7.7 5.1 5.0 32.7 20.6 20.3 16.2 16.2 (21.2)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
2014E (4.2) (8.5) (7.4) 31.1 19.6 19.3 15.7 15.7 (20.0)
2015E 44.8 59.7 60.2 33.2 21.6 21.4 17.4 17.4 (20.0)
page 5 of 6
2016E 6.4 4.1 2.3 32.4 21.2 20.6 16.7 16.7 (20.0)
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 TRADING BUY: Expecting positive total returns of 10% or more over the next 3 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.
SELL INTO STRENGTH: Expecting total returns between -10% to +10% over the next 12 month; share price has largely priced in fundamentals
The industry, as defined by the NEUTRAL: analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months.
SELL: Expecting negative total returns of 10% or more 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 6 of 6
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
L.P.N. Development
Buy (TP Bt23.40)
Take-up rate of new launches rose in 2Q14
Price Bt21.30
Political stability led to higher presales in 2Q14 compared to 1Q14. The strong presales also resulted in clearer revenue visibility, and we expect 2014E-15E transfers to be 90.7% and 82.6% secured by end-2Q14. 2Q14 earnings are expected to rise slightly as LPN’s finished products are selling well. We upgrade the rating from Sell to Buy with a new TP of Bt23.40 (10.0x 2015E PER). Political stability led to strong presales recovery The take-up rate of new launches shot up from 23.9% in 1Q14 to 45.8% in 2Q14 as the political situation has stabilized, resulting in 2Q14 presales of Bt6.9bn (+117.8% QoQ). The strongest performer was Lumpini Place Barommaratchachonnani (Bt1.7bn, 996 units), which was 100% sold within a month after its launch.
Stock Performance (%)
Absolute
1M
3M
12M
12.69
20.33
-8.19
7.28
10.72
-10.24
Relative to SET Share data
Highly secured revenue streams By the end of 2Q14, our 2014E transfers of Bt13.2bn (-4.7%) should be 90.7% secured by the backlog and 1H14 performance owing to the spike in 2Q14 presales. LPN also has around Bt16.0bn backlog waiting to be realized next year, securing 82.6% of 2015E transfers.
Reuters / Bloomberg
Foreign limit / actual (%)
39.00/31.23
Earnings to rise slightly in 2Q14 We have 2Q14E earnings of Bt374m (-53.2% YoY, +6.7% QoQ) on the back of Bt2.6bn transfers (-37.2% YoY, +10.8% QoQ). Transfers are expected to have risen in 2Q14 despite no new completions because LPN’s completed inventories are selling relatively well.
52 week High / Low (Bt)
24.00/14.00
Upgrade to Buy as the TP is rolled over to 2015E Thanks to 2015E earnings growth of 60.2%, we change our rating on LPN from Sell to Buy as we roll over our TP to next year. The new TP of Bt23.40 is based on 10.0x PER (+0.25SD). After rising slightly in 2Q14, earnings are expected to take off in 2H14 on the back of concentrated transfers (1H14: 37.8% vs. 2H14: 62.2%) and lower launch-related expenses.
LPN.BK/LPN TB
Sector
Property Development
Paid-up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
31.00/978.00
Avg. daily T/O (shares 000)
5,962.00
NVDR (%)
14.78
Estimated free float (%)
82.86
Beta
1.08
URL
www.lpn.co.th
Major Shareholders (04/03/2014) Thai NVDR Co., Ltd.
15.45 %
Chase Nominees Limited 28
6.17 %
Krungsri Dvd Stock LTF
4.59 % FY14
FY15
Consensus EPS (Bt)
1.564
2.178
KT ZMICO vs. consensus
-6.6%
7.4%
Company Profile
Financial and Valuation 2012
2013
2014E
2015E
2016E
Revenues (Btmn)
13,325
14,347
13,742
19,899
21,166
Net profit (Btmn)
2,217
2,329
2,157
3,455
3,534
1.46
1.58
1.46
2.34
2.39
12.85
8.19
-7.37
60.17
2.29
0.76
0.84
0.73
1.17
1.20
The Company and its affiliated companies carry on the business of real estate development aiming to sell and rent the developed projects, as offices and residential condominiums located in the central business district of Bangkok and neighbouring provinces. These offices and residential condominiums initially developed are dominated by high-rise and huge buildings. CGR 2013
FY Ended 31 Dec
Norm. EPS (Bt) Norm. EPS growth Dividend (Bt) BV (Bt)
5.75
6.52
7.04
8.43
9.64
2012
2013
2014E
2015E
2016E
Norm. PER (x)
14.6
13.5
14.6
9.1
8.9
EV/EBITDA (x)
11.8
12.1
12.6
7.7
0.0
PBV (x)
3.71
3.27
3.03
2.53
2.21
Dividend yield (%)
3.57
3.94
3.43
5.50
5.62
28.21
25.72
21.55
30.27
26.51
0.20
0.43
0.26
0.14
0.13
FY Ended 31 Dec
ROE (%) Net gearing (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
Wasu Mattanapotchanart Analyst, no. 44357 [email protected] 66 (0) 2624-6268
page 1 of 6
Figure 1: Quarterly earnings preview Profit and Loss (Btmn) FY Ended 31 Dec
2Q13
1Q14
2Q14E
% YoY
% QoQ
6M14E
% YoY
2014E
% YoY
YTD (% 2012E)
Revenue from project sales
4,182
2,372
2,628
(37.2)
10.8
5,000
(23.6)
13,225
(4.7)
37.8
Total revenue
4,302
2,502
2,758
(35.9)
10.2
5,261
(22.4)
13,742
(4.2)
38.3
Gross profit
1,489
811
894
(40.0)
10.2
1,704
(26.3)
4,277
(8.8)
39.8
EBITDA
1,024
455
427
(58.3)
(6.2)
882
(39.9)
2,697
(8.5)
32.7
(5)
(9)
(2)
(65.4)
(80.2)
(11)
94.8
(15)
26.3
75.1
2
1
5
94.1
540.2
5
(24.3)
15
(72.2)
36.6
(220)
(94)
(94)
(57.4)
(0.7)
(188)
(39.4)
(539)
(13.8)
34.8
Net profit (loss)
800
351
374
(53.2)
6.7
725
(37.5)
2,157
(7.4)
33.6
Normalized profit (loss)
800
351
374
(53.2)
6.7
725
(37.5)
2,157
(7.4)
33.6
Reported EPS (THB)
0.54
0.24
0.23
(57.7)
(3.5)
0.47
(40.6)
1.46
(7.4)
31.9
Gross margin - residential (%)
34.6
32.4
32.4
32.4
31.2
Gross margin - overall (%)
34.6
32.4
32.4
32.4
31.1
EBITDA margin (%)
23.8
18.2
15.5
16.8
19.6
Net margin (%)
18.6
14.0
13.6
13.8
15.7
249.6
81.8
181.5
Interest expense Other income Income tax
Current ratio (x)
2.2
1.8
192.7
48.5
Debt / equity (x)
0.5
0.7
BVPS (Bt)
6.0
6.2
ROE (%)
36.1
15.4
Interest coverage (x)
Source: LPN, KT ZMICO Research Figure 2: Major assumptions
Revenue Residential sales Rent Property management Total
2011
2012
2013
2014E
2015E
2016E
12,035
12,950
13,871
13,225
19,358
20,600
41
40
43
43
43
43
259
335
432
475
498
523
12,335
13,325
14,347
13,742
19,899
Growth YoY (%)
21,166
Residential sales
24.4
7.6
7.1
‐4.7
46.4
6.4
Rent
‐8.5
‐2.0
7.3
0.0
0.0
0.0
Property management
18.2
29.0
29.1
9.8
5.0
5.0
Total
24.1
8.0
7.7
‐4.2
44.8
6.4
Gross margin (%)
Residential sales
33.2
32.4
32.7
31.1
33.2
32.4
Rent
41.8
43.3
49.2
42.5
42.5
42.5
Property management
30.0
27.2
25.6
27.5
27.5
27.5
Total
33.2
32.4
32.7
31.1
33.2
NPM
15.5
16.6
16.2
15.7
32.4
17.4
16.7
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 2 of 6
Figure 3: Quarterly presales
Source: LPN, KT ZMICO Research Figure 4: Project launches in 1H14
Lumpini Ville Onnut 46
Unit
Value (Btm)
Launch
% Sold as of 30 Jun 14
1,450
1,400
25-Jan
37.0%
Lumpini Ville Onnut-Pattanakarn
1,600
1,800
25-Jan
35.0%
Lumpini Seaview Jomtien
1,150
1,280
2Q14
30.0%
Lumpini Borommaratchachonnani
900
1,660
2Q14
100.0%
Lumpini Ville Nawamin-Inthrarak
1,600
2,000
2Q14
35.0%
Lumpini Park Petchakasem 98
2,600
3,350
2Q14
34.0%
Total Source: LPN, KT ZMICO Research
9,300
11,490
Figure 5: Launch schedule 2014
Source: LPN, KT ZMICO Research
Figure 6: Completion schedule 2014
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 3 of 6
Figure 7: PER band and sensitivity of market prices based on PER at different standard deviations Implied market price Upside/Downside PER (x)
(Bt)
(%)
+1.5SD
14.1
33.0
55.0
+1.0SD
12.5
29.2
37.1
+0.5SD
10.8
25.4
19.1
+0.25SD
10.0
23.5
10.2
Average
9.2
21.6
1.2
-0.5SD
7.6
17.7
-16.7
-1SD
5.9
13.9
-34.7
2015E EPS
Bt2.34
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 4 of 6
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)
2011 12,335 (8,237) 4,098 (1,457) 2,674 33 2,641 (3) 29 2,667 (830)
2012 13,325 (9,008) 4,317 (1,547) 2,805 35 2,770 (10) 37 2,797 (700)
2013 14,347 (9,657) 4,690 (1,779) 2,948 37 2,912 (12) 54 2,954 (625)
2014E 13,742 (9,465) 4,277 (1,619) 2,697 40 2,658 (15) 53 2,696 (539)
2015E 19,899 (13,288) 6,612 (2,356) 4,308 51 4,256 (15) 78 4,318 (864)
2016E 21,166 (14,309) 6,857 (2,506) 4,484 133 4,351 (16) 82 4,417 (883)
8 73 1,917 1.30 1.30 1,907 1.29 0.65
52 68 2,217 1.50 1.50 2,152 1.46 0.76
0 0 2,329 1.58 1.58 2,329 1.58 0.84
0 0 2,157 1.46 1.46 2,157 1.46 0.73
0 0 3,455 2.34 2.34 3,455 2.34 1.17
0 0 3,534 2.39 2.39 3,534 2.39 1.20
2011 295 198 7,408 237 1,560 9,698 600 11 2,465 1,476 7,233 9,698
2012 1,168 222 10,899 238 1,495 14,021 1,837 1,008 5,539 1,476 8,482 14,021
2013 1,192 130 14,703 238 1,158 17,420 5,148 140 7,794 1,476 9,626 17,420
2014E 553 224 14,072 193 1,102 16,145 2,321 915 5,759 1,476 10,385 16,144
2015E 1,638 327 15,933 340 1,157 19,395 2,507 915 6,956 1,476 12,439 19,395
2011 1,917 24 33 (584) 1,277 (101) 24 (76) (1,157)
2012 2,217 (42) 35 (2,812) (689) (16) 336 320 2,223
2013 2,329 54 37 (3,212) (1,238) (89) 77 (12) 2,439
2014E 2,157 0 40 592 2,790 19 0 19 (2,053)
2015E 3,455 0 51 (1,023) 2,485 (184) 0 (184) 186
2016E 3,534 0 133 (722) 2,947 (1,279) 0 (1,279) 94
(871)
(981)
(1,165)
(1,395)
(1,403)
(1,747)
(2,027) (827)
1,242 873
1,274 24
(3,448) (638)
(1,217) 1,085
(1,653) 14
2,071
212
(167)
3,361
3,179
2,565
1.40
0.14
(0.11)
2.28
2.15
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
2016E 1,652 349 16,872 1,501 1,157 21,531 2,601 915 7,304 1,476 14,228 21,531
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)
1.74
PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2011 24.1 16.8 17.1 33.2 21.7 21.4 15.5 15.5 (30.2)
2012 8.0 4.9 15.6 32.4 21.1 20.8 16.6 16.2 (24.0)
2013 7.7 5.1 5.0 32.7 20.6 20.3 16.2 16.2 (21.2)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
2014E (4.2) (8.5) (7.4) 31.1 19.6 19.3 15.7 15.7 (20.0)
2015E 44.8 59.7 60.2 33.2 21.6 21.4 17.4 17.4 (20.0)
page 5 of 6
2016E 6.4 4.1 2.3 32.4 21.2 20.6 16.7 16.7 (20.0)
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 TRADING BUY: Expecting positive total returns of 10% or more over the next 3 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.
SELL INTO STRENGTH: Expecting total returns between -10% to +10% over the next 12 month; share price has largely priced in fundamentals
The industry, as defined by the NEUTRAL: analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months.
SELL: Expecting negative total returns of 10% or more 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 6 of 6
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
