AP (Thailand) AWS
AP (Thailand) Buy (16E TP Bt6.9)
Earnings Review
Close Bt7.20
Property Development Aug 15, 2016
Beat forecast/Below forecast/In line
2Q16 net profit declined YoY but rose QoQ Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.890
1.102
KT ZMICO vs. consensus Share data
1.1%
‐3.8%
Reuters / Bloomberg
AP.BK/AP TB
Paid‐up Shares (m)
3,145.90
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
23.00/651.00
Foreign limit / actual (%)
30.00/26.01
52 week High / Low (Bt)
7.70/4.98
Avg. daily T/O (shares 000)
10,062.00
NVDR (%)
13.69
Estimated free float (%)
65.54
Beta
0.88
URL
www.apthai.com
CGR
Anti‐corruption
Level 2 (Declared)
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Maintain Buy with 2016E TP at Bt6.90 and 17E TP at 8.5 We maintain Buy with the 2016E TP for AP at Bt6.9 (8x PER) and the 17E TP will be Bt8.5. AP is still our top pick on projected earnings growth of 9.7% in 2016E and 22.6% in 2017E. AP also provides an annual dividend yield of 4.4% per year. We do not expect the company’s 3Q16E core earnings to excite much as they will gradually improve QoQ until peaking in 4Q16E after four completed condos (Bt8bn, 58% sold) and two JV condos (Bt6.4bn, 96% sold) begin transferring in the period. 2Q16 net profit declined YoY but rose QoQ AP’s 2Q16 core profit and net profit were in line at Bt464mn (‐26.2% YoY, +11.2% QoQ) and Bt526mn (‐18.2% YoY and +15.7% QoQ), respectively. 2Q16 transfers were Bt4.32bn, decreasing 18.2% YoY but rising 6.9% QoQ. Transfers were mainly from low‐rise projects and condo projects that continued transferring from 1Q16 and a new completed condo, Aspire Ladprao 113 (Bt490mn, 91% sold, 31% transferred), in June (from initially planned in 3Q16). The average GPM was in line at 34.2% and the S&A‐to‐revenue ratio was in line at 18.9%. AP also booked extra gain before tax of Bt77mn from the sale of a 49% investment in AP ME (Ratchayothin) to a JV partner, MJRT, a subsidiary of Mitsubishi Estate Corporation. Maintain 2016‐17E forecasts AP’s 1H16 core profit was 35% of our 2016E forecast at Bt2.73bn (+9.7% YoY), which we maintain because the firm will have more condos both from AP and JVs to be completed and transferred in 4Q16E. We also maintain our 2017E core profit at Bt3.34bn (+22.6% YoY). 7M16 presales secured 42.5% of full‐year target AP's 7M16 presales were Bt13.17bn (‐31% YoY) and secured 42.5% of its full‐year target of Bt31bn (+10% YoY). 7M16 presales of low‐rise were Bt7.27bn, increasing 4.7% YoY; meanwhile, condo presales were Bt5.9bn, decreasing 51.6% YoY due to fewer condo project launches with a lower value in 7M16 compared to 7M15. Looking ahead, we expect presales to increase in the remaining five months of the year because AP plans to launch three condos with a total value of Bt15.1bn and 10 low‐rise projects with a total value of Bt10.5bn in 3Q16‐4Q16. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) Normalized PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2013 19,989 2,013 0.70
2014 23,149 2,615 0.83
(8.3)
18.1
0.70
0.83
(3.1)
18.3
0.25 4.90 2013 10.2 10.3 11.7 1.5 3.5 14.4 103.8
0.38 5.04 2014 8.7 8.7 9.9 1.4 5.3 16.5 89.9
2015 22,079 2,623 0.83
2016E 23,203 2,825 0.90
2017E 23,720 3,343 1.06
0.3
7.7
18.3
0.79
0.87
1.06
(4.9)
9.7
22.6
0.30 5.61 2015 8.6 9.1 9.9 1.3 4.2 14.9 80.8
0.31 6.20 2016E 8.0 8.3 10.0 1.2 4.4 14.5 73.9
0.35 6.95 2017E 6.8 6.8 9.7 1.0 4.9 15.3 60.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
2Q15
1Q16
2Q16
% YoY
% QoQ
1H16
% YoY
2016E
% YoY
Revenue from project sales Total revenue Gross profit
5,283 5,402 1,895
4,040 4,172 1,422
4,320 4,430 1,516
(18.2) (18.0) (20.0)
6.9 6.2 6.6
8,360 8,602 2,939
(20.0) (19.0) (19.8)
22,698 23,203 7,830
4.9 5.1 3.9
YTD (% 2016E) 36.8 37.1 37.5
EBITDA
943
654
711
(24.6)
8.7
1,365
(22.4)
3,712
(0.1)
36.8
Interest expense
(89)
(58)
(45)
(49.0)
(22.1)
(103)
(35.0)
(366)
31.0
28.2
Other income
57
12
15
(72.9)
29.7
27
(64.5)
50
(59.9)
54.4
(176)
(125)
(166)
(5.5)
33.2
(291)
(11.7)
(774)
5.6
37.6
17
47
77
361.5
65.4
123
640.5
123
(28)
100.0
Gn (Ls) from affiliates
(55)
(48)
(38)
(30.5)
(21.1)
(86)
24.1
171
(182.4)
34.7
Net profit (loss)
643
455
526
(18.2)
15.7
981
(18.4)
2,825
7.7
34.7
Core net profit (loss)
629
418
464
(26.2)
11.2
882
(25.8)
2,728
9.7
32.3
Reported EPS (THB)
0.20
0.14
0.17
(18.2)
15.7
0.31
(18.4)
0.90
7.7
34.7
Core EPS (THB)
0.20
0.13
0.15
(26.2)
11.2
0.28
(25.8)
0.87
9.7
32.3
Gross margin‐ Project sales (%)
33.8
32.2
32.7
32.5
32.5
Gross margin ‐ overall (%)
35.1
34.1
34.2
34.1
33.7
Income tax Other extraordinary Items
EBITDA margin (%)
17.5
15.7
16.0
15.7
16.0
Net margin (%)
11.9
10.9
11.9
10.9
12.2
Current ratio (x)
3.8
4.0
3.7
3.7
4.6
Interest coverage (x)
10.4
11.0
15.4
12.9
10.0
Debt / equity (x)
1.3
1.1
1.1
1.1
1.0
BVPS (Bt)
5.16
5.76
5.62
5.62
6.20
ROE (%)
17.5
14.1
13.4
13.4
14.5
Source: AP, KT ZMICO Research
Figure 2: Presales
Figure 3: AP’s backlog in 2Q16
Btmn 25,000
2018E 2,146
20,000 15,000 10,000
2017E 2,844
5,000
Total Backlog Bt12,823mn
2016E 7,833
High rise
7M16
7M15
3Q16
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
‐
Low rise
Source: AP, KT ZMICO Research
Source: AP, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 4: JV condo backlog (100% Base)
2016E 3,000
2018E 10,417
JV Condo Backlog Bt20,334mn
Source: AP, KT ZMICO Research
2017E 7,429
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
2015 22,079 (14,545) 7,534 (3,969) 3,715 67 3,648 (280) 166 3,356 (733) 0 172 (207) 2,623 0.83 0.83 2,486 0.79 0.30
2016E 23,203 (15,372) 7,830 (4,229) 3,712 61 3,651 (366) 50 3,599 (774) 0 123 171 2,825 0.90 0.90 2,728 0.87 0.31
2017E 23,720 (15,719) 8,000 (4,414) 3,694 56 3,637 (354) 51 4,259 (916) 0 0 956 3,343 1.06 1.06 3,343 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
2015 421 72 31,938 748 850 36,147 3,980 10,699 18,493 3,146 17,654 36,147
2016E 100 93 33,597 744 976 38,158 3,747 10,774 18,651 3,146 19,507 38,158
2017E 1,308 95 34,489 735 998 40,529 4,150 10,274 18,668 3,146 21,861 40,529
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
2015 2,623 (252) 67 (2,907) (468) (1,051) 2,017 966 278 0 (818) 0 (540) (42) 650 0.21
2016E 2,825 (152) 61 (1,459) 1,274 (300) (4) (304) (159) 0 (944) (189) (1,292) (321) 1,224 0.39
2017E 3,343 (933) 56 (865) 1,601 (300) 0 (300) (97) 0 (989) 992 (94) 1,208 1,551 0.49
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
2015 (4.6) (0.3) 0.3 34.1 16.8 16.5 11.9 11.3 21.8
2016E 5.1 (0.1) 7.7 33.7 16.0 15.7 12.2 11.8 21.5
2017E 2.2 (0.5) 18.3 33.7 15.6 15.3 14.1 14.1 21.5
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, M‐CHAI, CI. KT ZMICO is a co‐underwriter of ALT, EKH, RJH.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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.
Earnings Review
Close Bt7.20
Property Development Aug 15, 2016
Beat forecast/Below forecast/In line
2Q16 net profit declined YoY but rose QoQ Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.890
1.102
KT ZMICO vs. consensus Share data
1.1%
‐3.8%
Reuters / Bloomberg
AP.BK/AP TB
Paid‐up Shares (m)
3,145.90
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
23.00/651.00
Foreign limit / actual (%)
30.00/26.01
52 week High / Low (Bt)
7.70/4.98
Avg. daily T/O (shares 000)
10,062.00
NVDR (%)
13.69
Estimated free float (%)
65.54
Beta
0.88
URL
www.apthai.com
CGR
Anti‐corruption
Level 2 (Declared)
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Maintain Buy with 2016E TP at Bt6.90 and 17E TP at 8.5 We maintain Buy with the 2016E TP for AP at Bt6.9 (8x PER) and the 17E TP will be Bt8.5. AP is still our top pick on projected earnings growth of 9.7% in 2016E and 22.6% in 2017E. AP also provides an annual dividend yield of 4.4% per year. We do not expect the company’s 3Q16E core earnings to excite much as they will gradually improve QoQ until peaking in 4Q16E after four completed condos (Bt8bn, 58% sold) and two JV condos (Bt6.4bn, 96% sold) begin transferring in the period. 2Q16 net profit declined YoY but rose QoQ AP’s 2Q16 core profit and net profit were in line at Bt464mn (‐26.2% YoY, +11.2% QoQ) and Bt526mn (‐18.2% YoY and +15.7% QoQ), respectively. 2Q16 transfers were Bt4.32bn, decreasing 18.2% YoY but rising 6.9% QoQ. Transfers were mainly from low‐rise projects and condo projects that continued transferring from 1Q16 and a new completed condo, Aspire Ladprao 113 (Bt490mn, 91% sold, 31% transferred), in June (from initially planned in 3Q16). The average GPM was in line at 34.2% and the S&A‐to‐revenue ratio was in line at 18.9%. AP also booked extra gain before tax of Bt77mn from the sale of a 49% investment in AP ME (Ratchayothin) to a JV partner, MJRT, a subsidiary of Mitsubishi Estate Corporation. Maintain 2016‐17E forecasts AP’s 1H16 core profit was 35% of our 2016E forecast at Bt2.73bn (+9.7% YoY), which we maintain because the firm will have more condos both from AP and JVs to be completed and transferred in 4Q16E. We also maintain our 2017E core profit at Bt3.34bn (+22.6% YoY). 7M16 presales secured 42.5% of full‐year target AP's 7M16 presales were Bt13.17bn (‐31% YoY) and secured 42.5% of its full‐year target of Bt31bn (+10% YoY). 7M16 presales of low‐rise were Bt7.27bn, increasing 4.7% YoY; meanwhile, condo presales were Bt5.9bn, decreasing 51.6% YoY due to fewer condo project launches with a lower value in 7M16 compared to 7M15. Looking ahead, we expect presales to increase in the remaining five months of the year because AP plans to launch three condos with a total value of Bt15.1bn and 10 low‐rise projects with a total value of Bt10.5bn in 3Q16‐4Q16. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) Normalized PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2013 19,989 2,013 0.70
2014 23,149 2,615 0.83
(8.3)
18.1
0.70
0.83
(3.1)
18.3
0.25 4.90 2013 10.2 10.3 11.7 1.5 3.5 14.4 103.8
0.38 5.04 2014 8.7 8.7 9.9 1.4 5.3 16.5 89.9
2015 22,079 2,623 0.83
2016E 23,203 2,825 0.90
2017E 23,720 3,343 1.06
0.3
7.7
18.3
0.79
0.87
1.06
(4.9)
9.7
22.6
0.30 5.61 2015 8.6 9.1 9.9 1.3 4.2 14.9 80.8
0.31 6.20 2016E 8.0 8.3 10.0 1.2 4.4 14.5 73.9
0.35 6.95 2017E 6.8 6.8 9.7 1.0 4.9 15.3 60.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
2Q15
1Q16
2Q16
% YoY
% QoQ
1H16
% YoY
2016E
% YoY
Revenue from project sales Total revenue Gross profit
5,283 5,402 1,895
4,040 4,172 1,422
4,320 4,430 1,516
(18.2) (18.0) (20.0)
6.9 6.2 6.6
8,360 8,602 2,939
(20.0) (19.0) (19.8)
22,698 23,203 7,830
4.9 5.1 3.9
YTD (% 2016E) 36.8 37.1 37.5
EBITDA
943
654
711
(24.6)
8.7
1,365
(22.4)
3,712
(0.1)
36.8
Interest expense
(89)
(58)
(45)
(49.0)
(22.1)
(103)
(35.0)
(366)
31.0
28.2
Other income
57
12
15
(72.9)
29.7
27
(64.5)
50
(59.9)
54.4
(176)
(125)
(166)
(5.5)
33.2
(291)
(11.7)
(774)
5.6
37.6
17
47
77
361.5
65.4
123
640.5
123
(28)
100.0
Gn (Ls) from affiliates
(55)
(48)
(38)
(30.5)
(21.1)
(86)
24.1
171
(182.4)
34.7
Net profit (loss)
643
455
526
(18.2)
15.7
981
(18.4)
2,825
7.7
34.7
Core net profit (loss)
629
418
464
(26.2)
11.2
882
(25.8)
2,728
9.7
32.3
Reported EPS (THB)
0.20
0.14
0.17
(18.2)
15.7
0.31
(18.4)
0.90
7.7
34.7
Core EPS (THB)
0.20
0.13
0.15
(26.2)
11.2
0.28
(25.8)
0.87
9.7
32.3
Gross margin‐ Project sales (%)
33.8
32.2
32.7
32.5
32.5
Gross margin ‐ overall (%)
35.1
34.1
34.2
34.1
33.7
Income tax Other extraordinary Items
EBITDA margin (%)
17.5
15.7
16.0
15.7
16.0
Net margin (%)
11.9
10.9
11.9
10.9
12.2
Current ratio (x)
3.8
4.0
3.7
3.7
4.6
Interest coverage (x)
10.4
11.0
15.4
12.9
10.0
Debt / equity (x)
1.3
1.1
1.1
1.1
1.0
BVPS (Bt)
5.16
5.76
5.62
5.62
6.20
ROE (%)
17.5
14.1
13.4
13.4
14.5
Source: AP, KT ZMICO Research
Figure 2: Presales
Figure 3: AP’s backlog in 2Q16
Btmn 25,000
2018E 2,146
20,000 15,000 10,000
2017E 2,844
5,000
Total Backlog Bt12,823mn
2016E 7,833
High rise
7M16
7M15
3Q16
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
‐
Low rise
Source: AP, KT ZMICO Research
Source: AP, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 4: JV condo backlog (100% Base)
2016E 3,000
2018E 10,417
JV Condo Backlog Bt20,334mn
Source: AP, KT ZMICO Research
2017E 7,429
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
2015 22,079 (14,545) 7,534 (3,969) 3,715 67 3,648 (280) 166 3,356 (733) 0 172 (207) 2,623 0.83 0.83 2,486 0.79 0.30
2016E 23,203 (15,372) 7,830 (4,229) 3,712 61 3,651 (366) 50 3,599 (774) 0 123 171 2,825 0.90 0.90 2,728 0.87 0.31
2017E 23,720 (15,719) 8,000 (4,414) 3,694 56 3,637 (354) 51 4,259 (916) 0 0 956 3,343 1.06 1.06 3,343 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
2015 421 72 31,938 748 850 36,147 3,980 10,699 18,493 3,146 17,654 36,147
2016E 100 93 33,597 744 976 38,158 3,747 10,774 18,651 3,146 19,507 38,158
2017E 1,308 95 34,489 735 998 40,529 4,150 10,274 18,668 3,146 21,861 40,529
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
2015 2,623 (252) 67 (2,907) (468) (1,051) 2,017 966 278 0 (818) 0 (540) (42) 650 0.21
2016E 2,825 (152) 61 (1,459) 1,274 (300) (4) (304) (159) 0 (944) (189) (1,292) (321) 1,224 0.39
2017E 3,343 (933) 56 (865) 1,601 (300) 0 (300) (97) 0 (989) 992 (94) 1,208 1,551 0.49
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
2015 (4.6) (0.3) 0.3 34.1 16.8 16.5 11.9 11.3 21.8
2016E 5.1 (0.1) 7.7 33.7 16.0 15.7 12.2 11.8 21.5
2017E 2.2 (0.5) 18.3 33.7 15.6 15.3 14.1 14.1 21.5
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, M‐CHAI, CI. KT ZMICO is a co‐underwriter of ALT, EKH, RJH.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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th
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.
