AP
Company Update May 16, 2014
AP (Thailand)
Sell Into Strength (TP Bt5.36)
Solid forecasts but share price fully valued
Price Bt5.20
We raise 2014E net profit by 0.8% while cutting the 2015E bottom line by 0.7% as we adjust the share of loss from the JV closer to the company’s guidance. The company will be much more active in launching projects in 2Q14, and this should bode well for presales during the period. One potential upside is that the company might be able to control costs better than we expect. Maintain Sell Into Strength with a new TP of 5.36 as the share is fully valued. Fine-tuning earnings in 2014E-15E We raise 2014E net profit by 0.8% as the forecasted share of loss from the JV is reduced from Bt120m to Bt100m, based on AP’s guidance of Bt80m. On the other hand, the 2015E earnings are reduced by 0.7% as we raise the share of loss from the JV from Bt60m to Bt80m. Much more active in launching projects in 2Q14 AP launched two low-rise projects worth a combined Bt1.7bn in 1Q14. In 2Q14, it plans to launch Bt14.1bn worth of projects, of which Bt7.0bn will be low-rise properties. The high-rise portion of Bt7.05bn was exclusively launched last weekend under the JV with Mitsubishi Estate, and the three condos were quite well received with a combined take-up rate of 29.1%. The projects were officially launched yesterday at Siam Paragon. Potential upside: better-than-expected cost control With tighter control on marketing and promotional expenses, AP aims to control SG&A expenses at Bt4.0bn or 19.0% of its targeted Bt21.0bn transfers. We have SG&A at Bt4.1bn, and the reduction to the company’s goal of Bt4.0bn would lead to a 4.3% upgrade to our 2014E earnings. Sell Into Strength with new TP of Bt5.36 We have a new TP of Bt5.36 (8.0x PER) as a result of the upward revision to the 2014E earnings. Although we are confident in our 2014E transfers (79.5% secured) and earnings, we believe that the share is already fully valued. Financial and Valuation
Stock Performance (%) 1M
3M
12M
Absolute
-9.57
2.97
-41.25
Relative to SET
-8.69
-1.67
-31.31
Share data Reuters / Bloomberg Sector
AP.BK/AP TB Property Development
Paid-up Shares (m)
2,859.92
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
15.00/458.00
Foreign limit / actual (%)
30.00/21.56
52 week High / Low (Bt)
9.05/4.12
Avg. daily T/O (shares 000)
14,586.00
NVDR (%)
11.79
Estimated free float (%)
67.47
Beta
1.57
Major Shareholders (14/03/2014) Mr. Anupong Asavapokin
23.24 %
Thai NVDR Co., Ltd.
12.43 %
Mr. Pichet Vitsawasupakorn
6.69 % FY14
Consensus EPS (Bt) KT ZMICO vs. consensus
FY15
0.746
0.875
-10.2%
-10.9%
Company Profile
FY Ended 31 Dec Revenues (Btm) Net profit (Btm) EPS (Bt) Norm. EPS Norm. EPS growth (%) Dividend (Bt) BV (Bt)
2011 13,639 1,551 0.55 0.55 -28.34 0.18 3.78
2012 17,310 2,186 0.77 0.74 34.51 0.25 4.47
2013 19,989 2,013 0.70 0.70 -4.93 0.25 4.90
2014E 20,479 1,918 0.67 0.67 -4.64 0.22 5.32
2015E 24,071 2,238 0.78 0.78 16.69 0.26 5.88
FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2011 9.5 10.6 1.37 3.47 15.38 1.29
2012 7.0 8.6 1.16 4.85 18.73 0.91
2013 7.4 10.0 1.06 4.81 15.09 1.04
2014E 7.8 11.5 0.98 4.22 13.13 1.21
2015E 6.6 10.3 0.88 4.93 13.97 1.14
Real Estate CGR 2013
Wasu Mattanapotchanart Analyst, no. 44357 [email protected] 66 (0) 2624-6268
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 1 of 5
Figure 1: Quarterly earnings result Profit and Loss (Btmn) FY Ended 31 Dec
1Q13
4Q13
1Q14
% YoY
% QoQ
2014E
% YoY
YTD (% 2014E)
Revenue from project sales
2819
8377
3481
23.5
(58.4)
20345
2.5
17.1
Total revenue
2,848
8,410
3,523
23.7
(58.1)
20,479
2.5
17.2
965
2,834
1,159
20.0
(59.1)
6,880
1.9
16.8
EBITDA
356
1,310
434
22.1
(66.9)
2,892
(1.4)
15.0
Interest expense
(50)
(84)
(84)
66.4
(0.0)
(364)
24.3
23.1
17
21
15
(15.1)
(31.4)
58
0.0
25.3
(59)
(276)
(67)
14.3
(75.7)
(479)
(11.0)
14.0
Forex gain (loss)
0
0
0
n/a
n/a
0
n/a
n/a
Other extraordinary Items
0
5
0
n/a
(100.0)
0
(100.0)
n/a
Gross profit
Other income Income tax
Gn (Ls) from affiliates Net profit (loss)
0
(1)
(9)
n/a
612.1
(100)
7,474.9
9.4
223
933
260
16.6
(72.2)
1,918
(4.7)
13.5
Normalized profit (loss)
223
929
260
16.6
(72.1)
1,918
(4.6)
13.5
Reported EPS (THB) Gross margin - residential (%)
0.08 32.4
0.33 33.4
0.09 32.4
16.5
(72.1)
0.67 33.2
(4.8)
13.6
EBITDA margin (%)
12.5
15.6
12.3
14.1
Net margin (%)
7.9
11.1
7.5
9.4
Current ratio (x)
3.0
3.4
3.2
3.7
Interest coverage (x)
6.2
15.1
4.8
7.7
Debt / equity (x)
0.8
1.1
1.2
1.3
BVPS (Bt)
4.5
4.9
5.0
5.3
ROE (%)
6.9
26.6
7.3
13.1
Source: AP, KT Zmico Research
AP reported Bt260m net profit (Bt0.091 per share) in 1Q14 The profit grew 16.6% YoY on the back of a 23.7% YoY increase in revenue to Bt3.52bn. 1Q14 transfers came in at Bt3.48bn (+23.5% YoY, -58.4% QoQ), of which 54% came from SDH and TH, while 46% came from condos. The 1Q14 bottom line was 4.7% higher than our forecast and 5.2% lower than the consensus. The difference between the actual result and our forecast was brought about by lower-than-expected SG&A to revenue of 21.4% (1Q14E: 22.9%). Figure 2: New CD launches under JV in 2Q14
Project value (Btm)
No. of units
Unit sold as of 14 May 14* (%)
Official Launch date
Transfer starts
Rhythm Sukhumvit 36
2,850
496
50%
15‐18 May 14
2Q17
Aspire Ratchada‐Wongsawang
2,800
1232
19%
15‐18 May 14
4Q17
Rhythm Asoke II
1,500
346
35%
15‐18 May 14
4Q17
Total
7,150
2074
29%
*from exclusive launch Source: AP, KT ZMICO Research Figure 3: Old projects that face technical issues
Project value (Btm)
No. of units
Unit sold as of 31 Mar 14 (%)
Re‐launch date
Transfer starts
Rhythm Sathorn
4,400
910
47%
3Q14
4Q14
Aspire Ngamwongwan
2,200
1,458
16%
likely 2015
3Q15
Galerie rue de 39
3,200
88
0%
likely 2015
2016
Source: AP, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 2 of 5
Figure 4: Backlog distribution as of 5 May 2014
Source: AP, KT ZMICO Research Figure 5: 2014 Project launches
Source: AP, KT ZMICO Research Figure 6: New CD completions in 2014
Life Ratchadapisek Aspire Rama 9 Rhythm Sathorn
Project Value 3,500 2,400 4,400
No. of units 837 663 910
Units sold (%) 74.0% 93.0% 71.0%
Launch Date 3Q11 1Q12 3Q10
Transfer starts 2Q14 3Q14 4Q14
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)
2011 13,639 (8,434) 5,205 (2,695) 2,706 (196) 2,510 (191) 73 2,392 (844) 0 4 0 1,551 0.55 0.54 1,549 0.55 0.18
2012 17,310 (11,274) 6,036 (3,128) 3,061 (152) 2,908 (213) 65 2,760 (691) 0 117 0 2,186 0.77 0.76 2,097 0.74 0.25
2013 19,989 (13,238) 6,750 (3,976) 2,933 (159) 2,774 (293) 67 2,549 (539) 0 5 (1) 2,013 0.70 0.70 2,010 0.70 0.25
2014E 20,479 (13,600) 6,880 (4,094) 2,892 (106) 2,786 (364) 75 2,497 (479) 0 0 (100) 1,918 0.67 0.67 1,918 0.67 0.22
2015E 24,071 (16,061) 8,010 (4,813) 3,304 (106) 3,197 (395) 75 2,878 (560) 0 0 (80) 2,238 0.78 0.78 2,238 0.78 0.26
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
2011 438 69 26,616 143 2,109 29,375 5,922 8,302 14,224 2,822 10,661 29,375
2012 744 108 26,490 127 2,004 29,472 4,209 8,073 12,282 2,848 12,680 29,472
2013 889 110 30,784 129 2,497 34,410 5,059 10,371 15,430 2,860 14,007 34,410
2014E 818 122 35,639 128 2,976 39,683 5,701 13,482 19,183 2,860 15,210 39,683
2015E 1,644 140 38,835 118 3,086 43,823 5,325 15,505 20,829 2,860 16,798 43,823
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
2011 1,551 4 196 (4,455) (3,090) (69) 61 (9) 3,578 25 (422) 0 3,181 355
2012 2,186 (103) 152 724 2,492 (50) 266 216 (1,959) 66 (509) 1 (2,400) 438
2013 2,013 (5) 159 (4,419) (2,669) (69) (20) (89) 3,589 29 (715) 2 2,905 744
2014E 1,918 0 106 (5,062) (3,055) (56) 2 (54) 3,753 0 (715) 3 3,041 889
2015E 2,238 0 106 (2,459) (132) (56) (4) (60) 1,646 0 (628) 4 1,022 818
Free cash flow
(1,749)
3,991
(1,540)
(2,289)
745
(0.62)
1.41
(0.54)
(0.80)
0.26
2011 (1.5) (17.8) (30.6) 37.7 19.8 18.5 11.5 11.4 (35.2)
2012 26.9 13.1 40.0 34.4 17.7 16.9 12.7 12.2 (24.0)
2013 15.5 (4.2) (8.6) 33.3 14.7 14.0 10.1 10.1 (21.1)
2014E 2.5 (1.4) (4.8) 33.2 14.1 13.7 9.4 9.4 (20.0)
2015E 17.5 14.2 16.7 32.9 13.7 13.4 9.3 9.3 (20.0)
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 (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 4 of 5
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 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.
AP (Thailand)
Sell Into Strength (TP Bt5.36)
Solid forecasts but share price fully valued
Price Bt5.20
We raise 2014E net profit by 0.8% while cutting the 2015E bottom line by 0.7% as we adjust the share of loss from the JV closer to the company’s guidance. The company will be much more active in launching projects in 2Q14, and this should bode well for presales during the period. One potential upside is that the company might be able to control costs better than we expect. Maintain Sell Into Strength with a new TP of 5.36 as the share is fully valued. Fine-tuning earnings in 2014E-15E We raise 2014E net profit by 0.8% as the forecasted share of loss from the JV is reduced from Bt120m to Bt100m, based on AP’s guidance of Bt80m. On the other hand, the 2015E earnings are reduced by 0.7% as we raise the share of loss from the JV from Bt60m to Bt80m. Much more active in launching projects in 2Q14 AP launched two low-rise projects worth a combined Bt1.7bn in 1Q14. In 2Q14, it plans to launch Bt14.1bn worth of projects, of which Bt7.0bn will be low-rise properties. The high-rise portion of Bt7.05bn was exclusively launched last weekend under the JV with Mitsubishi Estate, and the three condos were quite well received with a combined take-up rate of 29.1%. The projects were officially launched yesterday at Siam Paragon. Potential upside: better-than-expected cost control With tighter control on marketing and promotional expenses, AP aims to control SG&A expenses at Bt4.0bn or 19.0% of its targeted Bt21.0bn transfers. We have SG&A at Bt4.1bn, and the reduction to the company’s goal of Bt4.0bn would lead to a 4.3% upgrade to our 2014E earnings. Sell Into Strength with new TP of Bt5.36 We have a new TP of Bt5.36 (8.0x PER) as a result of the upward revision to the 2014E earnings. Although we are confident in our 2014E transfers (79.5% secured) and earnings, we believe that the share is already fully valued. Financial and Valuation
Stock Performance (%) 1M
3M
12M
Absolute
-9.57
2.97
-41.25
Relative to SET
-8.69
-1.67
-31.31
Share data Reuters / Bloomberg Sector
AP.BK/AP TB Property Development
Paid-up Shares (m)
2,859.92
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
15.00/458.00
Foreign limit / actual (%)
30.00/21.56
52 week High / Low (Bt)
9.05/4.12
Avg. daily T/O (shares 000)
14,586.00
NVDR (%)
11.79
Estimated free float (%)
67.47
Beta
1.57
Major Shareholders (14/03/2014) Mr. Anupong Asavapokin
23.24 %
Thai NVDR Co., Ltd.
12.43 %
Mr. Pichet Vitsawasupakorn
6.69 % FY14
Consensus EPS (Bt) KT ZMICO vs. consensus
FY15
0.746
0.875
-10.2%
-10.9%
Company Profile
FY Ended 31 Dec Revenues (Btm) Net profit (Btm) EPS (Bt) Norm. EPS Norm. EPS growth (%) Dividend (Bt) BV (Bt)
2011 13,639 1,551 0.55 0.55 -28.34 0.18 3.78
2012 17,310 2,186 0.77 0.74 34.51 0.25 4.47
2013 19,989 2,013 0.70 0.70 -4.93 0.25 4.90
2014E 20,479 1,918 0.67 0.67 -4.64 0.22 5.32
2015E 24,071 2,238 0.78 0.78 16.69 0.26 5.88
FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2011 9.5 10.6 1.37 3.47 15.38 1.29
2012 7.0 8.6 1.16 4.85 18.73 0.91
2013 7.4 10.0 1.06 4.81 15.09 1.04
2014E 7.8 11.5 0.98 4.22 13.13 1.21
2015E 6.6 10.3 0.88 4.93 13.97 1.14
Real Estate CGR 2013
Wasu Mattanapotchanart Analyst, no. 44357 [email protected] 66 (0) 2624-6268
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 1 of 5
Figure 1: Quarterly earnings result Profit and Loss (Btmn) FY Ended 31 Dec
1Q13
4Q13
1Q14
% YoY
% QoQ
2014E
% YoY
YTD (% 2014E)
Revenue from project sales
2819
8377
3481
23.5
(58.4)
20345
2.5
17.1
Total revenue
2,848
8,410
3,523
23.7
(58.1)
20,479
2.5
17.2
965
2,834
1,159
20.0
(59.1)
6,880
1.9
16.8
EBITDA
356
1,310
434
22.1
(66.9)
2,892
(1.4)
15.0
Interest expense
(50)
(84)
(84)
66.4
(0.0)
(364)
24.3
23.1
17
21
15
(15.1)
(31.4)
58
0.0
25.3
(59)
(276)
(67)
14.3
(75.7)
(479)
(11.0)
14.0
Forex gain (loss)
0
0
0
n/a
n/a
0
n/a
n/a
Other extraordinary Items
0
5
0
n/a
(100.0)
0
(100.0)
n/a
Gross profit
Other income Income tax
Gn (Ls) from affiliates Net profit (loss)
0
(1)
(9)
n/a
612.1
(100)
7,474.9
9.4
223
933
260
16.6
(72.2)
1,918
(4.7)
13.5
Normalized profit (loss)
223
929
260
16.6
(72.1)
1,918
(4.6)
13.5
Reported EPS (THB) Gross margin - residential (%)
0.08 32.4
0.33 33.4
0.09 32.4
16.5
(72.1)
0.67 33.2
(4.8)
13.6
EBITDA margin (%)
12.5
15.6
12.3
14.1
Net margin (%)
7.9
11.1
7.5
9.4
Current ratio (x)
3.0
3.4
3.2
3.7
Interest coverage (x)
6.2
15.1
4.8
7.7
Debt / equity (x)
0.8
1.1
1.2
1.3
BVPS (Bt)
4.5
4.9
5.0
5.3
ROE (%)
6.9
26.6
7.3
13.1
Source: AP, KT Zmico Research
AP reported Bt260m net profit (Bt0.091 per share) in 1Q14 The profit grew 16.6% YoY on the back of a 23.7% YoY increase in revenue to Bt3.52bn. 1Q14 transfers came in at Bt3.48bn (+23.5% YoY, -58.4% QoQ), of which 54% came from SDH and TH, while 46% came from condos. The 1Q14 bottom line was 4.7% higher than our forecast and 5.2% lower than the consensus. The difference between the actual result and our forecast was brought about by lower-than-expected SG&A to revenue of 21.4% (1Q14E: 22.9%). Figure 2: New CD launches under JV in 2Q14
Project value (Btm)
No. of units
Unit sold as of 14 May 14* (%)
Official Launch date
Transfer starts
Rhythm Sukhumvit 36
2,850
496
50%
15‐18 May 14
2Q17
Aspire Ratchada‐Wongsawang
2,800
1232
19%
15‐18 May 14
4Q17
Rhythm Asoke II
1,500
346
35%
15‐18 May 14
4Q17
Total
7,150
2074
29%
*from exclusive launch Source: AP, KT ZMICO Research Figure 3: Old projects that face technical issues
Project value (Btm)
No. of units
Unit sold as of 31 Mar 14 (%)
Re‐launch date
Transfer starts
Rhythm Sathorn
4,400
910
47%
3Q14
4Q14
Aspire Ngamwongwan
2,200
1,458
16%
likely 2015
3Q15
Galerie rue de 39
3,200
88
0%
likely 2015
2016
Source: AP, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 2 of 5
Figure 4: Backlog distribution as of 5 May 2014
Source: AP, KT ZMICO Research Figure 5: 2014 Project launches
Source: AP, KT ZMICO Research Figure 6: New CD completions in 2014
Life Ratchadapisek Aspire Rama 9 Rhythm Sathorn
Project Value 3,500 2,400 4,400
No. of units 837 663 910
Units sold (%) 74.0% 93.0% 71.0%
Launch Date 3Q11 1Q12 3Q10
Transfer starts 2Q14 3Q14 4Q14
Source: AP, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
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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 13,639 (8,434) 5,205 (2,695) 2,706 (196) 2,510 (191) 73 2,392 (844) 0 4 0 1,551 0.55 0.54 1,549 0.55 0.18
2012 17,310 (11,274) 6,036 (3,128) 3,061 (152) 2,908 (213) 65 2,760 (691) 0 117 0 2,186 0.77 0.76 2,097 0.74 0.25
2013 19,989 (13,238) 6,750 (3,976) 2,933 (159) 2,774 (293) 67 2,549 (539) 0 5 (1) 2,013 0.70 0.70 2,010 0.70 0.25
2014E 20,479 (13,600) 6,880 (4,094) 2,892 (106) 2,786 (364) 75 2,497 (479) 0 0 (100) 1,918 0.67 0.67 1,918 0.67 0.22
2015E 24,071 (16,061) 8,010 (4,813) 3,304 (106) 3,197 (395) 75 2,878 (560) 0 0 (80) 2,238 0.78 0.78 2,238 0.78 0.26
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
2011 438 69 26,616 143 2,109 29,375 5,922 8,302 14,224 2,822 10,661 29,375
2012 744 108 26,490 127 2,004 29,472 4,209 8,073 12,282 2,848 12,680 29,472
2013 889 110 30,784 129 2,497 34,410 5,059 10,371 15,430 2,860 14,007 34,410
2014E 818 122 35,639 128 2,976 39,683 5,701 13,482 19,183 2,860 15,210 39,683
2015E 1,644 140 38,835 118 3,086 43,823 5,325 15,505 20,829 2,860 16,798 43,823
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
2011 1,551 4 196 (4,455) (3,090) (69) 61 (9) 3,578 25 (422) 0 3,181 355
2012 2,186 (103) 152 724 2,492 (50) 266 216 (1,959) 66 (509) 1 (2,400) 438
2013 2,013 (5) 159 (4,419) (2,669) (69) (20) (89) 3,589 29 (715) 2 2,905 744
2014E 1,918 0 106 (5,062) (3,055) (56) 2 (54) 3,753 0 (715) 3 3,041 889
2015E 2,238 0 106 (2,459) (132) (56) (4) (60) 1,646 0 (628) 4 1,022 818
Free cash flow
(1,749)
3,991
(1,540)
(2,289)
745
(0.62)
1.41
(0.54)
(0.80)
0.26
2011 (1.5) (17.8) (30.6) 37.7 19.8 18.5 11.5 11.4 (35.2)
2012 26.9 13.1 40.0 34.4 17.7 16.9 12.7 12.2 (24.0)
2013 15.5 (4.2) (8.6) 33.3 14.7 14.0 10.1 10.1 (21.1)
2014E 2.5 (1.4) (4.8) 33.2 14.1 13.7 9.4 9.4 (20.0)
2015E 17.5 14.2 16.7 32.9 13.7 13.4 9.3 9.3 (20.0)
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 (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 4 of 5
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 5 of 5
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KT•ZMICO Securities Company Limited
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