LPN Development
L.P.N. Development Outperform (16E TP Bt15.00)
Company Update
Close Bt14.00
Property Development February 16, 2016
Earnings upgrade /Earnings downgrade/Overview unchanged
A challenging year ahead Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
1.891
1.985
KT ZMICO vs. consensus Share data
‐10.1%
‐15.9%
Reuters / Bloomberg
LPN.BK/LPN TB
Paid‐up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
21.00/580.00
Foreign limit / actual (%)
39.00/24.24
52 week High / Low (Bt)
21.20/13.80
Avg. daily T/O (shares 000)
5,122.00
NVDR (%)
12.69
Estimated free float (%)
79.91
Beta
0.95
URL
www.lpn.co.th
CGR
Anti‐corruption
Level 3A (Established)
Note: KT•ZMICO is a Financial Advisor for LPN. Worarat Powpaka Analyst, no. 17992
Maintain Outperform with new 16E TP at Bt15 We maintain our rating of Outperform but decrease our 16E TP to Bt15 after revising down 2016‐17E net profit by 10.6%‐13.9%, respectively, and reducing PER from 9.5x to 9.0x (‐0.5SD). The near‐term catalysts are from the 2H15 dividend yield of 4.3% and improving earnings momentum in 1Q16E‐2Q16E after completed condos amounting to Bt3.5bn and Bt8.4bn begin transfers in the respective periods. 2016E presales set to grow 21.2% YoY LPN expects its 2016E presales target to be Bt17.6bn (+21.2% YoY) and the revenue target at Bt17.6bn (+10.1% YoY). The firm’s presales growth will mainly be derived from 11 newly‐launched projects (Bangkok metropolitan region and in the provinces) in 2016 with a total value of Bt17.7bn. LPN had presales in Jan‐16 of Bt529mn (‐12.6% YoY) due to the quiet market during the month; moreover, a newly‐launched project on 30 Jan, i.e., Lumpini Ville Ratchaphruek‐Bangwaek (Bt1.3bn), was only 20% sold. Therefore, it will be rather challenging for LPN to meet its target. The firm is still expecting that its presales and transfers will be boosted in the last three months before the property stimulus measures expire at the end of April‐16. We agree that the market should be active from Mar‐April‐16. However, our presales assumption is around Bt16bn (+10% YoY), which is 6% lower than the firm’s target due to the fact that some new launches are in the provinces where the market is still sluggish. Revise down 2016‐17E net profit by 10.6%‐13.9%, respectively We revised down our 2016‐17E net profit by 10.6%‐13.9%, respectively. The downward revisions were mainly from i) lower transfers in 2017E by 6.3% as some newly‐launched projects are in the provinces and we thus expect a slower rate for both presales and transfers; ii) a lower GPM to 30% (previously 32%‐31%) for both years as the management guided that the GPM trend will be only 30%; and iii) a higher‐than‐expected SG&A trend; hence, we increase 2016‐17E SG&A/revenue to 11.1% and 11.7%, respectively, as we are more conservative on LPN’s marketing expenses for boosting its presales this year along with employee benefit expenses. Announced 2H15 DPS at Bt0.6, implying a yield of 4.3% LPN announced its 2H15 DPS at Bt0.6, implying a yield of 4.3%. It will go XD on February 23 and the dividend will be paid on April 11, 2016.
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 14,347 2,329 1.58 4.5 1.58 6.2 0.84 6.52 2012 8.9 8.9 8.3 2.1 6.0 25.7 42.6
2014 12,867 2,021 1.37 (13.2) 1.37 (13.2) 0.80 7.05 2013 10.2 10.2 10.0 2.0 5.7 20.2 52.4
2015 16,627 2,413 1.64 19.4 1.64 19.4 0.90 7.85 2014 8.6 8.6 7.9 1.8 6.4 22.0 37.9
[email protected] 66 (0) 2624‐6248
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 6
2016E 16,782 2,504 1.70 3.8 1.70 3.8 0.90 8.65 2015E 8.2 8.2 7.6 1.6 6.4 20.6 30.2
2017E 17,026 2,463 1.67 (1.6) 1.67 (1.6) 0.90 9.41 2016E 8.4 8.4 7.6 1.5 6.4 18.5 25.9
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
4Q14
3Q15
4Q15
% YoY
% QoQ
2014
2015
% YoY
Revenue from project sales Total revenue Gross profit
4,182 4,323 1,425
5,877 6,041 1,849
3,042 3,223 1,021
(27.3) (25.4) (28.4)
(48.2) (46.6) (44.8)
12,321 12,867 4,163
15,981 16,627 5,151
29.7 29.2 23.7
EBITDA
958
1,286
451
(52.9)
(64.9)
2,600
3,165
21.7
Interest expense
(6)
(3)
(1)
(78.6)
(57.8)
(21)
(11)
(45.7)
Other income
48
4
9
(80.2)
121.1
78
35
(55.0)
(204)
(264)
(149)
(26.7)
(43.4)
(534)
(707)
32.5
Net profit (loss)
743
1,011
288
(61.2)
(71.5)
2,021
2,413
19.4
Core net profit (loss)
743
1,011
288
(61.2)
(71.5)
2,021
2,413
19.4
Reported EPS (THB)
0.50
0.69
0.20
(61.2)
(71.5)
1.37
1.64
19.4
Core EPS (THB)
0.50
0.69
0.20
(61.2)
(71.5)
1.37
1.64
19.4
Income tax
Gross margin – project sales (%)
33.3
30.9
31.5
32.5
31.1
Gross margin ‐ overall (%)
33.0
30.6
31.7
32.4
31.0
EBITDA margin (%)
22.2
21.3
14.0
20.2
19.0
Net margin (%)
17.2
16.7
8.9
15.7
14.5
Current ratio (x)
2.3
2.9
3.1
2.3
3.1
154.2
409.3
330.9
123.5
277.3
Debt / equity (x)
0.9
0.7
0.7
0.9
0.7
BVPS (Bt)
7.05
7.65
7.85
7.05
7.85
ROE (%)
20.1
26.1
21.1
20.2
22.0
Interest coverage (x)
Source: LPN, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 6
Figure 2: Major forecast revisions Old
New
% Change
Btmn Residential sales
2016E 16,122
2017E 17,439
2016E 16,122
2017E 16,333
2016E 0.0
Residential GPM
32%
31%
30%
30%
(2%)
SG&A/Revenue
10.8%
11.0%
11.1%
11.7%
0.3%
Net profit
2,801
2,860
2,504
2,463
(10.6)
Remark
2017E (6.3) Declines along with 2017E transfer rate decrease. (1%) Decreases in line with management’s guidance. 0.7% Increases due to higher S&A expenses from marketing and employee benefits. (13.9)
Source: LPN, KT ZMICO Research Figure 3: Major assumptions Revenue (Btmn) Residential sales Rent Property management Total Growth YoY (%) Residential sales Rent Property management Total Gross margin (%) Residential sales Rent Property management Total NPM
2013 13,871 43 432 14,347 7.1 7.3 29.1 7.7
2014 12,321 51 495 12,867 (11.2) 18.9 14.4 (10.3)
2015 15,981 68 578 16,627 29.7 32.3 16.9 29.2
32.9 49.2 25.6 32.7 16.2
32.5 49.4 26.6 32.4 15.7
31.1 53.0 25.0 31.0 14.5
2016E 16,122 57 603 16,782
2017E 16,333 60 633 17,026
0.9 (15.9) 4.2 0.9
1.3 5.3 5.0 1.5
30.0 50.0 24.0 29.8 14.9
30.0 50.0 24.0 29.8 14.5
Source: LPN, KT ZMICO Research Figure 4: Quarterly presales
Figure 5: Condo completion schedule Btmn 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 ‐
Btmn
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 ‐ 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1M16
Source: LPN, KT ZMICO Research
2014 2015
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 6
3Q16
4Q16
Figure 6: Project launches in 2016
Value (Btmn)
Unit
Launch
Finish
1 Lumpini Ville Ratchaphruek‐Bang Waek
1,300
1,085
1Q16
2017
2 Lumpini Ville Township Rangsit‐Klong 1 (Ph 2)
2,600
3,674
1Q16
2016
500
339
2Q16
2017
3 Lumpini Place Huahin 4 Lumpini Ville Ratanathibet‐Saimah
1,000
900
3Q16
2017
5 Lumpini Park Petchakasem 98 (Ph 2)
1,850
1,355
3Q16
2017
6 Lumpini Sea View Chaam
1,430
1,134
4Q16
2017
7 Lumpini Ville Township Rangsit‐Klong 1 (Ph 3)
2,000
2,928
4Q16
2017
7,000
5,000
2Q‐4Q16
2017
17,680
16,415
8‐11 +Additional 4 projects Total Source: LPN, KT ZMICO Research Figure 7: Project update as of Jan 31, 2016
Source: LPN
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) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 14,347 (9,657) 4,690 (1,779) 2,990 37 2,953 (12) 42 2,954 (625) 0 0 0 2,329 1.58 1.58 2,329 1.58 0.84
2014 12,867 (8,704) 4,163 (1,679) 2,600 39 2,561 (21) 78 2,555 (534) 0 0 0 2,021 1.37 1.37 2,021 1.37 0.80
2015 16,627 (11,476) 5,151 (2,066) 3,165 45 3,120 (11) 35 3,121 (707) 0 0 0 2,413 1.64 1.64 2,413 1.64 0.90
2016E 16,782 (11,773) 5,009 (1,864) 3,226 46 3,180 (20) 35 3,170 (666) 0 0 0 2,504 1.70 1.70 2,504 1.70 0.90
2017E 17,026 (11,944) 5,082 (1,990) 3,176 48 3,128 (20) 36 3,118 (655) 0 0 0 2,463 1.67 1.67 2,463 1.67 0.90
2013 1,192 130 3,500 1,189 11,203 17,420 5,148 140 7,794 1,476 9,626 17,420
2014 1,113 232 4,957 1,702 11,522 19,784 4,986 1,583 9,375 1,476 10,408 19,784
2015 758 140 5,589 2,003 10,703 19,625 2,934 2,209 8,044 1,476 11,581 19,625
2016E 1,000 235 5,161 2,046 11,757 20,620 3,533 1,324 7,862 1,476 12,758 20,620
2017E 1,000 238 4,581 2,088 13,242 21,566 3,148 1,456 7,673 1,476 13,893 21,566
2013 2,329 (392) 37 (3,212) (1,238) (12) 0 (12) 2,439 0 (1,165) 0 1,274 24 (904) (0.61)
2014 2,021 (279) 39 (1,847) (66) (52) (66) (118) 1,279 0 (1,239) 0 40 (144) 12 0.01
2015 2,413 (191) 45 379 2,646 (265) 66 (199) (1,444) 0 (1,240) (52) (2,735) (289) 2,555 1.73
2016E 2,504 22 46 (648) 1,925 (49) 0 (49) (291) 0 (1,328) (14) (1,634) 242 1,855 1.26
2017E 2,463 23 48 (880) 1,654 (49) 0 (49) (258) 0 (1,328) (20) (1,605) 0 1,583 1.07
2013 7.7 5.4 4.5 32.7 20.8 20.6 16.2 16.2 21.2
2014 (10.3) (13.0) (13.2) 32.4 20.2 19.9 15.7 15.7 20.9
2015 29.2 21.7 19.4 31.0 19.0 18.8 14.5 14.5 22.7
2016E 0.9 1.9 3.8 29.8 19.2 18.9 14.9 14.9 21.0
2017E 1.5 (1.5) (1.6) 29.8 18.7 18.4 14.5 14.5 21.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 6
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, 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, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, LPN, ASK. 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 6 of 6
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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 Bt14.00
Property Development February 16, 2016
Earnings upgrade /Earnings downgrade/Overview unchanged
A challenging year ahead Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
1.891
1.985
KT ZMICO vs. consensus Share data
‐10.1%
‐15.9%
Reuters / Bloomberg
LPN.BK/LPN TB
Paid‐up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
21.00/580.00
Foreign limit / actual (%)
39.00/24.24
52 week High / Low (Bt)
21.20/13.80
Avg. daily T/O (shares 000)
5,122.00
NVDR (%)
12.69
Estimated free float (%)
79.91
Beta
0.95
URL
www.lpn.co.th
CGR
Anti‐corruption
Level 3A (Established)
Note: KT•ZMICO is a Financial Advisor for LPN. Worarat Powpaka Analyst, no. 17992
Maintain Outperform with new 16E TP at Bt15 We maintain our rating of Outperform but decrease our 16E TP to Bt15 after revising down 2016‐17E net profit by 10.6%‐13.9%, respectively, and reducing PER from 9.5x to 9.0x (‐0.5SD). The near‐term catalysts are from the 2H15 dividend yield of 4.3% and improving earnings momentum in 1Q16E‐2Q16E after completed condos amounting to Bt3.5bn and Bt8.4bn begin transfers in the respective periods. 2016E presales set to grow 21.2% YoY LPN expects its 2016E presales target to be Bt17.6bn (+21.2% YoY) and the revenue target at Bt17.6bn (+10.1% YoY). The firm’s presales growth will mainly be derived from 11 newly‐launched projects (Bangkok metropolitan region and in the provinces) in 2016 with a total value of Bt17.7bn. LPN had presales in Jan‐16 of Bt529mn (‐12.6% YoY) due to the quiet market during the month; moreover, a newly‐launched project on 30 Jan, i.e., Lumpini Ville Ratchaphruek‐Bangwaek (Bt1.3bn), was only 20% sold. Therefore, it will be rather challenging for LPN to meet its target. The firm is still expecting that its presales and transfers will be boosted in the last three months before the property stimulus measures expire at the end of April‐16. We agree that the market should be active from Mar‐April‐16. However, our presales assumption is around Bt16bn (+10% YoY), which is 6% lower than the firm’s target due to the fact that some new launches are in the provinces where the market is still sluggish. Revise down 2016‐17E net profit by 10.6%‐13.9%, respectively We revised down our 2016‐17E net profit by 10.6%‐13.9%, respectively. The downward revisions were mainly from i) lower transfers in 2017E by 6.3% as some newly‐launched projects are in the provinces and we thus expect a slower rate for both presales and transfers; ii) a lower GPM to 30% (previously 32%‐31%) for both years as the management guided that the GPM trend will be only 30%; and iii) a higher‐than‐expected SG&A trend; hence, we increase 2016‐17E SG&A/revenue to 11.1% and 11.7%, respectively, as we are more conservative on LPN’s marketing expenses for boosting its presales this year along with employee benefit expenses. Announced 2H15 DPS at Bt0.6, implying a yield of 4.3% LPN announced its 2H15 DPS at Bt0.6, implying a yield of 4.3%. It will go XD on February 23 and the dividend will be paid on April 11, 2016.
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 14,347 2,329 1.58 4.5 1.58 6.2 0.84 6.52 2012 8.9 8.9 8.3 2.1 6.0 25.7 42.6
2014 12,867 2,021 1.37 (13.2) 1.37 (13.2) 0.80 7.05 2013 10.2 10.2 10.0 2.0 5.7 20.2 52.4
2015 16,627 2,413 1.64 19.4 1.64 19.4 0.90 7.85 2014 8.6 8.6 7.9 1.8 6.4 22.0 37.9
[email protected] 66 (0) 2624‐6248
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 6
2016E 16,782 2,504 1.70 3.8 1.70 3.8 0.90 8.65 2015E 8.2 8.2 7.6 1.6 6.4 20.6 30.2
2017E 17,026 2,463 1.67 (1.6) 1.67 (1.6) 0.90 9.41 2016E 8.4 8.4 7.6 1.5 6.4 18.5 25.9
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
4Q14
3Q15
4Q15
% YoY
% QoQ
2014
2015
% YoY
Revenue from project sales Total revenue Gross profit
4,182 4,323 1,425
5,877 6,041 1,849
3,042 3,223 1,021
(27.3) (25.4) (28.4)
(48.2) (46.6) (44.8)
12,321 12,867 4,163
15,981 16,627 5,151
29.7 29.2 23.7
EBITDA
958
1,286
451
(52.9)
(64.9)
2,600
3,165
21.7
Interest expense
(6)
(3)
(1)
(78.6)
(57.8)
(21)
(11)
(45.7)
Other income
48
4
9
(80.2)
121.1
78
35
(55.0)
(204)
(264)
(149)
(26.7)
(43.4)
(534)
(707)
32.5
Net profit (loss)
743
1,011
288
(61.2)
(71.5)
2,021
2,413
19.4
Core net profit (loss)
743
1,011
288
(61.2)
(71.5)
2,021
2,413
19.4
Reported EPS (THB)
0.50
0.69
0.20
(61.2)
(71.5)
1.37
1.64
19.4
Core EPS (THB)
0.50
0.69
0.20
(61.2)
(71.5)
1.37
1.64
19.4
Income tax
Gross margin – project sales (%)
33.3
30.9
31.5
32.5
31.1
Gross margin ‐ overall (%)
33.0
30.6
31.7
32.4
31.0
EBITDA margin (%)
22.2
21.3
14.0
20.2
19.0
Net margin (%)
17.2
16.7
8.9
15.7
14.5
Current ratio (x)
2.3
2.9
3.1
2.3
3.1
154.2
409.3
330.9
123.5
277.3
Debt / equity (x)
0.9
0.7
0.7
0.9
0.7
BVPS (Bt)
7.05
7.65
7.85
7.05
7.85
ROE (%)
20.1
26.1
21.1
20.2
22.0
Interest coverage (x)
Source: LPN, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 6
Figure 2: Major forecast revisions Old
New
% Change
Btmn Residential sales
2016E 16,122
2017E 17,439
2016E 16,122
2017E 16,333
2016E 0.0
Residential GPM
32%
31%
30%
30%
(2%)
SG&A/Revenue
10.8%
11.0%
11.1%
11.7%
0.3%
Net profit
2,801
2,860
2,504
2,463
(10.6)
Remark
2017E (6.3) Declines along with 2017E transfer rate decrease. (1%) Decreases in line with management’s guidance. 0.7% Increases due to higher S&A expenses from marketing and employee benefits. (13.9)
Source: LPN, KT ZMICO Research Figure 3: Major assumptions Revenue (Btmn) Residential sales Rent Property management Total Growth YoY (%) Residential sales Rent Property management Total Gross margin (%) Residential sales Rent Property management Total NPM
2013 13,871 43 432 14,347 7.1 7.3 29.1 7.7
2014 12,321 51 495 12,867 (11.2) 18.9 14.4 (10.3)
2015 15,981 68 578 16,627 29.7 32.3 16.9 29.2
32.9 49.2 25.6 32.7 16.2
32.5 49.4 26.6 32.4 15.7
31.1 53.0 25.0 31.0 14.5
2016E 16,122 57 603 16,782
2017E 16,333 60 633 17,026
0.9 (15.9) 4.2 0.9
1.3 5.3 5.0 1.5
30.0 50.0 24.0 29.8 14.9
30.0 50.0 24.0 29.8 14.5
Source: LPN, KT ZMICO Research Figure 4: Quarterly presales
Figure 5: Condo completion schedule Btmn 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 ‐
Btmn
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 ‐ 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1M16
Source: LPN, KT ZMICO Research
2014 2015
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 6
3Q16
4Q16
Figure 6: Project launches in 2016
Value (Btmn)
Unit
Launch
Finish
1 Lumpini Ville Ratchaphruek‐Bang Waek
1,300
1,085
1Q16
2017
2 Lumpini Ville Township Rangsit‐Klong 1 (Ph 2)
2,600
3,674
1Q16
2016
500
339
2Q16
2017
3 Lumpini Place Huahin 4 Lumpini Ville Ratanathibet‐Saimah
1,000
900
3Q16
2017
5 Lumpini Park Petchakasem 98 (Ph 2)
1,850
1,355
3Q16
2017
6 Lumpini Sea View Chaam
1,430
1,134
4Q16
2017
7 Lumpini Ville Township Rangsit‐Klong 1 (Ph 3)
2,000
2,928
4Q16
2017
7,000
5,000
2Q‐4Q16
2017
17,680
16,415
8‐11 +Additional 4 projects Total Source: LPN, KT ZMICO Research Figure 7: Project update as of Jan 31, 2016
Source: LPN
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) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 14,347 (9,657) 4,690 (1,779) 2,990 37 2,953 (12) 42 2,954 (625) 0 0 0 2,329 1.58 1.58 2,329 1.58 0.84
2014 12,867 (8,704) 4,163 (1,679) 2,600 39 2,561 (21) 78 2,555 (534) 0 0 0 2,021 1.37 1.37 2,021 1.37 0.80
2015 16,627 (11,476) 5,151 (2,066) 3,165 45 3,120 (11) 35 3,121 (707) 0 0 0 2,413 1.64 1.64 2,413 1.64 0.90
2016E 16,782 (11,773) 5,009 (1,864) 3,226 46 3,180 (20) 35 3,170 (666) 0 0 0 2,504 1.70 1.70 2,504 1.70 0.90
2017E 17,026 (11,944) 5,082 (1,990) 3,176 48 3,128 (20) 36 3,118 (655) 0 0 0 2,463 1.67 1.67 2,463 1.67 0.90
2013 1,192 130 3,500 1,189 11,203 17,420 5,148 140 7,794 1,476 9,626 17,420
2014 1,113 232 4,957 1,702 11,522 19,784 4,986 1,583 9,375 1,476 10,408 19,784
2015 758 140 5,589 2,003 10,703 19,625 2,934 2,209 8,044 1,476 11,581 19,625
2016E 1,000 235 5,161 2,046 11,757 20,620 3,533 1,324 7,862 1,476 12,758 20,620
2017E 1,000 238 4,581 2,088 13,242 21,566 3,148 1,456 7,673 1,476 13,893 21,566
2013 2,329 (392) 37 (3,212) (1,238) (12) 0 (12) 2,439 0 (1,165) 0 1,274 24 (904) (0.61)
2014 2,021 (279) 39 (1,847) (66) (52) (66) (118) 1,279 0 (1,239) 0 40 (144) 12 0.01
2015 2,413 (191) 45 379 2,646 (265) 66 (199) (1,444) 0 (1,240) (52) (2,735) (289) 2,555 1.73
2016E 2,504 22 46 (648) 1,925 (49) 0 (49) (291) 0 (1,328) (14) (1,634) 242 1,855 1.26
2017E 2,463 23 48 (880) 1,654 (49) 0 (49) (258) 0 (1,328) (20) (1,605) 0 1,583 1.07
2013 7.7 5.4 4.5 32.7 20.8 20.6 16.2 16.2 21.2
2014 (10.3) (13.0) (13.2) 32.4 20.2 19.9 15.7 15.7 20.9
2015 29.2 21.7 19.4 31.0 19.0 18.8 14.5 14.5 22.7
2016E 0.9 1.9 3.8 29.8 19.2 18.9 14.9 14.9 21.0
2017E 1.5 (1.5) (1.6) 29.8 18.7 18.4 14.5 14.5 21.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 6
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, 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, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, LPN, ASK. 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 6 of 6
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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.
