SC Asset Corporation
SC Asset Corporation Buy (16E TP Bt3.50)
Company Update
Close Bt2.86
Property Development January 18, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
4Q15E core profit to hit a record high Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
0.405
0.422
KT ZMICO vs. consensus Share data
‐1.2%
‐2.8%
Reuters / Bloomberg
SC.BK/SC TB
Paid‐up Shares (m)
4,179.33
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
12.00/329.00
Foreign limit / actual (%)
49.00/4.38
52 week High / Low (Bt)
3.63/2.62
Avg. daily T/O (shares 000) NVDR (%)
3,860.00 1.96
Estimated free float (%)
34.56
Beta
0.78
URL
www.scasset.com
CGR
Anti‐corruption
Level 3B (Established)
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Maintain Buy with 16E TP at Bt3.50 We maintain SC’s 2016E TP at Bt3.5 (8.5x PER). We revise up 2015E core profit by 3% and expect its 4Q15E core profit to hit a record high. The positive outlook should continue in 1Q16 when transfer revenue is expected to be boosted by the government’s stimulus package. Moreover, we expect SC’s 2015E DPS at Bt0.16, implying a dividend yield of 5.7%. Hence, we maintain Buy. 2015 presales accounted for 97% of target 4Q15 presales were at Bt4.2bn (+72.4% YoY, +79.2% QoQ). The strong growth was supported by new project launches in 4Q15 worth a total of Bt11bn, consisting of two low‐rise projects (Bt6bn) and two condo projects (Bt4.93bn). However, 2015 presales ended up at Bt12.5bn (+46.3% YoY), which was slightly below the firm’s 2015E target at Bt12.9bn due to slower‐than‐expected sales during 3Q15. SC targets 2016E presales growth of 10‐15% YoY and plans to launch 10 projects with a total value of Bt23bn (condos: low rise = 65:35); meanwhile, its transfer target will increase less than 10% YoY due to the slow economic growth. Revise up 2015E core profit but maintain 2016E We revise up our 2015E core profit forecast by 3% to Bt1.7bn (+13.7% YoY) from the previous forecast. The upward revision owes to its 2015E transfer amount being better than our earlier estimate by 3%. However, we conservatively maintain our 2016E core profit forecast at Bt1.74bn (+2.4% YoY) on the back of transfers of Bt13.7bn (+2.4% YoY), with around 63% of transfers to be derived from low rise (+5% YoY) and the rest from condos (+2% YoY). 4Q15E core profit likely to hit a record high We expect SC’s core profit at Bt630mn (+11.9% YoY, +61.3% QoQ), which will be the best earnings of the year and a record high. Transfers were around Bt4.7bn (+14.5% YoY, +65.1% QoQ), with an increase from both low‐rise and condo projects, specifically Centric Sea Pattaya (Bt2.9bn, 70% sold, 45% transferred), which was a new condo that started transferring in 4Q15. 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 10,031 1,082 0.29 (12.1) 0.28 (11.8) 0.12 2.82 2012 9.9 10.3 16.2 1.0 4.2 10.3 55.4
2014 12,601 1,558 0.42 44.8 0.40 44.4 0.21 3.14 2013 6.8 7.1 10.7 0.9 7.2 13.4 53.9
2015E 13,931 1,698 0.40 (3.7) 0.40 0.5 0.16 3.21 2014 7.1 7.1 9.5 0.9 5.7 12.6 46.1
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2016E 14,486 1,740 0.41 2.4 0.41 2.4 0.17 3.47 2015E 6.9 6.9 9.3 0.8 5.8 11.9 42.9
2017E 15,329 1,798 0.43 3.3 0.43 3.3 0.17 3.73 2016E 6.7 6.7 9.8 0.8 6.0 11.5 44.9
Figure 1: Quarterly earnings preview Profit and Loss (Btmn)
FY Ended 31 Dec
4Q14
3Q15
4Q15E
% YoY
% QoQ
2014
2015E
% YoY
Revenue from project sales Total revenue Gross profit
4,196 4,410 1,607
2,911 3,117 1,184
4,695 4,901 1,801
11.9 11.1 12.1
61.3 57.2 52.1
11,750 12,601 4,577
13,108 13,931 5,131
11.6 10.6 12.1
EBITDA
795
580
857
7.7
47.7
2,159
2,423
12.2
Interest expense
(49)
(40)
(43)
(12.5)
6.4
(176)
(189)
7.3
Other income
12
11
10
(17.6)
(6.1)
27
39
45.0
(156)
(106)
(162)
4.1
52.2
(400)
(445)
11.1
Net profit (loss)
617
411
630
2.1
53.5
1,558
1,698
9.0
Core net profit (loss)
568
411
630
11.0
53.5
1,493
1,698
13.7
Reported EPS (THB)
0.17
0.10
0.15
(9.2)
53.5
0.42
0.40
(3.7)
Core EPS (THB)
0.15
0.10
0.15
(1.9)
53.5
0.40
0.40
0.5
Income tax
Gross margin – project sales (%)
35.0
36.0
35.5
34.4
35.1
Gross margin ‐ overall (%)
36.4
38.0
36.7
36.3
36.8
EBITDA margin (%)
18.0
18.6
17.5
17.1
17.4
Net margin (%)
14.0
13.2
12.9
12.4
12.2
Current ratio (x)
2.0
2.2
2.9
2.0
2.9
Interest coverage (x)
15.8
13.9
19.5
11.8
12.4
Debt / equity (x)
1.5
1.5
1.2
1.5
1.2
BVPS (Bt)
3.13
2.97
3.21
3.1
3.2
ROE (%)
13.8
13.8
12.6
13.4
12.6
Source: SC, KT ZMICO Research
Figure 2: Presales as of 31 Dec 15
Figure 3: Distribution of backlog as of 30 Sep 15
Btmn 14,000 12,000
4Q15 Bt1,736mn
2018 Bt1,563mn
10,000 8,000 6,000 4,000
2017 Bt1,042mn
2,000
Backlog Bt8,681mn
‐
Condo
Source: SC, KT ZMICO Research
Low rise
2016 Bt4,341mn
Source: SC, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 4: Project launches (2015‐16) Projects Granada Pinklao – Petchkasem
Type SDH
Units 36
Value 2,300
Launch 1Q15
Condo
187
4,700
2Q15
Life Bangkok Boulevard Ratchaphruek‐Pinklao
SDH
271
1,500
3Q15
Life Bangkok Boulevard Ramintra 65
SDH
152
1,100
3Q15
PAVE Rangsit
SDH
320
1,400
3Q15
Grand Bangkok Boulevard Ratchaphruek‐Charan
SDH
92
3,200
4Q15
Condo
317
930
4Q15
Saladaeng One
Chambers Ladprao‐Wanghin Total
1,375
15,130
SDH
65
2,800
1Q16
Soft launch for VVIP on Oct‐15
BEATNIQ Sukhumvit 32
Condo
197
4,000
1Q16
Soft launch on 13‐15 Nov‐15
Condo Chidlom
Condo
N.A.
7,000
2016
262
13,800
Grand Bangkok Boulevard Sukhumvit
Remarks
Total Source: SC, KT ZMICO Research
Figure 5: Major forecast revisions Old
New
% Change
Remarks
Btmn
2015E
2016E
2015E
2016E
2015E
2016E
Residential sales
12,722
13,663
13,108
13,663
3.0
0.0
Transfer rate was better than expected
High rise
8,063
8,622
8,173
8,622
1.4
0.0
Low rise
4,659
5,041
4,935
5,041
5.9
0.0
Selling expenses
1,330
1,362
1,370
1,362
3.0
0.0
Increase along with transfers
Administration
1,425
1,435
1,468
1,435
3.0
0.0
Increase along with transfers
Core profit
1,652
1,740
1,698
1,740
2.8
0.0
Increase along with transfers
Net profit
1,652
1,740
1,698
1,740
2.8
0.0
Increase along with transfers
Source: SC, KT ZMICO Research
Figure 6: Major assumptions
2013
Revenue Revenue from project sales Revenues from rental and rendering of services
2014
9,201
2015E
11,750
2016E
13,108
2017E
13,663
14,470
829
850
822
822
858
10,030
12,599
13,930
14,485
15,328
Growth YoY
Revenue from project sales
21.8%
27.7%
11.6%
4.2%
5.9%
Revenues from rental and rendering of services
3.2%
2.5%
‐3.3%
0.0%
4.4%
Total
20.0%
25.6%
10.6%
4.0%
5.8%
Total
Gross margin
Revenue from project sales
33.0%
34.4%
35.1%
33.4%
33.3%
Revenues from rental and rendering of services
63.4%
63.3%
65.0%
65.0%
65.0%
Overall GPM
35.5%
36.3%
36.8%
35.2%
35.0%
NPM
10.8%
12.4%
12.2%
12.0%
11.7%
Source: SC, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 10,031 (6,465) 3,566 (2,255) 1,410 85 1,325 (94) 14 1,273 (192) 0 42 0 1,082 0.29 0.29 1,039 0.28 0.12
2014 12,601 (8,023) 4,577 (2,534) 2,159 90 2,069 (176) 27 1,959 (400) 0 65 0 1,558 0.42 0.42 1,493 0.40 0.21
2015E 13,931 (8,799) 5,131 (2,838) 2,423 91 2,332 (189) 39 2,143 (445) 0 0 0 1,698 0.40 0.40 1,698 0.40 0.16
2016E 14,486 (9,392) 5,094 (2,797) 2,431 100 2,331 (156) 34 2,175 (435) 0 0 0 1,740 0.41 0.41 1,740 0.41 0.17
2017E 15,329 (9,958) 5,370 (3,010) 2,496 99 2,397 (150) 36 2,247 (449) 0 0 0 1,798 0.43 0.43 1,798 0.43 0.17
2013 835 63 0 6,570 19,355 26,993 7,068 5,993 16,466 3,713 10,527 26,993
2014 1,156 70 0 6,859 20,671 28,934 8,220 5,373 17,298 3,715 11,636 28,934
2015E 544 76 0 6,996 21,089 29,045 4,800 6,748 15,543 4,179 13,502 29,045
2016E 200 79 0 6,970 22,045 29,643 5,879 5,048 15,080 4,179 14,563 29,643
2017E 200 84 0 7,107 25,063 32,813 9,454 3,300 17,149 4,179 15,664 32,813
2013 1,082 (703) 85 (2,817) (2,353) 55 0 55 2,481 9 (107) 0 2,383 84 (1,764) (0.47)
2014 1,558 (405) 90 (915) 328 (668) 0 (668) 596 2 (445) 0 153 (186) 573 0.15
2015E 1,698 12 91 (242) 1,559 (3,692) 0 (3,692) (2,044) 0 (297) 0 (2,341) (4,474) 1,388 0.33
2016E 1,740 13 100 (764) 1,090 1,224 0 1,224 (621) 0 (679) 0 (1,300) 1,013 967 0.23
2017E 1,798 14 99 (2,937) (1,026) 3,440 0 3,440 1,827 0 (696) 0 1,131 3,545 (1,119) (0.27)
2013 20.0 (1.7) (12.1) 35.5 14.1 13.2 10.8 10.4 15.1
2014 25.6 53.2 44.8 36.3 17.1 16.4 12.4 11.9 20.4
2015E 10.6 12.2 (3.7) 36.8 17.4 16.7 12.2 12.2 20.8
2016E 4.0 0.4 2.4 35.2 16.8 16.1 12.0 12.0 20.0
2017E 5.8 2.7 3.3 35.0 16.3 15.6 11.7 11.7 20.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
Note: KT ZMICO is a partnership between KTB and ZMICO. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, TFG. KT ZMICO is a co‐underwriter of TKN.
Anti‐corruption Progress Indicator
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Company Update
Close Bt2.86
Property Development January 18, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
4Q15E core profit to hit a record high Price Performance (%)
Source: SET Smart
FY15
FY16
Consensus EPS (Bt)
0.405
0.422
KT ZMICO vs. consensus Share data
‐1.2%
‐2.8%
Reuters / Bloomberg
SC.BK/SC TB
Paid‐up Shares (m)
4,179.33
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
12.00/329.00
Foreign limit / actual (%)
49.00/4.38
52 week High / Low (Bt)
3.63/2.62
Avg. daily T/O (shares 000) NVDR (%)
3,860.00 1.96
Estimated free float (%)
34.56
Beta
0.78
URL
www.scasset.com
CGR
Anti‐corruption
Level 3B (Established)
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Maintain Buy with 16E TP at Bt3.50 We maintain SC’s 2016E TP at Bt3.5 (8.5x PER). We revise up 2015E core profit by 3% and expect its 4Q15E core profit to hit a record high. The positive outlook should continue in 1Q16 when transfer revenue is expected to be boosted by the government’s stimulus package. Moreover, we expect SC’s 2015E DPS at Bt0.16, implying a dividend yield of 5.7%. Hence, we maintain Buy. 2015 presales accounted for 97% of target 4Q15 presales were at Bt4.2bn (+72.4% YoY, +79.2% QoQ). The strong growth was supported by new project launches in 4Q15 worth a total of Bt11bn, consisting of two low‐rise projects (Bt6bn) and two condo projects (Bt4.93bn). However, 2015 presales ended up at Bt12.5bn (+46.3% YoY), which was slightly below the firm’s 2015E target at Bt12.9bn due to slower‐than‐expected sales during 3Q15. SC targets 2016E presales growth of 10‐15% YoY and plans to launch 10 projects with a total value of Bt23bn (condos: low rise = 65:35); meanwhile, its transfer target will increase less than 10% YoY due to the slow economic growth. Revise up 2015E core profit but maintain 2016E We revise up our 2015E core profit forecast by 3% to Bt1.7bn (+13.7% YoY) from the previous forecast. The upward revision owes to its 2015E transfer amount being better than our earlier estimate by 3%. However, we conservatively maintain our 2016E core profit forecast at Bt1.74bn (+2.4% YoY) on the back of transfers of Bt13.7bn (+2.4% YoY), with around 63% of transfers to be derived from low rise (+5% YoY) and the rest from condos (+2% YoY). 4Q15E core profit likely to hit a record high We expect SC’s core profit at Bt630mn (+11.9% YoY, +61.3% QoQ), which will be the best earnings of the year and a record high. Transfers were around Bt4.7bn (+14.5% YoY, +65.1% QoQ), with an increase from both low‐rise and condo projects, specifically Centric Sea Pattaya (Bt2.9bn, 70% sold, 45% transferred), which was a new condo that started transferring in 4Q15. 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 10,031 1,082 0.29 (12.1) 0.28 (11.8) 0.12 2.82 2012 9.9 10.3 16.2 1.0 4.2 10.3 55.4
2014 12,601 1,558 0.42 44.8 0.40 44.4 0.21 3.14 2013 6.8 7.1 10.7 0.9 7.2 13.4 53.9
2015E 13,931 1,698 0.40 (3.7) 0.40 0.5 0.16 3.21 2014 7.1 7.1 9.5 0.9 5.7 12.6 46.1
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2016E 14,486 1,740 0.41 2.4 0.41 2.4 0.17 3.47 2015E 6.9 6.9 9.3 0.8 5.8 11.9 42.9
2017E 15,329 1,798 0.43 3.3 0.43 3.3 0.17 3.73 2016E 6.7 6.7 9.8 0.8 6.0 11.5 44.9
Figure 1: Quarterly earnings preview Profit and Loss (Btmn)
FY Ended 31 Dec
4Q14
3Q15
4Q15E
% YoY
% QoQ
2014
2015E
% YoY
Revenue from project sales Total revenue Gross profit
4,196 4,410 1,607
2,911 3,117 1,184
4,695 4,901 1,801
11.9 11.1 12.1
61.3 57.2 52.1
11,750 12,601 4,577
13,108 13,931 5,131
11.6 10.6 12.1
EBITDA
795
580
857
7.7
47.7
2,159
2,423
12.2
Interest expense
(49)
(40)
(43)
(12.5)
6.4
(176)
(189)
7.3
Other income
12
11
10
(17.6)
(6.1)
27
39
45.0
(156)
(106)
(162)
4.1
52.2
(400)
(445)
11.1
Net profit (loss)
617
411
630
2.1
53.5
1,558
1,698
9.0
Core net profit (loss)
568
411
630
11.0
53.5
1,493
1,698
13.7
Reported EPS (THB)
0.17
0.10
0.15
(9.2)
53.5
0.42
0.40
(3.7)
Core EPS (THB)
0.15
0.10
0.15
(1.9)
53.5
0.40
0.40
0.5
Income tax
Gross margin – project sales (%)
35.0
36.0
35.5
34.4
35.1
Gross margin ‐ overall (%)
36.4
38.0
36.7
36.3
36.8
EBITDA margin (%)
18.0
18.6
17.5
17.1
17.4
Net margin (%)
14.0
13.2
12.9
12.4
12.2
Current ratio (x)
2.0
2.2
2.9
2.0
2.9
Interest coverage (x)
15.8
13.9
19.5
11.8
12.4
Debt / equity (x)
1.5
1.5
1.2
1.5
1.2
BVPS (Bt)
3.13
2.97
3.21
3.1
3.2
ROE (%)
13.8
13.8
12.6
13.4
12.6
Source: SC, KT ZMICO Research
Figure 2: Presales as of 31 Dec 15
Figure 3: Distribution of backlog as of 30 Sep 15
Btmn 14,000 12,000
4Q15 Bt1,736mn
2018 Bt1,563mn
10,000 8,000 6,000 4,000
2017 Bt1,042mn
2,000
Backlog Bt8,681mn
‐
Condo
Source: SC, KT ZMICO Research
Low rise
2016 Bt4,341mn
Source: SC, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 4: Project launches (2015‐16) Projects Granada Pinklao – Petchkasem
Type SDH
Units 36
Value 2,300
Launch 1Q15
Condo
187
4,700
2Q15
Life Bangkok Boulevard Ratchaphruek‐Pinklao
SDH
271
1,500
3Q15
Life Bangkok Boulevard Ramintra 65
SDH
152
1,100
3Q15
PAVE Rangsit
SDH
320
1,400
3Q15
Grand Bangkok Boulevard Ratchaphruek‐Charan
SDH
92
3,200
4Q15
Condo
317
930
4Q15
Saladaeng One
Chambers Ladprao‐Wanghin Total
1,375
15,130
SDH
65
2,800
1Q16
Soft launch for VVIP on Oct‐15
BEATNIQ Sukhumvit 32
Condo
197
4,000
1Q16
Soft launch on 13‐15 Nov‐15
Condo Chidlom
Condo
N.A.
7,000
2016
262
13,800
Grand Bangkok Boulevard Sukhumvit
Remarks
Total Source: SC, KT ZMICO Research
Figure 5: Major forecast revisions Old
New
% Change
Remarks
Btmn
2015E
2016E
2015E
2016E
2015E
2016E
Residential sales
12,722
13,663
13,108
13,663
3.0
0.0
Transfer rate was better than expected
High rise
8,063
8,622
8,173
8,622
1.4
0.0
Low rise
4,659
5,041
4,935
5,041
5.9
0.0
Selling expenses
1,330
1,362
1,370
1,362
3.0
0.0
Increase along with transfers
Administration
1,425
1,435
1,468
1,435
3.0
0.0
Increase along with transfers
Core profit
1,652
1,740
1,698
1,740
2.8
0.0
Increase along with transfers
Net profit
1,652
1,740
1,698
1,740
2.8
0.0
Increase along with transfers
Source: SC, KT ZMICO Research
Figure 6: Major assumptions
2013
Revenue Revenue from project sales Revenues from rental and rendering of services
2014
9,201
2015E
11,750
2016E
13,108
2017E
13,663
14,470
829
850
822
822
858
10,030
12,599
13,930
14,485
15,328
Growth YoY
Revenue from project sales
21.8%
27.7%
11.6%
4.2%
5.9%
Revenues from rental and rendering of services
3.2%
2.5%
‐3.3%
0.0%
4.4%
Total
20.0%
25.6%
10.6%
4.0%
5.8%
Total
Gross margin
Revenue from project sales
33.0%
34.4%
35.1%
33.4%
33.3%
Revenues from rental and rendering of services
63.4%
63.3%
65.0%
65.0%
65.0%
Overall GPM
35.5%
36.3%
36.8%
35.2%
35.0%
NPM
10.8%
12.4%
12.2%
12.0%
11.7%
Source: SC, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 10,031 (6,465) 3,566 (2,255) 1,410 85 1,325 (94) 14 1,273 (192) 0 42 0 1,082 0.29 0.29 1,039 0.28 0.12
2014 12,601 (8,023) 4,577 (2,534) 2,159 90 2,069 (176) 27 1,959 (400) 0 65 0 1,558 0.42 0.42 1,493 0.40 0.21
2015E 13,931 (8,799) 5,131 (2,838) 2,423 91 2,332 (189) 39 2,143 (445) 0 0 0 1,698 0.40 0.40 1,698 0.40 0.16
2016E 14,486 (9,392) 5,094 (2,797) 2,431 100 2,331 (156) 34 2,175 (435) 0 0 0 1,740 0.41 0.41 1,740 0.41 0.17
2017E 15,329 (9,958) 5,370 (3,010) 2,496 99 2,397 (150) 36 2,247 (449) 0 0 0 1,798 0.43 0.43 1,798 0.43 0.17
2013 835 63 0 6,570 19,355 26,993 7,068 5,993 16,466 3,713 10,527 26,993
2014 1,156 70 0 6,859 20,671 28,934 8,220 5,373 17,298 3,715 11,636 28,934
2015E 544 76 0 6,996 21,089 29,045 4,800 6,748 15,543 4,179 13,502 29,045
2016E 200 79 0 6,970 22,045 29,643 5,879 5,048 15,080 4,179 14,563 29,643
2017E 200 84 0 7,107 25,063 32,813 9,454 3,300 17,149 4,179 15,664 32,813
2013 1,082 (703) 85 (2,817) (2,353) 55 0 55 2,481 9 (107) 0 2,383 84 (1,764) (0.47)
2014 1,558 (405) 90 (915) 328 (668) 0 (668) 596 2 (445) 0 153 (186) 573 0.15
2015E 1,698 12 91 (242) 1,559 (3,692) 0 (3,692) (2,044) 0 (297) 0 (2,341) (4,474) 1,388 0.33
2016E 1,740 13 100 (764) 1,090 1,224 0 1,224 (621) 0 (679) 0 (1,300) 1,013 967 0.23
2017E 1,798 14 99 (2,937) (1,026) 3,440 0 3,440 1,827 0 (696) 0 1,131 3,545 (1,119) (0.27)
2013 20.0 (1.7) (12.1) 35.5 14.1 13.2 10.8 10.4 15.1
2014 25.6 53.2 44.8 36.3 17.1 16.4 12.4 11.9 20.4
2015E 10.6 12.2 (3.7) 36.8 17.4 16.7 12.2 12.2 20.8
2016E 4.0 0.4 2.4 35.2 16.8 16.1 12.0 12.0 20.0
2017E 5.8 2.7 3.3 35.0 16.3 15.6 11.7 11.7 20.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
Note: KT ZMICO is a partnership between KTB and ZMICO. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, TFG. KT ZMICO is a co‐underwriter of TKN.
Anti‐corruption Progress Indicator
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
