LPN Development - Global Alliance Partners
L.P.N. Development Underperform (18E TP Bt12.00)
Earnings Review
Close Bt11.50
Property Development August 11, 2017
Beat forecast /Below forecast /In line
2Q17 earnings declined 71.7% YoY and 21.1% QoQ Results date: August 10, 2017 Price Performance (%) Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
1.019
1.298
KT ZMICO vs. consensus Share data
7.9%
1.7%
Reuters / Bloomberg
LPN.BK/ LPN TB
Paid‐up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
17.00/510.00
Foreign limit / actual (%)
39.00/33.88
52 week High / Low (Bt)
13.60/9.80
Avg. daily T/O (shares 000) NVDR (%)
7,779.00 4.78
Estimated free float (%)
81.17
Beta
1.02
URL
www.lpn.co.th
CGR
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected]
Level 4 (Certified)
Switch to Underperform with the 18E TP at Bt12 We maintain our 2017‐18E net profit, with backlog already secured by 70% and 38% of the 2017‐18E transfer forecasts, respectively. We roll over the TP to the 18E TP of Bt12 (PER 9X, PEG 0.45X) from the 17E TP of Bt9 and switch our rating from Sell to Underperform as the current price still has limited upside to our 18E TP and the 1H17 dividend yield of 1.3% is not very attractive. 2Q17 earnings declined 71.7% YoY and 21.1% QoQ LPN reported 2Q17 net profit at Bt249mn (‐71.7% YoY, ‐21.1% QoQ), 5% below our estimate, mainly due to lower‐than‐expected transfers by 4%. 2Q17 transfers were Bt1.82bn, decreasing 63.5% YoY and 19.8% QoQ from a lower backlog to be transferred in the period. The average GPM was in line at 30.7%. SG&A expenses to revenue were 15.4%, above our assumption at 14.9% due to a lower‐than‐expected transfer base. Maintain 2017E forecast LPN’s 1H17 net profit was 35% of our 2017E forecast, which we maintain at Bt1.6bn (‐25.4% YoY). We expect the net profit trend to soften QoQ in 3Q17E before recovering QoQ in 4Q17E. Announced 1H17 DPS of Bt0.15, implying 1.3% yield LPN announced an interim DPS of Bt0.15 for its 1H17 performance, implying a 1.3% yield. The stock will go XD on August 22 and the dividend will be paid on September 7, 2017. 7M17 presales secured 53% of full‐year target LPN reported 7M17 presales at Bt10.7bn, securing 53% of its 2017 presales target of Bt20bn. LPN plans to launch three projects worth Bt5.1bn in 4Q17E and postpone one premium house project worth Bt3.1bn to instead be launched in 2018. Hence, we expect that LPN’s full‐ year presales will be lower than its target by 17% at around Bt16.5bn from a lower launch value. LPN started its plan to sell its stock with the help of the company’s sales promotions and via Thai and foreign agencies from end Jun‐17, enabling LPN to sell inventory of Bt943mn in Jul‐17. Hence, we maintain our 2017‐18E transfers because LPN’s plan to sell and transfer its inventory of Bt8.2bn and projects under construction worth Bt4.45bn (at end‐2Q17) to be completed in 2H17E and 2018E, should help its transfers reach our forecast. 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 (%)
2014 12,867 2,021 1.37 (13.2) 1.37 (13.2) 0.80 7.05 2014 8.4 8.4 8.6 1.6 7.0 20.2 52.4
2015 16,627 2,413 1.64 19.4 1.64 19.4 0.90 7.85 2015 7.0 7.0 6.7 1.5 7.8 22.0 37.9
2016 14,602 2,176 1.47 (9.8) 1.46 (10.4) 0.90 8.41 2016 7.8 7.9 7.5 1.4 7.8 18.1 29.7
66 (0) 2624‐6248
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 11,588 1,623 1.10 (25.4) 1.10 (24.9) 0.55 8.76 2017E 10.5 10.5 10.3 1.3 4.8 12.8 37.8
2018E 13,662 1,947 1.32 20.0 1.32 20.0 0.66 9.38 2018E 8.7 8.7 9.2 1.2 5.7 14.6 45.1
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
2Q17
1Q17
2Q17
% YoY
% QoQ
1H17
% YoY
2017E
% YoY
Revenue from project sales Total revenue Gross profit
4,981 5,163 1,635
2,266 2,473 758
1,817 2,038 626
(63.5) (60.5) (61.7)
(19.8) (17.6) (17.4)
4,084 4,511 1,384
(55.8) (52.9) (53.7)
10,788 11,588 3,431
(22.1) (20.6) (24.8)
YTD (% 2017E) 37.9 38.9 40.3
EBITDA
1,097
422
333
(69.6)
(21.0)
755
(62.2)
2,113
(23.8)
35.7
Interest expense
(1)
(2)
(1)
65.0
(22.7)
(3)
(30.8)
(15)
161.7
19.2
Other income
8
1
5
(29.1)
484.6
6
(46.8)
21
(21.9)
30.1
(220)
(89)
(71)
(67.7)
(20.0)
(160)
60.7
(431)
(23.0)
37.1
880
315
249
(71.7)
(21.1)
564
(64.4)
1,623
(25.4)
34.8
Income tax Net profit (loss)
Core net profit (loss)
865
315
249
(71.2)
(21.1)
564
(64.1)
1,623
(24.9)
34.8
Reported EPS (THB)
0.60
0.21
0.17
(71.7)
(21.1)
0.38
(64.4)
1.10
(25.4)
34.8
Core EPS (THB)
0.59
0.21
0.17
(71.2)
(21.1)
0.38
(64.1)
1.10
(24.9)
34.8
Gross margin – project sales (%)
31.8
30.2
30.3
30.2
29.5
Gross margin ‐ overall (%)
31.7
30.6
30.7
30.7
29.6
EBITDA margin (%)
21.2
17.1
16.3
16.7
18.2
Net margin (%)
17.0
12.7
12.2
12.5
14.0
Current ratio (x)
2.8
2.6
2.6
3.8
249.2
251.8
250.3
137.3
Debt / equity (x)
3.9 1,419 .9 0.5
0.7
0.7
0.7
0.6
BVPS (Bt)
8.31
8.03
8.22
8.22
8.76
ROE (%)
24.4
14.7
9.6
9.6
12.8
Interest coverage (x)
Source: LPN, KT ZMICO Research Figure 2: Presales
Figure 3: Condo completion schedule
Btmn
Btmn
10,000
3,500
9,000
3,000
8,000 7,000
2,500
6,000
2,000
5,000 4,000
1,500
3,000
1,000
2,000
500
1,000
Source: LPN, KT ZMICO Research
6M17
6M16
2Q17
2Q17
1Q17
4Q16
3Q16
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
‐
‐ 1Q17
2Q17
3Q17
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
4Q17
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 (%)
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) 3,167 47 3,120 (11) 35 3,121 (707) 0 0 0 2,413 1.64 1.64 2,413 1.64 0.90
2016 14,602 (10,041) 4,560 (1,867) 2,772 51 2,721 (6) 27 2,737 (561) 0 15 0 2,176 1.47 1.47 2,161 1.46 0.90
2017E 11,588 (8,157) 3,431 (1,393) 2,113 53 2,059 (15) 21 2,054 (431) 0 0 0 1,623 1.10 1.10 1,623 1.10 0.55
2018E 13,662 (9,554) 4,108 (1,659) 2,530 55 2,475 (20) 26 2,465 (518) 0 0 0 1,947 1.32 1.32 1,947 1.32 0.66
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
2016 621 226 8,511 1,980 6,645 18,558 3,183 1,126 6,147 1,476 12,411 18,558
2017E 500 174 5,587 2,016 11,453 20,062 3,160 2,224 7,138 1,476 12,924 20,062
2018E 500 205 6,544 2,051 12,939 22,614 5,164 1,575 8,775 1,476 13,839 22,614
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) 47 379 2,647 (322) 66 (256) (1,444) 0 (1,240) 0 (2,684) (292) 2,556 1.73
2016 2,176 (330) 51 313 2,210 (181) (30) (212) (837) 0 (1,328) 0 (2,165) (167) 2,521 1.71
2017E 1,623 25 53 (1,914) (213) (49) 30 (19) 670 0 (1,107) 577 140 (91) (286) (0.19)
2018E 1,947 25 55 (2,256) (228) (49) 0 (49) 1,740 0 (1,033) (430) 277 0 (301) (0.20)
2014 (10.3) (13.0) (13.2) 32.4 20.2 19.9 15.7 15.7 20.9
2015 29.2 21.8 19.4 31.0 19.0 18.8 14.5 14.5 22.7
2016 (12.2) (12.5) (9.8) 31.2 19.0 18.6 14.9 14.8 20.5
2017E (20.6) (23.8) (25.4) 29.6 18.2 17.8 14.0 14.0 21.0
2018E 17.9 19.7 20.0 30.1 18.5 18.1 14.3 14.3 21.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note:
KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD. Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD)
Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
Earnings Review
Close Bt11.50
Property Development August 11, 2017
Beat forecast /Below forecast /In line
2Q17 earnings declined 71.7% YoY and 21.1% QoQ Results date: August 10, 2017 Price Performance (%) Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
1.019
1.298
KT ZMICO vs. consensus Share data
7.9%
1.7%
Reuters / Bloomberg
LPN.BK/ LPN TB
Paid‐up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
17.00/510.00
Foreign limit / actual (%)
39.00/33.88
52 week High / Low (Bt)
13.60/9.80
Avg. daily T/O (shares 000) NVDR (%)
7,779.00 4.78
Estimated free float (%)
81.17
Beta
1.02
URL
www.lpn.co.th
CGR
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected]
Level 4 (Certified)
Switch to Underperform with the 18E TP at Bt12 We maintain our 2017‐18E net profit, with backlog already secured by 70% and 38% of the 2017‐18E transfer forecasts, respectively. We roll over the TP to the 18E TP of Bt12 (PER 9X, PEG 0.45X) from the 17E TP of Bt9 and switch our rating from Sell to Underperform as the current price still has limited upside to our 18E TP and the 1H17 dividend yield of 1.3% is not very attractive. 2Q17 earnings declined 71.7% YoY and 21.1% QoQ LPN reported 2Q17 net profit at Bt249mn (‐71.7% YoY, ‐21.1% QoQ), 5% below our estimate, mainly due to lower‐than‐expected transfers by 4%. 2Q17 transfers were Bt1.82bn, decreasing 63.5% YoY and 19.8% QoQ from a lower backlog to be transferred in the period. The average GPM was in line at 30.7%. SG&A expenses to revenue were 15.4%, above our assumption at 14.9% due to a lower‐than‐expected transfer base. Maintain 2017E forecast LPN’s 1H17 net profit was 35% of our 2017E forecast, which we maintain at Bt1.6bn (‐25.4% YoY). We expect the net profit trend to soften QoQ in 3Q17E before recovering QoQ in 4Q17E. Announced 1H17 DPS of Bt0.15, implying 1.3% yield LPN announced an interim DPS of Bt0.15 for its 1H17 performance, implying a 1.3% yield. The stock will go XD on August 22 and the dividend will be paid on September 7, 2017. 7M17 presales secured 53% of full‐year target LPN reported 7M17 presales at Bt10.7bn, securing 53% of its 2017 presales target of Bt20bn. LPN plans to launch three projects worth Bt5.1bn in 4Q17E and postpone one premium house project worth Bt3.1bn to instead be launched in 2018. Hence, we expect that LPN’s full‐ year presales will be lower than its target by 17% at around Bt16.5bn from a lower launch value. LPN started its plan to sell its stock with the help of the company’s sales promotions and via Thai and foreign agencies from end Jun‐17, enabling LPN to sell inventory of Bt943mn in Jul‐17. Hence, we maintain our 2017‐18E transfers because LPN’s plan to sell and transfer its inventory of Bt8.2bn and projects under construction worth Bt4.45bn (at end‐2Q17) to be completed in 2H17E and 2018E, should help its transfers reach our forecast. 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 (%)
2014 12,867 2,021 1.37 (13.2) 1.37 (13.2) 0.80 7.05 2014 8.4 8.4 8.6 1.6 7.0 20.2 52.4
2015 16,627 2,413 1.64 19.4 1.64 19.4 0.90 7.85 2015 7.0 7.0 6.7 1.5 7.8 22.0 37.9
2016 14,602 2,176 1.47 (9.8) 1.46 (10.4) 0.90 8.41 2016 7.8 7.9 7.5 1.4 7.8 18.1 29.7
66 (0) 2624‐6248
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 11,588 1,623 1.10 (25.4) 1.10 (24.9) 0.55 8.76 2017E 10.5 10.5 10.3 1.3 4.8 12.8 37.8
2018E 13,662 1,947 1.32 20.0 1.32 20.0 0.66 9.38 2018E 8.7 8.7 9.2 1.2 5.7 14.6 45.1
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
2Q17
1Q17
2Q17
% YoY
% QoQ
1H17
% YoY
2017E
% YoY
Revenue from project sales Total revenue Gross profit
4,981 5,163 1,635
2,266 2,473 758
1,817 2,038 626
(63.5) (60.5) (61.7)
(19.8) (17.6) (17.4)
4,084 4,511 1,384
(55.8) (52.9) (53.7)
10,788 11,588 3,431
(22.1) (20.6) (24.8)
YTD (% 2017E) 37.9 38.9 40.3
EBITDA
1,097
422
333
(69.6)
(21.0)
755
(62.2)
2,113
(23.8)
35.7
Interest expense
(1)
(2)
(1)
65.0
(22.7)
(3)
(30.8)
(15)
161.7
19.2
Other income
8
1
5
(29.1)
484.6
6
(46.8)
21
(21.9)
30.1
(220)
(89)
(71)
(67.7)
(20.0)
(160)
60.7
(431)
(23.0)
37.1
880
315
249
(71.7)
(21.1)
564
(64.4)
1,623
(25.4)
34.8
Income tax Net profit (loss)
Core net profit (loss)
865
315
249
(71.2)
(21.1)
564
(64.1)
1,623
(24.9)
34.8
Reported EPS (THB)
0.60
0.21
0.17
(71.7)
(21.1)
0.38
(64.4)
1.10
(25.4)
34.8
Core EPS (THB)
0.59
0.21
0.17
(71.2)
(21.1)
0.38
(64.1)
1.10
(24.9)
34.8
Gross margin – project sales (%)
31.8
30.2
30.3
30.2
29.5
Gross margin ‐ overall (%)
31.7
30.6
30.7
30.7
29.6
EBITDA margin (%)
21.2
17.1
16.3
16.7
18.2
Net margin (%)
17.0
12.7
12.2
12.5
14.0
Current ratio (x)
2.8
2.6
2.6
3.8
249.2
251.8
250.3
137.3
Debt / equity (x)
3.9 1,419 .9 0.5
0.7
0.7
0.7
0.6
BVPS (Bt)
8.31
8.03
8.22
8.22
8.76
ROE (%)
24.4
14.7
9.6
9.6
12.8
Interest coverage (x)
Source: LPN, KT ZMICO Research Figure 2: Presales
Figure 3: Condo completion schedule
Btmn
Btmn
10,000
3,500
9,000
3,000
8,000 7,000
2,500
6,000
2,000
5,000 4,000
1,500
3,000
1,000
2,000
500
1,000
Source: LPN, KT ZMICO Research
6M17
6M16
2Q17
2Q17
1Q17
4Q16
3Q16
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
‐
‐ 1Q17
2Q17
3Q17
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
4Q17
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 (%)
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) 3,167 47 3,120 (11) 35 3,121 (707) 0 0 0 2,413 1.64 1.64 2,413 1.64 0.90
2016 14,602 (10,041) 4,560 (1,867) 2,772 51 2,721 (6) 27 2,737 (561) 0 15 0 2,176 1.47 1.47 2,161 1.46 0.90
2017E 11,588 (8,157) 3,431 (1,393) 2,113 53 2,059 (15) 21 2,054 (431) 0 0 0 1,623 1.10 1.10 1,623 1.10 0.55
2018E 13,662 (9,554) 4,108 (1,659) 2,530 55 2,475 (20) 26 2,465 (518) 0 0 0 1,947 1.32 1.32 1,947 1.32 0.66
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
2016 621 226 8,511 1,980 6,645 18,558 3,183 1,126 6,147 1,476 12,411 18,558
2017E 500 174 5,587 2,016 11,453 20,062 3,160 2,224 7,138 1,476 12,924 20,062
2018E 500 205 6,544 2,051 12,939 22,614 5,164 1,575 8,775 1,476 13,839 22,614
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) 47 379 2,647 (322) 66 (256) (1,444) 0 (1,240) 0 (2,684) (292) 2,556 1.73
2016 2,176 (330) 51 313 2,210 (181) (30) (212) (837) 0 (1,328) 0 (2,165) (167) 2,521 1.71
2017E 1,623 25 53 (1,914) (213) (49) 30 (19) 670 0 (1,107) 577 140 (91) (286) (0.19)
2018E 1,947 25 55 (2,256) (228) (49) 0 (49) 1,740 0 (1,033) (430) 277 0 (301) (0.20)
2014 (10.3) (13.0) (13.2) 32.4 20.2 19.9 15.7 15.7 20.9
2015 29.2 21.8 19.4 31.0 19.0 18.8 14.5 14.5 22.7
2016 (12.2) (12.5) (9.8) 31.2 19.0 18.6 14.9 14.8 20.5
2017E (20.6) (23.8) (25.4) 29.6 18.2 17.8 14.0 14.0 21.0
2018E 17.9 19.7 20.0 30.1 18.5 18.1 14.3 14.3 21.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note:
KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD. Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD)
Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
