LPN Development
L.P.N. Development Sell (17E TP Bt10.00) Company Update
Close Bt12.70
Earnings upgrade /Earnings downgrade /Overview unchanged
Property Development January 31, 2017
2017E presales target to rise 135% YoY; transfer target to decline 17% Price Performance (%) Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
1.526
1.147
KT ZMICO vs. consensus Share data
3.5%
9.0%
Reuters / Bloomberg
LPN.BK/ LPN TB
Paid‐up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
19.00/531.00
Foreign limit / actual (%)
39.00/24.34
52 week High / Low (Bt)
14.80/9.80
Avg. daily T/O (shares 000) NVDR (%)
8,043.00 6.11
Estimated free float (%)
75.51
Beta
0.72
URL
www.lpn.co.th
CGR
Maintain Sell with the 17E TP at Bt10 We maintain a sell rating for LPN with the 17E TP at Bt10. LPN’s current share price is fully valued. Although the 2017E new launches will drive 2017E presales, inventory and condos to be finished in 2017E worth Bt14bn, which are in the low‐end segment, will remain a burden as its target group is still experiencing a financial source problem. Launching more projects in 2017E, mainly in mid‐to‐high segments LPN targets 2017E condo presales at Bt20bn, aggressive growth of 135% YoY from Bt8.5bn (‐41.5% YoY) in 2016E, and low‐rise presales at Bt2bn (+43% YoY). LPN plans to launch 12 projects worth Bt20bn. LPN aims to penetrate the mid‐to‐high income segments with the Lumpini Suite and Lumini Place brands worth around Bt15bn or 75% of the project launch value. The locations of the projects will move into the city aimed at high demand areas. Almost sold out units launched in the first two projects LPN launched its first two projects in the third week of Jan‐17. The first one was Lumpini Phetchaburi‐Makkasan, which launched 35% of the total project value of Bt2.3bn and almost sold out. Another 45% will be sold to foreign buyers via a Chinese agent and the remaining 20% of the project value will be sold later. The second project is Lumpini Place Bangna K.M.3, which launched 85% of the project value of Bt900mn and is sold out. 2017E transfer target to decrease around 17% YoY LPN’s 2017E overall transfer target is Bt11.5bn (‐17% YoY), comprising condos at Bt10bn and low‐rise at Bt1.5bn. The 2017E transfer target is conservative and declines YoY as LPN has 2017E backlog of only Bt1.7bn. To meet the target, LPN has to sell and transfer more of its inventory and condos to be finished in 2017E worth Bt14bn along with new 2017E project launches worth Bt4bn that LPN expects to sell and realize some portion of revenue within 2017E. Expanding construction service to other developers LPN plans to change its shareholding in Lumpini Project Management Service Co., Ltd. (LPS), which provides construction service and management for the LPN group, from 99.93% to 20%. The purpose is to give more flexibility for LPS to change into being a real estate development service provider for the LPN group and other property developers and provide more opportunities to generate additional income in the future. LPN is currently in negotiations with property development companies and will announce the details after the deal is completed. Maintain 2016‐17E forecasts We maintain our view that 2016‐17E net profit will decline 3.4% and 20.8% YoY, respectively, as most of LPN’s ready‐to‐move projects and condos to be finished in 2017E worth around Bt14bn are still in the low‐ end segment, which is struggling due to banks’ tightening of housing loan approvals.
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Financials and Valuation Level 2 (Declared)
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 9.3 9.3 9.3 1.8 6.3 20.2 52.4
2015 16,627 2,413 1.64 19.4 1.64 19.4 0.90 7.85 2015 7.8 7.8 7.3 1.6 7.1 22.0 37.9
2016E 15,313 2,332 1.58 (3.4) 1.57 (4.0) 0.85 8.53 2016E 8.0 8.1 7.2 1.5 6.7 19.3 20.1
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 13,338 1,847 1.25 (20.8) 1.25 (20.3) 0.63 8.93 2017E 10.1 10.1 9.2 1.4 4.9 14.3 24.5
2018E 13,704 1,942 1.32 5.2 1.32 5.2 0.66 9.62 2018E 9.7 9.7 9.2 1.3 5.2 14.2 31.9
Figure 1: Quarterly earnings preview Profit and Loss (Btmn) FY Ended 31 Dec 4Q15
3Q16
4Q16E
% YoY
% QoQ
3,042 3,223 1,021
2,272 2,465 785
3,070 3,261 1,000
0.9 1.2 (2.0)
EBITDA
451
405
571
Interest expense
(1)
(1)
Revenue from project sales Total revenue Gross profit
Other income
2015
2016E
% YoY
35.1 32.3 27.4
15,981 16,627 5,151
14,575 15,313 4,777
(8.8) (7.9) (7.3)
26.6
40.9
3,167
2,973
(6.1)
(3)
152.2
124.7
(11)
(7)
(37.8)
9
5
7
(21.4)
42.7
35
25
(29.2)
(149)
(82)
(119)
(20.1)
44.7
(707)
(609)
(13.9)
Net profit (loss)
288
310
437
51.8
41.3
2,413
2,332
(3.4)
Core net profit (loss)
288
310
437
51.8
41.3
2,413
2,316
(4.0)
Reported EPS (THB)
0.20
0.21
0.30
51.8
41.3
1.64
1.58
(3.4)
Core EPS (THB)
0.20
0.21
0.30
51.8
41.3
1.64
1.57
(4.0)
Income tax
Gross margin – project sales (%)
31.5
31.7
30.5
31.1
31.2
Gross margin ‐ overall (%)
31.7
31.9
30.7
31.0
31.2
EBITDA margin (%)
14.0
16.4
17.5
19.0
19.4
Net margin (%)
8.9
12.6
13.4
14.5
15.2
Current ratio (x)
3.1
3.4
4.4
3.1
4.4
330.9
266.1
168.4
277.3
418.1
Debt / equity (x)
0.7
0.5
0.5
0.7
0.5
BVPS (Bt)
7.85
8.22
8.53
7.85
8.53
ROE (%)
21.1
17.9
19.2
22.0
19.3
Interest coverage (x)
Source: LPN, KT ZMICO Research Figure 2: Quarterly presales
Figure 3: Condo completion schedule
16,000
Btmn 12,000
14,000
10,000
Btmn
12,000
8,000
10,000
6,000
8,000 6,000
4,000
4,000
2,000
2,000
Source: LPN, KT ZMICO Research
2016
2015
4Q16
3Q16
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
‐
‐ 1Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q17
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
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
2016E 15,313 (10,536) 4,777 (1,875) 2,973 46 2,927 (7) 25 2,941 (609) 0 16 0 2,332 1.58 1.58 2,316 1.57 0.85
2017E 13,338 (9,391) 3,947 (1,629) 2,390 48 2,343 (15) 24 2,338 (491) 0 0 0 1,847 1.25 1.25 1,847 1.25 0.63
2018E 13,704 (9,583) 4,121 (1,678) 2,518 50 2,468 (20) 26 2,458 (516) 0 0 0 1,942 1.32 1.32 1,942 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
2016E 514 214 8,082 2,046 7,093 18,341 1,128 1,910 5,755 1,476 12,586 18,341
2017E 500 187 5,145 2,088 11,102 19,366 1,798 1,930 6,187 1,476 13,178 19,366
2018E 500 192 5,251 2,129 13,346 21,759 3,617 1,414 7,562 1,476 14,197 21,759
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
2016E 2,332 22 46 844 3,244 (49) 0 (49) (2,860) 0 (1,328) 749 (3,440) (245) 3,174 2.15
2017E 1,847 23 48 (1,313) 604 (49) 0 (49) 1,285 0 (1,254) (600) (569) (14) 533 0.36
2018E 1,942 23 50 (2,320) (306) (49) 0 (49) 1,549 0 (923) (271) 355 0 (377) (0.26)
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
2016E (7.9) (6.1) (3.4) 31.2 19.4 19.1 15.2 15.1 20.7
2017E (12.9) (19.6) (20.8) 29.6 17.9 17.6 13.8 13.8 21.0
2018E 2.7 5.3 5.2 30.1 18.4 18.0 14.2 14.2 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, CRANE. KT ZMICO is a co underwriter of RPH.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 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
Close Bt12.70
Earnings upgrade /Earnings downgrade /Overview unchanged
Property Development January 31, 2017
2017E presales target to rise 135% YoY; transfer target to decline 17% Price Performance (%) Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
1.526
1.147
KT ZMICO vs. consensus Share data
3.5%
9.0%
Reuters / Bloomberg
LPN.BK/ LPN TB
Paid‐up Shares (m)
1,475.70
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
19.00/531.00
Foreign limit / actual (%)
39.00/24.34
52 week High / Low (Bt)
14.80/9.80
Avg. daily T/O (shares 000) NVDR (%)
8,043.00 6.11
Estimated free float (%)
75.51
Beta
0.72
URL
www.lpn.co.th
CGR
Maintain Sell with the 17E TP at Bt10 We maintain a sell rating for LPN with the 17E TP at Bt10. LPN’s current share price is fully valued. Although the 2017E new launches will drive 2017E presales, inventory and condos to be finished in 2017E worth Bt14bn, which are in the low‐end segment, will remain a burden as its target group is still experiencing a financial source problem. Launching more projects in 2017E, mainly in mid‐to‐high segments LPN targets 2017E condo presales at Bt20bn, aggressive growth of 135% YoY from Bt8.5bn (‐41.5% YoY) in 2016E, and low‐rise presales at Bt2bn (+43% YoY). LPN plans to launch 12 projects worth Bt20bn. LPN aims to penetrate the mid‐to‐high income segments with the Lumpini Suite and Lumini Place brands worth around Bt15bn or 75% of the project launch value. The locations of the projects will move into the city aimed at high demand areas. Almost sold out units launched in the first two projects LPN launched its first two projects in the third week of Jan‐17. The first one was Lumpini Phetchaburi‐Makkasan, which launched 35% of the total project value of Bt2.3bn and almost sold out. Another 45% will be sold to foreign buyers via a Chinese agent and the remaining 20% of the project value will be sold later. The second project is Lumpini Place Bangna K.M.3, which launched 85% of the project value of Bt900mn and is sold out. 2017E transfer target to decrease around 17% YoY LPN’s 2017E overall transfer target is Bt11.5bn (‐17% YoY), comprising condos at Bt10bn and low‐rise at Bt1.5bn. The 2017E transfer target is conservative and declines YoY as LPN has 2017E backlog of only Bt1.7bn. To meet the target, LPN has to sell and transfer more of its inventory and condos to be finished in 2017E worth Bt14bn along with new 2017E project launches worth Bt4bn that LPN expects to sell and realize some portion of revenue within 2017E. Expanding construction service to other developers LPN plans to change its shareholding in Lumpini Project Management Service Co., Ltd. (LPS), which provides construction service and management for the LPN group, from 99.93% to 20%. The purpose is to give more flexibility for LPS to change into being a real estate development service provider for the LPN group and other property developers and provide more opportunities to generate additional income in the future. LPN is currently in negotiations with property development companies and will announce the details after the deal is completed. Maintain 2016‐17E forecasts We maintain our view that 2016‐17E net profit will decline 3.4% and 20.8% YoY, respectively, as most of LPN’s ready‐to‐move projects and condos to be finished in 2017E worth around Bt14bn are still in the low‐ end segment, which is struggling due to banks’ tightening of housing loan approvals.
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
Financials and Valuation Level 2 (Declared)
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 9.3 9.3 9.3 1.8 6.3 20.2 52.4
2015 16,627 2,413 1.64 19.4 1.64 19.4 0.90 7.85 2015 7.8 7.8 7.3 1.6 7.1 22.0 37.9
2016E 15,313 2,332 1.58 (3.4) 1.57 (4.0) 0.85 8.53 2016E 8.0 8.1 7.2 1.5 6.7 19.3 20.1
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 13,338 1,847 1.25 (20.8) 1.25 (20.3) 0.63 8.93 2017E 10.1 10.1 9.2 1.4 4.9 14.3 24.5
2018E 13,704 1,942 1.32 5.2 1.32 5.2 0.66 9.62 2018E 9.7 9.7 9.2 1.3 5.2 14.2 31.9
Figure 1: Quarterly earnings preview Profit and Loss (Btmn) FY Ended 31 Dec 4Q15
3Q16
4Q16E
% YoY
% QoQ
3,042 3,223 1,021
2,272 2,465 785
3,070 3,261 1,000
0.9 1.2 (2.0)
EBITDA
451
405
571
Interest expense
(1)
(1)
Revenue from project sales Total revenue Gross profit
Other income
2015
2016E
% YoY
35.1 32.3 27.4
15,981 16,627 5,151
14,575 15,313 4,777
(8.8) (7.9) (7.3)
26.6
40.9
3,167
2,973
(6.1)
(3)
152.2
124.7
(11)
(7)
(37.8)
9
5
7
(21.4)
42.7
35
25
(29.2)
(149)
(82)
(119)
(20.1)
44.7
(707)
(609)
(13.9)
Net profit (loss)
288
310
437
51.8
41.3
2,413
2,332
(3.4)
Core net profit (loss)
288
310
437
51.8
41.3
2,413
2,316
(4.0)
Reported EPS (THB)
0.20
0.21
0.30
51.8
41.3
1.64
1.58
(3.4)
Core EPS (THB)
0.20
0.21
0.30
51.8
41.3
1.64
1.57
(4.0)
Income tax
Gross margin – project sales (%)
31.5
31.7
30.5
31.1
31.2
Gross margin ‐ overall (%)
31.7
31.9
30.7
31.0
31.2
EBITDA margin (%)
14.0
16.4
17.5
19.0
19.4
Net margin (%)
8.9
12.6
13.4
14.5
15.2
Current ratio (x)
3.1
3.4
4.4
3.1
4.4
330.9
266.1
168.4
277.3
418.1
Debt / equity (x)
0.7
0.5
0.5
0.7
0.5
BVPS (Bt)
7.85
8.22
8.53
7.85
8.53
ROE (%)
21.1
17.9
19.2
22.0
19.3
Interest coverage (x)
Source: LPN, KT ZMICO Research Figure 2: Quarterly presales
Figure 3: Condo completion schedule
16,000
Btmn 12,000
14,000
10,000
Btmn
12,000
8,000
10,000
6,000
8,000 6,000
4,000
4,000
2,000
2,000
Source: LPN, KT ZMICO Research
2016
2015
4Q16
3Q16
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
‐
‐ 1Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q17
Source: LPN, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
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
2016E 15,313 (10,536) 4,777 (1,875) 2,973 46 2,927 (7) 25 2,941 (609) 0 16 0 2,332 1.58 1.58 2,316 1.57 0.85
2017E 13,338 (9,391) 3,947 (1,629) 2,390 48 2,343 (15) 24 2,338 (491) 0 0 0 1,847 1.25 1.25 1,847 1.25 0.63
2018E 13,704 (9,583) 4,121 (1,678) 2,518 50 2,468 (20) 26 2,458 (516) 0 0 0 1,942 1.32 1.32 1,942 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
2016E 514 214 8,082 2,046 7,093 18,341 1,128 1,910 5,755 1,476 12,586 18,341
2017E 500 187 5,145 2,088 11,102 19,366 1,798 1,930 6,187 1,476 13,178 19,366
2018E 500 192 5,251 2,129 13,346 21,759 3,617 1,414 7,562 1,476 14,197 21,759
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
2016E 2,332 22 46 844 3,244 (49) 0 (49) (2,860) 0 (1,328) 749 (3,440) (245) 3,174 2.15
2017E 1,847 23 48 (1,313) 604 (49) 0 (49) 1,285 0 (1,254) (600) (569) (14) 533 0.36
2018E 1,942 23 50 (2,320) (306) (49) 0 (49) 1,549 0 (923) (271) 355 0 (377) (0.26)
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
2016E (7.9) (6.1) (3.4) 31.2 19.4 19.1 15.2 15.1 20.7
2017E (12.9) (19.6) (20.8) 29.6 17.9 17.6 13.8 13.8 21.0
2018E 2.7 5.3 5.2 30.1 18.4 18.0 14.2 14.2 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, CRANE. KT ZMICO is a co underwriter of RPH.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 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
