Origin Property Outperform (17E TP Bt15.60) - Global Alliance Partners
Origin Property Outperform (17E TP Bt15.60) Company Update
Close Bt14.30
Property Development
Earnings upgrade/Earnings downgrade/Overview unchanged
July 17, 2017
2Q17E earnings to increase 200.3% YoY and 27.7% QoQ Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.908
1.448
KT ZMICO vs. consensus Share data
32.2%
16.7%
Reuters / Bloomberg
ORI.BK/ORI TB
Paid‐up Shares (m)
1,542.74
Par (Bt)
0.50
Market cap (Bt bn / US$ m)
22.00/654.00
Foreign limit / actual (%)
49.00/6.31
52 week High / Low (Bt)
16.00/3.94
Avg. daily T/O (shares 000) NVDR (%)
5,285.00 1.04
Estimated free float (%)
21.37
Beta
2.35
URL
www.origin.co.th
CGR
Anti‐corruption
Maintain 2017E TP at Bt15.6 and Outperform rating We maintain our 2017E TP at Bt15.6 and an Outperform rating. We expect ORI’s 2Q17E to better both YoY and QoQ and the approval of shareholderes to acquire the Proud Residence will boost ORI’s 2017‐18E net profit by 206.7% YoY and 40.5% YoY, respecitvely, from the consolidation of the Park 24 project under Proud Residence from 4Q17E. 2Q17 presales rose 56.6% YoY and 92.7% QoQ ORI’s 2Q17 presales were Bt2.76bn, rising 56.6% YoY and 92.7% QoQ, mainly derived from current projects available for sales of Bt21.8bn at end‐1Q17. Meanwhile, ORI launched four projects worth Bt8.4bn on Jun 17, 17, which had an average take‐up rate of 40% or around Bt3.4bn. ORI expects to book this amount as presales after signing the contracts with customers in 3Q17E. In addition, ORI’s 1H17 presales were Bt4.2bn, increasing 41.4% YoY and securing 32% of its 2017 presales target, which we maintain at Bt13bn as ORI will launch 3‐4 more projects worth Bt6‐ 7bn in 2H17E. 2Q17E earnings to increase 200.3% YoY and 27.7% QoQ We expect 2Q17E net profit at Bt220mn (+200.3% YoY, +27.7% QoQ). The net profit growth should be driven by 2Q17E transfers of Bt1.12bn (+138.9% YoY, +30.4% QoQ), which were from continuing transfers of existing projects. ORI’s shareholders approved the acquisition of Proud Residence The shareholders’ meeting on Jul 12, 17 approved the acquisition of all shares of Proud Residence Co., Ltd. with the amount of 10mn shares at par of Bt100 and a price of Bt400 per share, for a total of Bt4bn, from the existing shareholders. The shareholders also approved the allocation of 81.2mn shares at Bt12.3157 to existing shareholders of Proud Residence for a total transaction value of Bt999.99mn. The subscription period is scheduled for 31 July to 3 October 2017. This will create a dilution effect of around 5%. Subsequently, ORI should begin to realize revenue from the Park 24 project under Proud Residence in 4Q17E. Maintain 2017‐18E net profit growth 206.7% YoY and 40.5% YoY We maintain our 2017‐18E net profit at Bt1.96bn (+206.7% YoY) and Bt2.74bn (+40.5% YoY), respectively, mainly boosted by revenue realization from Park 24 after ORI starts consolidating this project in 4Q17E. Financials and Valuation
n.a.
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
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 550 70 0.16 9.7 0.2 9.7 0.19 0.64 2014 91.5 91.5 73.3 22.4 1.3 23.9 347.2
2015 2,010 386 0.64 312.1 0.6 312.1 0.22 2.91 2015 22.2 22.2 16.9 4.9 1.5 38.0 22.7
2016 3,153 638 0.58 (10.1) 0.58 (10.1) 0.71 2.49 2016 24.7 24.7 20.8 5.7 5.0 28.4 0.7
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2017E 8,637 1,955 1.20 107.9 1.2 107.9 0.48 3.17 2017E 11.9 11.9 11.3 4.5 3.4 49.5 184.4
2018E 12,073 2,747 1.69 40.4 1.7 40.4 0.68 4.19 2018E 8.5 8.5 8.2 3.4 4.7 45.9 125.6
Figure 1: Quarterly earnings preview Profit and Loss (Btmn)
2Q16
1Q17
2Q17E
% YoY
% QoQ
1H17E
% YoY
2017E
% YoY
Revenue from project sales Total revenue Gross profit
471 471 207
863 863 403
1,125 1,125 512
138.9 138.9 147.7
30.4 30.4 26.9
1,988 1,988 915
100.5 100.5 106.8
8,637 8,637 3,541
173.9 173.9 147.8
YTD (% 2017E) 23.0 23.0 25.8
EBITDA
105
230
294
179.2
27.7
523
131.8
2,887
239.7
18.1
Interest expense
(2)
(0)
(2)
(25.3)
2,604.6
(2)
37.7
(52)
664.5
3.3
Other income
18
15
10
(44.4)
(34.3)
25
(13.7)
108
134.9
23.4
(21)
(47)
(59)
187.3
26.5
(106)
(143.9)
(521)
221.5
20.3
73
172
220
200.3
27.7
391
142.5
1,955
206.7
20.0
FY Ended 31 Dec
Income tax Net profit (loss)
Core net profit (loss)
73
172
220
200.3
27.7
391
142.5
1,955
206.7
20.0
Reported EPS (THB)
0.11
0.16
0.14
28.5
(8.9)
0.30
15.7
1.20
107.9
24.8
Core EPS (THB)
0.11
0.16
0.14
28.5
(8.9)
0.30
15.7
1.20
107.9
24.8
Gross margin – project sales (%)
43.9
46.7
45.5
46.7
41.0
Gross margin ‐ overall (%)
43.9
46.7
45.5
46.0
41.0
EBITDA margin (%)
22.3
26.6
26.1
26.3
33.4
Net margin (%)
15.5
19.9
19.5
19.7
22.6
Current ratio (x)
0.9
0.6
0.0
0.0
1.7
Interest coverage (x)
43.3
3,583.0
171.1
292.8
48.8
Debt / equity (x)
1.4
1.9
‐
‐
2.5
BVPS (Bt)
2.75
2.15
‐
‐
3.2
ROE (%)
17.4
25.5
‐
‐
49.5
Source: SIRI, KT ZMICO Research Figure 2: Presales
Figure 3: Backlog after including Park 24’s backlog
Btmn 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 ‐
Source: ORI, KT ZMICO Research
2017E 7,679 89% of 17E transfers
Backlog Bt23.9bn
1H17
1H16
2Q17
1Q17
4Q16
3Q16
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
2019E 7,399 55% of 19E transfers
2018E 8,852 74% of 18E transfers Source: ORI, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 4: The project under development of Proud Residence No. Details 1 Project name Park 24 2
Area for sale
77,000 sq.m.
3
Project value
4
No. of units
THB 17,000 million (with the backlog value of approximately THB 10,900 million), divided into: Phase 1: THB 5,900 million (with the backlog value of approximately THB 4,500 million) Phase 2: THB 11,100 million (with the backlog value of approximately THB 6,400 million) 2,072 units, divided into: Phase 1: 832 units (excluding condominium for commercial purposes of 4 units) Phase 2: 1,240 units
5
Progress
Phase 1: Under construction, approximately 70% complete Phase 2: Under construction, approximately 35% complete
Source: ORI Information Memorandum on Asset Acquisition of the company
Figure 5: Shareholding structure of Proud Residence
Source: Source: ORI Information Memorandum on Asset Acquisition of the company
Figure 6: Park 24 status and schedule
Source: ORI
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 (%)
2014 550 (320) 230 (148) 101 10 91 (2) 9 89 (18) 0 0 0 70 0.16 0.16 70 0.16 0.19
2015 2,010 (1,149) 861 (404) 530 28 502 (17) 45 485 (98) 0 0 0 386 0.64 0.64 386 0.64 0.22
2016 3,153 (1,724) 1,429 (666) 850 41 808 (7) 46 802 (162) 0 0 0 638 0.58 0.58 638 0.58 0.71
2017E 8,637 (5,096) 3,541 (1,116) 2,887 354 2,533 (52) 108 2,481 (521) 0 0 0 1,955 1.20 1.20 1,955 1.20 0.48
2018E 12,073 (7,244) 4,829 (1,405) 3,876 334 3,542 (56) 118 3,486 (732) 0 0 0 2,747 1.69 1.69 2,747 1.69 0.68
2014 38 1 0 56 1,784 1,910 688 346 1,623 225 287 1,910
2015 296 6 0 164 2,826 3,347 410 282 1,599 300 1,748 3,347
2016 621 11 0 373 5,637 6,758 753 1,823 4,015 551 2,743 6,758
2017E 0 26 0 419 14,637 18,044 5,008 4,494 12,892 812 5,152 18,044
2018E 234 36 0 456 16,248 19,769 6,503 2,286 12,957 813 6,812 19,769
2014 70 (59) 10 (530) (508) (32) 5 (28) 638 0 (84) 0 554 18 (479) (1.06)
2015 386 (38) 28 (698) (321) (144) 2 (141) (346) 1,317 (251) 0 720 258 (399) (0.67)
2016 638 (28) 41 (2,310) (1,659) (254) (98) (352) 1,887 553 (193) (12) 2,235 225 (1,870) (1.70)
2017E 1,955 0 354 (7,214) (4,905) (10,644) 100 (10,544) 4,742 1,231 (782) 0 5,190 (10,259) (15,549) (9.57)
2018E 2,747 0 334 (966) 2,116 (3,618) 0 (3,618) (4,082) 5 (1,099) 0 (5,176) (6,678) (1,502) (0.92)
2014 33.3 13.4 9.7 41.8 18.4 16.6 12.8 12.8 20.7
2015 265.3 422.9 312.1 42.9 26.4 25.0 19.2 19.2 20.3
2016 56.9 60.3 (10.1) 45.3 27.0 25.6 20.2 20.2 20.2
2017E 173.9 239.7 107.9 41.0 33.4 29.3 22.6 22.6 21.0
2018E 39.8 34.3 40.4 40.0 32.1 29.3 22.8 22.8 21.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
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, TFD. KT ZMICO is a co‐underwriter of the IPO of BGRIM.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59)
Good (scores: 70 – 79)
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 5 of 5
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 Bt14.30
Property Development
Earnings upgrade/Earnings downgrade/Overview unchanged
July 17, 2017
2Q17E earnings to increase 200.3% YoY and 27.7% QoQ Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.908
1.448
KT ZMICO vs. consensus Share data
32.2%
16.7%
Reuters / Bloomberg
ORI.BK/ORI TB
Paid‐up Shares (m)
1,542.74
Par (Bt)
0.50
Market cap (Bt bn / US$ m)
22.00/654.00
Foreign limit / actual (%)
49.00/6.31
52 week High / Low (Bt)
16.00/3.94
Avg. daily T/O (shares 000) NVDR (%)
5,285.00 1.04
Estimated free float (%)
21.37
Beta
2.35
URL
www.origin.co.th
CGR
Anti‐corruption
Maintain 2017E TP at Bt15.6 and Outperform rating We maintain our 2017E TP at Bt15.6 and an Outperform rating. We expect ORI’s 2Q17E to better both YoY and QoQ and the approval of shareholderes to acquire the Proud Residence will boost ORI’s 2017‐18E net profit by 206.7% YoY and 40.5% YoY, respecitvely, from the consolidation of the Park 24 project under Proud Residence from 4Q17E. 2Q17 presales rose 56.6% YoY and 92.7% QoQ ORI’s 2Q17 presales were Bt2.76bn, rising 56.6% YoY and 92.7% QoQ, mainly derived from current projects available for sales of Bt21.8bn at end‐1Q17. Meanwhile, ORI launched four projects worth Bt8.4bn on Jun 17, 17, which had an average take‐up rate of 40% or around Bt3.4bn. ORI expects to book this amount as presales after signing the contracts with customers in 3Q17E. In addition, ORI’s 1H17 presales were Bt4.2bn, increasing 41.4% YoY and securing 32% of its 2017 presales target, which we maintain at Bt13bn as ORI will launch 3‐4 more projects worth Bt6‐ 7bn in 2H17E. 2Q17E earnings to increase 200.3% YoY and 27.7% QoQ We expect 2Q17E net profit at Bt220mn (+200.3% YoY, +27.7% QoQ). The net profit growth should be driven by 2Q17E transfers of Bt1.12bn (+138.9% YoY, +30.4% QoQ), which were from continuing transfers of existing projects. ORI’s shareholders approved the acquisition of Proud Residence The shareholders’ meeting on Jul 12, 17 approved the acquisition of all shares of Proud Residence Co., Ltd. with the amount of 10mn shares at par of Bt100 and a price of Bt400 per share, for a total of Bt4bn, from the existing shareholders. The shareholders also approved the allocation of 81.2mn shares at Bt12.3157 to existing shareholders of Proud Residence for a total transaction value of Bt999.99mn. The subscription period is scheduled for 31 July to 3 October 2017. This will create a dilution effect of around 5%. Subsequently, ORI should begin to realize revenue from the Park 24 project under Proud Residence in 4Q17E. Maintain 2017‐18E net profit growth 206.7% YoY and 40.5% YoY We maintain our 2017‐18E net profit at Bt1.96bn (+206.7% YoY) and Bt2.74bn (+40.5% YoY), respectively, mainly boosted by revenue realization from Park 24 after ORI starts consolidating this project in 4Q17E. Financials and Valuation
n.a.
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
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 550 70 0.16 9.7 0.2 9.7 0.19 0.64 2014 91.5 91.5 73.3 22.4 1.3 23.9 347.2
2015 2,010 386 0.64 312.1 0.6 312.1 0.22 2.91 2015 22.2 22.2 16.9 4.9 1.5 38.0 22.7
2016 3,153 638 0.58 (10.1) 0.58 (10.1) 0.71 2.49 2016 24.7 24.7 20.8 5.7 5.0 28.4 0.7
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2017E 8,637 1,955 1.20 107.9 1.2 107.9 0.48 3.17 2017E 11.9 11.9 11.3 4.5 3.4 49.5 184.4
2018E 12,073 2,747 1.69 40.4 1.7 40.4 0.68 4.19 2018E 8.5 8.5 8.2 3.4 4.7 45.9 125.6
Figure 1: Quarterly earnings preview Profit and Loss (Btmn)
2Q16
1Q17
2Q17E
% YoY
% QoQ
1H17E
% YoY
2017E
% YoY
Revenue from project sales Total revenue Gross profit
471 471 207
863 863 403
1,125 1,125 512
138.9 138.9 147.7
30.4 30.4 26.9
1,988 1,988 915
100.5 100.5 106.8
8,637 8,637 3,541
173.9 173.9 147.8
YTD (% 2017E) 23.0 23.0 25.8
EBITDA
105
230
294
179.2
27.7
523
131.8
2,887
239.7
18.1
Interest expense
(2)
(0)
(2)
(25.3)
2,604.6
(2)
37.7
(52)
664.5
3.3
Other income
18
15
10
(44.4)
(34.3)
25
(13.7)
108
134.9
23.4
(21)
(47)
(59)
187.3
26.5
(106)
(143.9)
(521)
221.5
20.3
73
172
220
200.3
27.7
391
142.5
1,955
206.7
20.0
FY Ended 31 Dec
Income tax Net profit (loss)
Core net profit (loss)
73
172
220
200.3
27.7
391
142.5
1,955
206.7
20.0
Reported EPS (THB)
0.11
0.16
0.14
28.5
(8.9)
0.30
15.7
1.20
107.9
24.8
Core EPS (THB)
0.11
0.16
0.14
28.5
(8.9)
0.30
15.7
1.20
107.9
24.8
Gross margin – project sales (%)
43.9
46.7
45.5
46.7
41.0
Gross margin ‐ overall (%)
43.9
46.7
45.5
46.0
41.0
EBITDA margin (%)
22.3
26.6
26.1
26.3
33.4
Net margin (%)
15.5
19.9
19.5
19.7
22.6
Current ratio (x)
0.9
0.6
0.0
0.0
1.7
Interest coverage (x)
43.3
3,583.0
171.1
292.8
48.8
Debt / equity (x)
1.4
1.9
‐
‐
2.5
BVPS (Bt)
2.75
2.15
‐
‐
3.2
ROE (%)
17.4
25.5
‐
‐
49.5
Source: SIRI, KT ZMICO Research Figure 2: Presales
Figure 3: Backlog after including Park 24’s backlog
Btmn 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 ‐
Source: ORI, KT ZMICO Research
2017E 7,679 89% of 17E transfers
Backlog Bt23.9bn
1H17
1H16
2Q17
1Q17
4Q16
3Q16
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
2019E 7,399 55% of 19E transfers
2018E 8,852 74% of 18E transfers Source: ORI, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 4: The project under development of Proud Residence No. Details 1 Project name Park 24 2
Area for sale
77,000 sq.m.
3
Project value
4
No. of units
THB 17,000 million (with the backlog value of approximately THB 10,900 million), divided into: Phase 1: THB 5,900 million (with the backlog value of approximately THB 4,500 million) Phase 2: THB 11,100 million (with the backlog value of approximately THB 6,400 million) 2,072 units, divided into: Phase 1: 832 units (excluding condominium for commercial purposes of 4 units) Phase 2: 1,240 units
5
Progress
Phase 1: Under construction, approximately 70% complete Phase 2: Under construction, approximately 35% complete
Source: ORI Information Memorandum on Asset Acquisition of the company
Figure 5: Shareholding structure of Proud Residence
Source: Source: ORI Information Memorandum on Asset Acquisition of the company
Figure 6: Park 24 status and schedule
Source: ORI
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 (%)
2014 550 (320) 230 (148) 101 10 91 (2) 9 89 (18) 0 0 0 70 0.16 0.16 70 0.16 0.19
2015 2,010 (1,149) 861 (404) 530 28 502 (17) 45 485 (98) 0 0 0 386 0.64 0.64 386 0.64 0.22
2016 3,153 (1,724) 1,429 (666) 850 41 808 (7) 46 802 (162) 0 0 0 638 0.58 0.58 638 0.58 0.71
2017E 8,637 (5,096) 3,541 (1,116) 2,887 354 2,533 (52) 108 2,481 (521) 0 0 0 1,955 1.20 1.20 1,955 1.20 0.48
2018E 12,073 (7,244) 4,829 (1,405) 3,876 334 3,542 (56) 118 3,486 (732) 0 0 0 2,747 1.69 1.69 2,747 1.69 0.68
2014 38 1 0 56 1,784 1,910 688 346 1,623 225 287 1,910
2015 296 6 0 164 2,826 3,347 410 282 1,599 300 1,748 3,347
2016 621 11 0 373 5,637 6,758 753 1,823 4,015 551 2,743 6,758
2017E 0 26 0 419 14,637 18,044 5,008 4,494 12,892 812 5,152 18,044
2018E 234 36 0 456 16,248 19,769 6,503 2,286 12,957 813 6,812 19,769
2014 70 (59) 10 (530) (508) (32) 5 (28) 638 0 (84) 0 554 18 (479) (1.06)
2015 386 (38) 28 (698) (321) (144) 2 (141) (346) 1,317 (251) 0 720 258 (399) (0.67)
2016 638 (28) 41 (2,310) (1,659) (254) (98) (352) 1,887 553 (193) (12) 2,235 225 (1,870) (1.70)
2017E 1,955 0 354 (7,214) (4,905) (10,644) 100 (10,544) 4,742 1,231 (782) 0 5,190 (10,259) (15,549) (9.57)
2018E 2,747 0 334 (966) 2,116 (3,618) 0 (3,618) (4,082) 5 (1,099) 0 (5,176) (6,678) (1,502) (0.92)
2014 33.3 13.4 9.7 41.8 18.4 16.6 12.8 12.8 20.7
2015 265.3 422.9 312.1 42.9 26.4 25.0 19.2 19.2 20.3
2016 56.9 60.3 (10.1) 45.3 27.0 25.6 20.2 20.2 20.2
2017E 173.9 239.7 107.9 41.0 33.4 29.3 22.6 22.6 21.0
2018E 39.8 34.3 40.4 40.0 32.1 29.3 22.8 22.8 21.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
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, TFD. KT ZMICO is a co‐underwriter of the IPO of BGRIM.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59)
Good (scores: 70 – 79)
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 5 of 5
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
