Supalai - Global Alliance Partners
Supalai Buy (17E TP Bt29.50)
Earnings Review
Close Bt23.30
Property Development August 9, 2017
Beat forecast /Below forecast /In line
2Q17 net profit declined 7.4% YoY but rose 93.5% QoQ Results date: August 8, 2017 Price Performance (%) Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
3.087
3.288
KT ZMICO vs. consensus Share data
6.6%
‐13.9%
Reuters / Bloomberg
SPAL.BK/SPALI TB
Paid‐up Shares (m)
1,716.55
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
40.00/1,203.00
Foreign limit / actual (%)
35.00/26.16
52 week High / Low (Bt)
27.75/21.10
Avg. daily T/O (shares 000) NVDR (%)
4,951.00 7.46
Estimated free float (%)
69.98
Beta
0.90
URL
www.supalai.com
CGR
Anti‐corruption
n.a.
Maintain Buy with the 17E TP of Bt29.5 We maintain the 17E TP of Bt29.5 but the 2018E TP will be diluted to Bt25.5 as we expect 2018E EPS to have a 20% dilution effect from the exercise of SPALI‐W4. We maintain Buy as SPALI has a good trend of presales, especially low‐rise presales; moreover, it has a huge backlog of Bt37.4bn to be realized as revenue from 2H17E‐20, which will help support its earnings in the long term. 2Q17 net profit declined 7.4% YoY but rose 93.5% QoQ SPALI reported 2Q17 net profit at Bt1.33bn (‐7.4% YoY, +93.5% QoQ), 10% above our forecast, mainly due to a lower‐than‐expected SG&A expense‐to‐revenue ratio. 2Q17 transfers were Bt5.9bn, decreasing 5.0% YoY but increasing 62.3% QoQ, which were from low‐rise and condo transfers at 55: 45. The average GPM was maintained at 38% and the SG&A expense‐to‐revenue ratio was 11.8% (our estimate was 12.8%), higher than 2Q16 at 10% but lower than 16.2% in 1Q17. Maintain 2017E earnings forecast SPALI’s 1H17 net profit was 36% of our 2017E earnings of Bt5.64bn (+15.4% YoY). We maintain our forecast on the expectation that 2H17 transfers will increase HoH as SPALI has a backlog of Bt10.3bn to be transferred in the period, which is sufficient to secure 75% and 38% of our 2017‐18E transfer revenue. Take‐up rate of new condo project in 2H17 doing well SPALI launched its first new condo project in 2H17, i.e., Supalai Veranda Phasi Charoen Station, worth Bt4.4bn on 5‐6 Aug 17. The take‐up rate was 50% or Bt2.2bn, better than SPALI’s target at Bt1bn. This constitutes quite good presales when considering the high competition from condo project launches in this area. 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 18,591 4,478 2.61 55.4 2.61 55.4 1.00 10.47 2014 8.9 8.9 8.6 2.2 4.3 24.9 41.2
2015 21,364 4,349 2.53 (2.9) 2.53
(2.9)
1.00 11.91 2015 9.2 9.2 9.7 2.0 4.3 21.3 49.7
2016 23,336 4,887 2.85 12.4 2.85 12.4 1.05 13.76 2016 8.2 8.2 9.1 1.7 4.5 20.7 47.0
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2017E 27,067 5,641 3.29 15.4 3.29 15.4 0.00 16.58 2017E 7.1 7.1 7.8 1.4 0.0 19.8 40.5
2018E 29,024 6,074 2.83 (13.9) 2.83 (13.9) 1.20 16.37 2018E 8.2 8.2 8.0 1.4 5.2 17.3 34.3
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
2Q16
1Q17
2Q17
% YoY
% QoQ
1H17
% YoY
2017E
% YoY
Revenue from project sales Total revenue Gross profit
6,228 6,323 2,448
3,640 3,754 1,443
5,909 6,009 2,293
(5.1) (5.0) (6.3)
62.3 60.1 59.0
9,549 9,763 3,736
(22.7) (22.3) (23.1)
26,611 27,067 10,424
16.2 16.0 17.4
YTD (% 2017E) 35.9 36.1 35.8
EBITDA
1,905
921
1,694
(11.1)
83.9
2,614
(31.2)
7,619
14.5
34.3
(87)
(82)
(94)
7.8
14.1
(176)
10.5
(318)
1.3
55.4
Interest expense Other income
51
50
70
36.9
40.6
119
48.1
133
(14.6)
89.6
(350)
(164)
(328)
(6.4)
99.5
(493)
(31.4)
(1,446)
13.2
34.1
53
61
110
106.7
80.3
(172)
(56.2)
80
0.4
214.5
Net profit (loss)
1,435
687
1,328
(7.4)
93.5
2,015
(28.8)
5,641
15.4
35.7
Core net profit (loss)
1,435
687
1,328
(7.4)
93.5
2,015
(28.8)
5,641
15.4
35.7
Reported EPS (THB)
0.84
0.40
0.77
(7.4)
93.5
1.17
(28.8)
3.29
15.4
35.7
Core EPS (THB)
0.84
0.40
0.77
(7.4)
93.5
1.17
(28.8)
3.29
15.4
35.7
Gross margin‐ Project sales (%)
38.8
38.1
38.1
38.1
38.5
Gross margin ‐ overall (%)
38.7
38.4
38.2
38.3
38.5
EBITDA margin (%)
30.1
24.5
28.2
26.8
28.2
Net margin (%)
22.7
18.3
22.1
20.6
20.8
Current ratio (x)
3.8
3.2
3.2
3.2
3.3
Interest coverage (x)
21.4
10.7
17.6
14.4
23.5
Debt / equity (x)
1.1
1.2
1.2
1.2
1.0
BVPS (Bt)
13.07
14.14
14.37
14.37
16.58
ROE (%)
24.0
17.4
16.6
Income tax Gn (Ls) from affiliates
16.6
19.8
Source: SPALI, KT ZMICO Research Figure 2: Presales
Figure 3: Distribution of backlog as of 30 Jun 17
Btmn 18,000
Btmn
16,000
12,000
14,000
10,000
12,000
8,000
10,000 8,000
6,000
6,000
4,000
4,000 2,000
2,000
High rise
Source: SPALI, KT ZMICO Research
1H16 1H17
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
‐
‐ 2017E
2018E
2019E
Low rise
2020E
Source: SPALI, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 4: Procedure of the capital increase
Source: SPALI
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 18,591 (10,845) 7,746 (1,919) 6,020 112 5,907 (186) 80 5,722 (1,134) 0 0 0 4,478 2.61 2.61 4,478 2.61 1.00
2015 21,364 (13,332) 8,032 (2,205) 6,115 129 5,986 (277) 159 5,692 (1,155) 0 0 (17) 4,349 2.53 2.53 4,349 2.53 1.00
2016 23,336 (14,459) 8,877 (2,536) 6,654 157 6,497 (314) 156 6,262 (1,277) 0 0 80 4,887 2.85 2.85 4,887 2.85 1.05
2017E 27,067 (16,643) 10,424 (3,087) 7,619 149 7,470 (318) 133 7,232 (1,446) 0 0 80 5,641 3.29 3.29 5,641 3.29 0.00
2018E 29,024 (17,879) 11,145 (3,283) 8,156 151 8,005 (297) 143 7,787 (1,557) 0 0 80 6,074 2.83 2.83 6,074 2.83 1.20
2014 662 8 33,600 2,176 934 38,031 2,361 10,244 20,053 1,717 17,977 38,031
2015 798 11 42,378 2,586 817 47,287 3,862 16,326 26,837 1,717 20,450 47,287
2016 569 19 46,410 2,429 791 51,680 8,466 12,433 28,068 1,717 23,612 51,680
2017E 200 12 51,005 2,317 1,029 55,678 7,885 11,445 27,223 1,717 28,455 55,678
2018E 3,061 13 54,327 2,206 1,103 61,929 4,700 13,645 26,814 2,146 35,115 61,929
2014 4,478 46 112 (7,270) (2,633) (420) 1 (420) 4,239 0 (1,302) 0 2,937 (115) (2,914) (1.70)
2015 4,349 (33) 129 (9,446) (5,001) (355) 1 (354) 7,577 (59) (2,009) (19) 5,490 136 (5,021) (2.92)
2016 4,887 (211) 157 (3,492) 1,340 (419) (25) (444) 1,034 0 (1,766) (393) (1,125) (229) 1,524 0.89
2017E 5,641 (66) 149 (3,973) 1,751 (52) 26 (26) (1,569) 0 (944) 419 (2,094) (369) 1,789 1.04
2018E 6,074 (65) 151 (3,038) 3,122 (52) 0 (52) (985) 0 (1,287) 2,063 (209) 2,861 3,163 1.47
2014 47.4 56.1 55.4 41.7 32.4 31.8 24.1 24.1 19.8
2015 14.9 1.6 (2.9) 37.6 28.6 28.0 20.4 20.4 20.3
2016 9.2 8.8 12.4 38.0 28.5 27.8 20.9 20.9 20.4
2017E 16.0 14.5 15.4 38.5 28.2 27.6 20.8 20.8 20.0
2018E 7.2 7.0 (13.9) 38.4 28.1 27.6 20.9 20.9 20.0
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.
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 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
Earnings Review
Close Bt23.30
Property Development August 9, 2017
Beat forecast /Below forecast /In line
2Q17 net profit declined 7.4% YoY but rose 93.5% QoQ Results date: August 8, 2017 Price Performance (%) Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
3.087
3.288
KT ZMICO vs. consensus Share data
6.6%
‐13.9%
Reuters / Bloomberg
SPAL.BK/SPALI TB
Paid‐up Shares (m)
1,716.55
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
40.00/1,203.00
Foreign limit / actual (%)
35.00/26.16
52 week High / Low (Bt)
27.75/21.10
Avg. daily T/O (shares 000) NVDR (%)
4,951.00 7.46
Estimated free float (%)
69.98
Beta
0.90
URL
www.supalai.com
CGR
Anti‐corruption
n.a.
Maintain Buy with the 17E TP of Bt29.5 We maintain the 17E TP of Bt29.5 but the 2018E TP will be diluted to Bt25.5 as we expect 2018E EPS to have a 20% dilution effect from the exercise of SPALI‐W4. We maintain Buy as SPALI has a good trend of presales, especially low‐rise presales; moreover, it has a huge backlog of Bt37.4bn to be realized as revenue from 2H17E‐20, which will help support its earnings in the long term. 2Q17 net profit declined 7.4% YoY but rose 93.5% QoQ SPALI reported 2Q17 net profit at Bt1.33bn (‐7.4% YoY, +93.5% QoQ), 10% above our forecast, mainly due to a lower‐than‐expected SG&A expense‐to‐revenue ratio. 2Q17 transfers were Bt5.9bn, decreasing 5.0% YoY but increasing 62.3% QoQ, which were from low‐rise and condo transfers at 55: 45. The average GPM was maintained at 38% and the SG&A expense‐to‐revenue ratio was 11.8% (our estimate was 12.8%), higher than 2Q16 at 10% but lower than 16.2% in 1Q17. Maintain 2017E earnings forecast SPALI’s 1H17 net profit was 36% of our 2017E earnings of Bt5.64bn (+15.4% YoY). We maintain our forecast on the expectation that 2H17 transfers will increase HoH as SPALI has a backlog of Bt10.3bn to be transferred in the period, which is sufficient to secure 75% and 38% of our 2017‐18E transfer revenue. Take‐up rate of new condo project in 2H17 doing well SPALI launched its first new condo project in 2H17, i.e., Supalai Veranda Phasi Charoen Station, worth Bt4.4bn on 5‐6 Aug 17. The take‐up rate was 50% or Bt2.2bn, better than SPALI’s target at Bt1bn. This constitutes quite good presales when considering the high competition from condo project launches in this area. 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 18,591 4,478 2.61 55.4 2.61 55.4 1.00 10.47 2014 8.9 8.9 8.6 2.2 4.3 24.9 41.2
2015 21,364 4,349 2.53 (2.9) 2.53
(2.9)
1.00 11.91 2015 9.2 9.2 9.7 2.0 4.3 21.3 49.7
2016 23,336 4,887 2.85 12.4 2.85 12.4 1.05 13.76 2016 8.2 8.2 9.1 1.7 4.5 20.7 47.0
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2017E 27,067 5,641 3.29 15.4 3.29 15.4 0.00 16.58 2017E 7.1 7.1 7.8 1.4 0.0 19.8 40.5
2018E 29,024 6,074 2.83 (13.9) 2.83 (13.9) 1.20 16.37 2018E 8.2 8.2 8.0 1.4 5.2 17.3 34.3
Figure 1: Quarterly earnings review Profit and Loss (Btmn)
FY Ended 31 Dec
2Q16
1Q17
2Q17
% YoY
% QoQ
1H17
% YoY
2017E
% YoY
Revenue from project sales Total revenue Gross profit
6,228 6,323 2,448
3,640 3,754 1,443
5,909 6,009 2,293
(5.1) (5.0) (6.3)
62.3 60.1 59.0
9,549 9,763 3,736
(22.7) (22.3) (23.1)
26,611 27,067 10,424
16.2 16.0 17.4
YTD (% 2017E) 35.9 36.1 35.8
EBITDA
1,905
921
1,694
(11.1)
83.9
2,614
(31.2)
7,619
14.5
34.3
(87)
(82)
(94)
7.8
14.1
(176)
10.5
(318)
1.3
55.4
Interest expense Other income
51
50
70
36.9
40.6
119
48.1
133
(14.6)
89.6
(350)
(164)
(328)
(6.4)
99.5
(493)
(31.4)
(1,446)
13.2
34.1
53
61
110
106.7
80.3
(172)
(56.2)
80
0.4
214.5
Net profit (loss)
1,435
687
1,328
(7.4)
93.5
2,015
(28.8)
5,641
15.4
35.7
Core net profit (loss)
1,435
687
1,328
(7.4)
93.5
2,015
(28.8)
5,641
15.4
35.7
Reported EPS (THB)
0.84
0.40
0.77
(7.4)
93.5
1.17
(28.8)
3.29
15.4
35.7
Core EPS (THB)
0.84
0.40
0.77
(7.4)
93.5
1.17
(28.8)
3.29
15.4
35.7
Gross margin‐ Project sales (%)
38.8
38.1
38.1
38.1
38.5
Gross margin ‐ overall (%)
38.7
38.4
38.2
38.3
38.5
EBITDA margin (%)
30.1
24.5
28.2
26.8
28.2
Net margin (%)
22.7
18.3
22.1
20.6
20.8
Current ratio (x)
3.8
3.2
3.2
3.2
3.3
Interest coverage (x)
21.4
10.7
17.6
14.4
23.5
Debt / equity (x)
1.1
1.2
1.2
1.2
1.0
BVPS (Bt)
13.07
14.14
14.37
14.37
16.58
ROE (%)
24.0
17.4
16.6
Income tax Gn (Ls) from affiliates
16.6
19.8
Source: SPALI, KT ZMICO Research Figure 2: Presales
Figure 3: Distribution of backlog as of 30 Jun 17
Btmn 18,000
Btmn
16,000
12,000
14,000
10,000
12,000
8,000
10,000 8,000
6,000
6,000
4,000
4,000 2,000
2,000
High rise
Source: SPALI, KT ZMICO Research
1H16 1H17
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
‐
‐ 2017E
2018E
2019E
Low rise
2020E
Source: SPALI, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 4: Procedure of the capital increase
Source: SPALI
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 18,591 (10,845) 7,746 (1,919) 6,020 112 5,907 (186) 80 5,722 (1,134) 0 0 0 4,478 2.61 2.61 4,478 2.61 1.00
2015 21,364 (13,332) 8,032 (2,205) 6,115 129 5,986 (277) 159 5,692 (1,155) 0 0 (17) 4,349 2.53 2.53 4,349 2.53 1.00
2016 23,336 (14,459) 8,877 (2,536) 6,654 157 6,497 (314) 156 6,262 (1,277) 0 0 80 4,887 2.85 2.85 4,887 2.85 1.05
2017E 27,067 (16,643) 10,424 (3,087) 7,619 149 7,470 (318) 133 7,232 (1,446) 0 0 80 5,641 3.29 3.29 5,641 3.29 0.00
2018E 29,024 (17,879) 11,145 (3,283) 8,156 151 8,005 (297) 143 7,787 (1,557) 0 0 80 6,074 2.83 2.83 6,074 2.83 1.20
2014 662 8 33,600 2,176 934 38,031 2,361 10,244 20,053 1,717 17,977 38,031
2015 798 11 42,378 2,586 817 47,287 3,862 16,326 26,837 1,717 20,450 47,287
2016 569 19 46,410 2,429 791 51,680 8,466 12,433 28,068 1,717 23,612 51,680
2017E 200 12 51,005 2,317 1,029 55,678 7,885 11,445 27,223 1,717 28,455 55,678
2018E 3,061 13 54,327 2,206 1,103 61,929 4,700 13,645 26,814 2,146 35,115 61,929
2014 4,478 46 112 (7,270) (2,633) (420) 1 (420) 4,239 0 (1,302) 0 2,937 (115) (2,914) (1.70)
2015 4,349 (33) 129 (9,446) (5,001) (355) 1 (354) 7,577 (59) (2,009) (19) 5,490 136 (5,021) (2.92)
2016 4,887 (211) 157 (3,492) 1,340 (419) (25) (444) 1,034 0 (1,766) (393) (1,125) (229) 1,524 0.89
2017E 5,641 (66) 149 (3,973) 1,751 (52) 26 (26) (1,569) 0 (944) 419 (2,094) (369) 1,789 1.04
2018E 6,074 (65) 151 (3,038) 3,122 (52) 0 (52) (985) 0 (1,287) 2,063 (209) 2,861 3,163 1.47
2014 47.4 56.1 55.4 41.7 32.4 31.8 24.1 24.1 19.8
2015 14.9 1.6 (2.9) 37.6 28.6 28.0 20.4 20.4 20.3
2016 9.2 8.8 12.4 38.0 28.5 27.8 20.9 20.9 20.4
2017E 16.0 14.5 15.4 38.5 28.2 27.6 20.8 20.8 20.0
2018E 7.2 7.0 (13.9) 38.4 28.1 27.6 20.9 20.9 20.0
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.
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 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
