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THAILAND EQUITY RESEARCH
Page | 1 | PHILLIP SECURITIES (THAILAND)
Closing Price(Bt) 19.00Target Price(Bt) 24.80 (+36.31%)
COMPANY DATA
O/S Shares (mn) : 1,717 Market Cap. (Btmn) :Market Cap. (USDmn) :52‐WK Hi/Lo (Bt) : 25.25/153M Average Daily T/O (mn) : 3.73Par Value (Bt) : 1.00
MAJOR SHAREHOLDERS (%)
1. Prateep TangmatiTham 23.32. Thai NVDR 7.33. Atchara Tangmatitham 5.3
PRICE PERFORMANCE (%)
1MTH 3MTH 1YRABS 8% ‐2% ‐23%REL TO SET INDEX 12% 13% ‐5%
PRICE VS SET INDEX
Source: Bloomberg, PSR
KEY FINANCIALS
FYE Dec FY13 FY14 FY15E FY16ESales(Btmn) 12,615 18,591 21,726 21,783Net Profit(Btmn) 2,882 4,478 4,428 4,718EPS (Bt) 1.68 2.61 2.58 2.75P/E (X) 11.3 7.3 7.4 6.9BVPS (Bt) 8.44 10.29 11.72 12.73P/B (X) 2.3 1.8 1.6 1.5DPS (Bt) 0.70 1.00 1.03 1.10Dividend Yield (%) 3.7 5.3 5.4 5.8ROE (%) 21.58 28.27 23.72 22.71Debt/Equity (X) 1.97 1.71 1.87 1.92
Source: Company, PSR Est.**Multiples and yields are based on latest closing price
VALUATION METHOD
P/E'16 (9x)
Danai Tunyaphisitchai, CFACapital Market Investment Analyst # 2375Tel: 66 2 635 1700 # 481
32,615 899
26 August 2015
Buy (Maintain)
12 January 2016
0
10
20
30
Jan‐13 Jan‐14 Jan‐15 Jan‐16
SPALI TB EQUITY SETI (rebased)
Supalai FY15 presales surprisingly hit target on record high presales in 4QFY15 THAILAND | SET | PROP | COMPANY VISIT BLOOMBERG SPALI TB l REUTERS SPALI.BK FY15 presales surprisingly hit target on strong SDH/TH and condo presales in 4QFY15 SPALI reported its total presales surged to all time highs at Bt9.5bn in 4QFY15 buoyed by superb presales performance from both SDH/TH and condo projects. For the period, SDH/TH presales clocked in at Bt3.9bn, up substantially from average preales of Bt2.3bn/quarter over the last 7 quarters thanks largely to (i) strong response for its 7 newly launched projects in 4QFY15 worth a combined value of Bt6.5bn after an improvement to the common areas of the high‐end projects and (ii) continued strong presales momentum for houses priced between Bt3mn‐Bt5mn/unit. For the year, SDH/TH presales arrived at Bt11.2bn, which came in nearly 13% above its full‐year target of Bt10bn. On the high‐rise front, condo presales doubled to Bt5.5bn in 4QFY15 from an average of Bt2.4bn/quarter over the last 7 quarters due chiefly to the overwhelming response for its newly launched large‐scale condo project Supalai Riva Grande worth Bt6.8bn which had an average take‐up rate of up to 60%, translating into presales of Bt4bn. The remaining Bt1.5bn condo presales came from other existing condo projects. In sum, FY15 total presales surprisingly met target on record high presales in 4QFY15 though cumulative presales in 9MFY15 came in only Bt13bn, accounting for 58% of its full‐year target. Profit set to return to positive growth of 6% y‐y in FY16 We expect SPALI to return to positive profit growth in FY16 after a marginal contraction in FY15. Our forecast suggests SPALI will see a 1% y‐y drop in FY15 profit largely because of margin squeeze. We assume FY15 revenue will rise 17% y‐y to Bt21.3bn on expectations that 4QFY15 revenue will come in at Bt6.8bn. SPALI achieved revenue of Bt14.5bn in 9MFY15. Its current backlog including 4QFY15 presales stood at Bt44bn, of which around Bt8bn would be booked as revenue in 4QFY15. For the year, we expect margins to narrow to 37% from 41% a year earlier due to the negative effects of weak margins from Supalai Wellington 1, which would contribute up to 17% of total revenue in FY15. For FY16, we see scope for its profit to return to positive growth of 6% y‐y on the prospects of margin improvement. It seems to us that there remains room for margins to improve in FY16 after the near completion of the transfers at low‐margin Supalai Wellington 1 in FY15. There should also be no concerns about margins at Supalai Wellington 2 afer SPALI has changed its cost management methods to be more effective than the first phase of the project Supalai Wellington 1. However, FY16 revenue is expected to stay level with FY15 at around Bt21bn based on assumptions that (i) there would be a backlog of Bt13bn carried forward to FY16 and (ii) the rest Bt8bn should come from sales of existing condo inventories at Bt2bn‐Bt3bn and revenue from SDH/TH presales at Bt5bn. In our view, strong SDH/TH presales momentum should drive up SDH/TH revenue to offset uncertainty over sales of existing condo inventories against the current backdrop of persistently weak condo market. ‘BUY’ rating based on improving sales performance and cheap P/E valuation In our view, strong presales momentum, which surprisingly led SPALI to hit its FY15 presales target would act as a catalyst for share price performance in the near term. We remain confident that its profit will likely find its way back to positive growth in FY16. The current valuation also look undemanding at a mere 6x P/E, which still represents a big discount to its historical average of 9x. On balance, we reiterate a ‘BUY’ stance on SPALI shares with a Bt24.80/share target price.
Ref. No.: CO2016_0019
THAILAND EQUITY RESEARCH
PHILLIP SECURITIESS (THAILAND) | 2 | P a g e
Corporate Governance ‐2015
ADVANC BAFS BCP BIGC BTS CK CPN DRT DTAC DTCEASTW EGCO GRAMMY HANA HMPRO INTUCH IRPC IVL KBANK KCEKKP KTB LHBANK LPN MCOT MINT MONO NKI PHOL PPSPS PSL PTT PTTEP PTTGC QTC RATCH ROBINS SAMART SAMTELSAT SC SCB SCC SE‐ED SIM SNC SPALI THCOM TISCOTKT TMB TOP VGI WACOAL
AAV ACAP AGE AHC AKP AMATA ANAN AOT APCS ARIPASIMAR ASK ASP BANPU BAY BBL BDMS BECL BKI BLABMCL BOL BROOK BWG CENTEL CFRESH CHO CIMBT CM CNTCOL CPF CPI CSL DCC DELTA DEMCO ECF EE ERWGBX GC GFPT GLOBAL GUNKUL HEMRAJ HOTPOT HYDRO ICC ICHIINET IRC KSL KTC LANNA LH LOXLEY LRH MACO MBKMC MEGA MFEC NBC NCH NINE NSI NTV OCC OGCOISHI OTO PAP PDI PE PG PJW PM PPP PRPRANDA PREB PT PTG Q‐CON QH RS S & J SABINA SAMCOSCG SEAFCO SFP SIAM SINGER SIS SITHAI SMK SMPC SMTSNP SPI SSF SSI SSSC SST STA STEC SVI SWCSYMC SYNTEC TASCO TBSP TCAP TF TGCI THAI THANA THANITHIP THRE THREL TICON TIP TIPCO TK TKS TMI TMILLTMT TNDT TNITY TNL TOG TPC TPCORP TRC TRU TRUETSC TSTE TSTH TTA TTCL TTW TU TVD TVO TWFPTWS UAC UT UV VNT WAVE WINNER YUASA ZMICO
2S AEC AEONTS AF AH AIRA AIT AJ AKR AMANAHAMARIN AP APCO AQUA AS ASIA AUCT AYUD BA BEAUTYBEC BFIT BH BIG BJC BJCHI BKD BTNC CBG CGDCHG CHOW CI CITY CKP CNS CPALL CPL CSC CSPCSS CTW DNA EARTH EASON ECL EFORL ESSO FE FIREFOCUS FORTH FPI FSMART FSS FVC GCAP GENCO GL GLANDGLOW GOLD GYT HTC HTECH IEC IFEC IFS IHL IRCPITD JSP JTS JUBILE KASET KBS KCAR KGI KKC KTISKWC KYE L&E LALIN LHK LIT LIVE LST M MAJORMAKRO MATCH MATI MBKET M‐CHAI MFC MILL MJD MK MODERNMOONG MPG MSC MTI MTLS NC NOK NUSA NWR NYTOCEAN PACE PATO PB PCA PCSGH PDG PF PICO PLPLANB PLAT PPM PRG PRIN PSTC PTL PYLON QLT RCIRCL RICHY RML RPC S SALEE SAPPE SAWAD SCCC SCNSCP SEAOIL SIRI SKR SMG SOLAR SORKON SPA SPC SPCGSPPT SPVI SRICHA SSC STANLY STPI SUC SUSCO SUTHA SYNEXTAE TAKUNI TCC TCCC TCJ TEAM TFD TFI TIC TIWTLUXE TMC TMD TOPP TPCH TPIPL TRT TSE TSR UMIUP UPF UPOIC UREKA UWC VIBHA VIH VPO WHA WINXO
Score Range
< 50%
50‐59%
60‐69%
70‐79%
80‐89%
90‐100%
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company l isted on the Stock Exchange of Thailand and the Market for Alternative disclosure to the public and able to be accessed by a general public investor. The results, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.
The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that data. Phil l ip Securities (Thailand) of securities company does not confirm nor certify the accuracy of such survey result.
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Results Presentation
THAILAND EQUITY RESEARCH
PHILLIP SECURITIESS (THAILAND) | 3 | P a g e
Industry Group Name Sector Name Sector IndexAgro & Food Industry[AGRO] Agribusiness AGRI
Food & Beverage FOODConsumer Products[CONSUMP] Fashion FASHION
Home & Office Products HOMEPersonal Products & Pharmaceuticals PERSON
Financials [FINCIAL] Banking BANKFinance & Securities FINInsurance INSUR
Industrials [INDUS] Automotive AUTOIndustrial Materials & Machinery IMMPackaging PKGPaper & Printing Materials PAPERPetrochemicals & Chemicals PETROSteel STEEL
Property & Construction[PROPCON] Construction Materials CONMATConstruction Services CONS Property Development PROPProperty Fund & REITs PF&REIT
Resources [RESOURC] Energy & Util ities ENERGMining MINE
Services [SERVICE] Commerce COMMMedia & Publishing MEDIAHealth Care Services HELTHTourism & Leisure TOURISMProfessional Services PROFTransportation & Logistics TRANS
Technology [TECH] Electronic Components ETRONInformation & Communication Technology ICT
PSR Rating SystemCapital Gain Recommendation> 15% BUY> 5% ‐ 15% ACCUMULATE / TRADING BUY> 0% ‐ 5% NEUTRAL0 <= SELL
RemarksWe do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors l ike (but not l imited to) a stock's risk reward profi le, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation
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