Contractor sector shows bourse's best profit growth for Q3

Ch Karnchang (CK) was the leader with a profit increase of 944 per cent, while Sriracha Construction (SRIRACHA) expects revenue to meet its Bt2.4-billion target this year.
However, the political protests have pushed down prices of construction-sector stocks.
CH Karnchang’s profit soared from Bt89.75 million to Bt937.76 million after recognition of Bt397.7 million in gains from the sales of shares in affiliated companies. It diluted its shareholding in CK Power, from 38 per cent to 31.8 per cent.
In February, the company invested in Thai Tap Water Supply and booked a gain of Bt2.20 billion from the sales of shares in TTW, which reduced its stake from 30.04 per cent to 19.04 per cent. In the second quarter, the company invested in Bangkok Metro (BMCL) and booked gains of Bt1.09 billion.
However, two construction companies posted lower net profits. Net profit at TRC Construction fell by 63.36 per cent and at Nawarat Patanakarn (NWR) by 95.26 per cent on year.
Chatmongkol Khemapiratana, assistant managing director for business support at Sriracha Construction, said the company expected this year’s revenue to reach its target of between Bt2.4 billion and Bt2.7 billion. Sriracha earned Bt642 million in the first nine months on revenue of Bt1.85 billion, which is higher than last year’s revenue of Bt1.58 billion because of more projects.
Sriracha expects revenue of at least Bt3 billion from new projects that the company has invested in. It will maintain its net profit margin at 35 per cent by taking in highly profitable projects and cutting construction costs.
Sriracha has a backlog of more than Bt1.7 billion, of which Bt700 million will be realised next year. The remaining Bt1 billion consists mainly of machinery and pending projects in Madagascar, which are anticipated to have high profit margins. Sriracha is negotiating for various machinery projects, both local and abroad. It plans to bid for projects worth Bt4.5 billion next year and win about Bt1.5 billion to Bt2.5 billion worth of the projects.
Samai Lisakun, chief executive of TRC Construction, said his group of companies expected to log revenue of Bt3 billion to Bt3.5 billion and would try to maintain total projects in-hand at the Bt5-billion level.
TRC posted nine-month revenue of Bt1.95 billion, down by 41.70 per cent from the same period of last year. Net profit came in at Bt57.99 million, down Bt209.00, or 72.25 per cent, relative to the same period last year.
A DBS Vickers Securities analyst wrote that the domestic political tensions had pulled down the prices of construction-sector stocks such as Italian-Thai Development (ITD), NWR and SYNTEC. They fell sharply, especially on concerns of how politics would affect the government’s Bt2-trillion infrastructure project and Bt350-billion water-management project, which could be delayed to next year as the government is now busy tackling the anti-amnesty protests.