Real estate stocks tumble on SET

At Thursday’s close, the price of Land and Houses (LH), Origin Property (ORI), SC Asset Corporation (SC), Ananda Development (ANAN), Pruksa Holding (PSH) and Sansiri (SIRI) fell by 10.27, 5.43, 4.55, 4.24, 3.74 and 2.86 per cent, respectively. That helped the SET Index fall to 1,257.98 on Thursday, down 20.65 points or 1.62 per cent.
A stock analyst at Capital Nomura Securities said that real estate firms’ sales, transfers, and net profits are expected to drop by 11, 10 and 23 per cent, respectively, due to the decline in buying power, Loan-To-Value (LTV) measures, and strict terms for bank loans.
“We expect real estates’ net profit this year to be the lowest … since the floods in 2011-2012,” the stock analyst said.
“Though the real estate index has fallen more than 20 per cent and the price-to-earnings ratio fallen by 7.7 times, we advise investors to delay investment in these stocks because their dividend rate is expected to be approximately 7.5 per cent.”
Meanwhile, Padon Vannarat, assistant managing director at Yuanta Securities, said that the price of LH stock dropped sharply because the company had paid dividends of Bt0.40 per share.
“We advise investors to sell LH stocks because we expected the stock to lack positive sentiments,” he said.
“Although it is a large cap stock and pays high dividends, we recommend investors buy stocks at Bt6 per share or after the company announces its first-quarter performance.”
He projects the company’s net profit in the first quarter to be Bt1 billion, down 42.3 per cent year-on-year.
“We expect the company’s transfers to be Bt5.2 billion, down 9 per cent due to measures to contain the spread of Covid-19,” he added.
“Meanwhile, the revenue from rental business will drop 13 per cent as the hotel occupancy rate fell to below 10 per cent at the end of March this year.”