Amata Corporation
2011 land sales beat market expectations Impressive 4Q11 land sales takes 2011 total to 1,555 rai (1 rai = 0.4 acre), up 20% YoY; excludes 1,000 rai sold to its JV AMATA's two industrial estates spared by floods, should now be preferred locations Re-it
Amata Corporation Plc (AMATA)
Impressive land sales in 4Q11. Despite the heavy flooding in Central Thailand dampening business sentiment, AMATA sold 798 rai of land at its two industrial estates in 4Q11. This took 2011 land sales to 1,555 rai, up 20% YoY (excludes 1,000 rai land sold to Thai-Chinese Rayong Industrial Services Co., Ltd, a JV comprising Hua Fang Pharmaceutical Co., Ltd. (Holley Group) 49%, AmataCity 30%, and Amata Corp. 21%.
Positive outlook intact. Management has set an aggressive land sales target of 2,000 rai for this year, in anticipation of relocation demand from factories in the seven flooded industrial estates in Pathum Thani and Ayutthaya, and from investors who wish to diversify risks. We have assumed a more conservative 1,600 rai land sales for this year and 1,700 rai next year. Earnings should jump 92% this year and 79% next year, on the back of increased realized revenue from higher land sales.
Maintain BUY. AMATA is now one of our top picks in the industrial property segment because of its strategically located estates, large land bank, strong earnings growth outlook, and attractive valuation. The stock now offers 20% upside to our Bt16 TP, based on 20% discount to RNAV.
