Asian Property

Asian Property Plc
Presales heading towards beating target. AP’s presales were Bt16.4bn in 9M12,
+36% YoY, and reaching 82% of its full year target of Bt20bn: we thus have no doubt it
will reach target and in fact may exceed it. AP’s condo presales could beat its full year
forecast of Bt10bn as it already achieved Bt9bn in 9M12 and we expect a positive
response to two new launches (Aspire Sathorn-Taksin phase 1 and The Address
Sukhumvit 39) valued at Bt3.9bn in 4Q12. Note that AP raised the project value for The
Address Sukhumvit 39 to Bt3bn from the original Bt2bn. Low-rise presales are
expected to reach the year’s goal since it has already reached Bt7.4bn against its
Bt10bn target.
Earnings revision. 2013 earnings forecast goes up 15% to Bt3.3bn after we raise
revenue recognition for condo by 19% to Bt12.6bn from Bt10.6bn. This is brought by
the more rapid than expected presales for Aspire Rama 4 and Aspire Ngamwongwan
plus the company’s upward revision of condo project values. Moving the revenue for
the condos required us to take down 2014 forecast a notch (2%). Our current forecast
is ahead of consensus by 20% for 2013, but in line for 2012 and 2014. We expect the
market to make the same changes.
Backlog of Bt33.6bn. Of the Bt33.6bn in backlog, Bt9.8bn will be realized in second
half. Adding this to the Bt7bn booked in 1H12 will achieve our full year forecast. The
remainder of the backlog will be booked in 2013 (Bt11.8bn) and 2014 (Bt7.6bn),
securing 51% of our 2013 forecast and 32% of 2014.
Look for sequential earnings growth in 3Q12-4Q12. We expect revenue
recognition to rise QoQ in 3Q12 and 4Q12 – with the year’s final quarter as this year’s
best. This supported by the expected transfer before year’s end for The Address
Sathorn 12 (Bt1.9bn) and low-rise (Bt5bn).
Reiterate BUY. We raised AP’s mid-2013 price target to Bt9.6/share from Bt9.3/share
in response to the earnings upgrade, with unchanged 2X PBV valuation. We like AP’s
good earnings visibility and robust growth outlook backed by condo completion. With
solid 3-yr CAGR of 29%, the stock is trading at low PEG of just 0.3x and we remain BUYers.