Asian Property
2Q13A: Turnaround QoQ as expected
Asian Property Plc (AP)
2Q13 in line with all estimates. Net profit was Bt452mn, a slip of 7.7% YoY but doubled QoQ, bringing 1H13 net profit to Bt675mn, -25.8% YoY, accounting for 24% of our full year forecast. We expect 2H13 to be stronger HoH, backed by current backlog of Bt39.4bn, which secures 84% of our 2013 forecast.
Highlights:
Revenue rose 50.5% QoQ to Bt4.3bn in 2Q13. The portion from condos increased to 40% in 2Q13 from 29% in 1Q13, mostly from Rhythm Sukhumvit 50 and Aspire Rama 4.
Gross margin was sustainable at 34%, with condo at 36.7% (above target of 35%) and low-rise at 31.4%.
SG&A/Revenue dropped slightly to 19.8% in 2Q13 from 22.9% in 1Q13. Corporate rebranding expense was ~Bt100mn in 2Q13.
Backloaded presales and revenue. We look for sequential improvement in both presales and revenue recognition to peak in 4Q13 matching condo transfer schedule. YTD presales reached Bt9.59bn, accounting for 43% of its full year target. The company expects stronger presales HoH in 2H13, backed by the launch of more low-rise and condo projects. Note that it added one condo to its original plan, which brings its launches to eight condos worth Bt16.6bn from seven projects worth Bt15.4bn.
