Pruksa Real Estate
Pre-sales make new high. Profit to remain strong HOLD
Pruksa Real Estate Plc (PS)
- No.1 pre-sales
3Q14 presales grew by 37.5%qoq and made a record high at B13.4bn.
Condominium presales leapt from B1.6bn in 2Q14 to B5.3bn in 3Q14 after
four new condominiums were launched and sold: The Signature by Urbano
Saphan Khwai (70% of B2.1bn total value), The Tree Rio Bang Aor (47% of
B3.6bn total value), Plum Condo Samakkhi (18% of B914m total value),
and Plum Condo Park Rangsit (34% of B3.1bn total value). Horizontal
project presales stayed flat qoq at B8bn. 9M14 presales were B31.3bn,
making up 73% of FY2014 presales target of B43bn. PS has planned to
launch 73 new projects in 2014, totaling B73bn; 35 projects valued B41.4bn
would be launched in 2H14.
- 3Q14 profit projected at B1.9bn
3Q14 total transfer is anticipated to rise continuously from five new
condominiums (Plum Condo Ladprao 101, Plum Condo Bangkaen, Ivy
Ampio, The Tree Privata, and Condolette Dwell), as well as Chapter one
Modern Dutch valued B4.1bn that has been transferred since 2Q14. For
horizontal projects, business cycle has decreased from 96 to 90 days in
3Q14. PCF6 have started their test run after PCF1-PCF5 factories have been
working at 730 units/month capacity (exceeding its actual capacity of 640
units/month). Under the assumption that revenue from property sales is
B11.5bn (growing 6%qoq) and normalized profit margin is 16.5% in 3Q14,
3Q14 net profit is estimated at B1.9bn, staying flat qoq.
- Maintain fair value at B35.11 in 2014, B40.52 in 2015
PS has still possessed the largest presales and revenue among peers. Its
earnings are projected to continue growing in 2H14 and 2015. With P/E
ratio of 12x, we maintain PS's fair value at B35.11 in 2014 and B40.52 in
2015.
