Pruksa Real Estate

Pruksa Real Estate Plc (PS)  

- 4Q14 profit makes year's peak. FY2014 profit grows 15%   

 

PS's 4Q14 net profit and normalized profit made the peak of 2014 at B1.88bn, growing 2.3%qoq but falling 16.9%yoy (as expected). Many condominiums and more horizontal projects were transferred in 4Q14, boosting income from sales by 7%qoq or B12.4bn. PS's FY2014 total income exceeded the target at B46.3bn (B33bn from horizontal projects, B9.7bn from condominiums, and B441m from overseas business), growing 8%yoy. Gross margin and normalized profit margin improved to 36.7% and 15.5%, respectively. PS's FY2014 normalized profit grew 14.7%yoy to B6.66bn. Its presales were B39bn, rising 20%yoy, winning the largest market share among peers. Net gearing of 0.72x is lower than the sector's average.   

 

- Backlog already makes up 49% of FY2015 income target      

 

We maintain PS's FY2015 earnings forecast at B7.5bn, growing 13%. PS's current backlog of B23bn from 13 newly-launched condominiums makes up 49% of full-year income target. Business cycle of horizontal projects has decreased from 87 days in 2014 to 85 days in 2015 as new precast concrete factory has raised PS's capacity from 640 units/month to 1,120 units/month. January presales were B3.4bn, rising 170%yoy because Chapter One Midtown Ladprao 24 was launched and more horizontal projects were sold. We target FY2015 presales at B4.7bn, rising 20%yoy; the company plans to launch 70-75 new projects (60-63 horizontal projects and 10 condominiums) valued B55-61bn in 2015. However, increasing household debt in 2015 may result in higher rejection rate. 

 

- B1 dividend, 2.8% dividend yield  

PS will pay FY2014 dividend at B1/share (2.8% dividend yield); XD date is March 11, and dividend will be paid on May 15.  We maintain the fair value at B40.52 (12x P/E ratio); we recommend BUY.