LPN Development
Record heights despite headwinds Outperform, Maintained, Bt11.30 Target price: Bt13.80
Reiterate OUTPERFORM. Our latest update with management suggests that LPN's revenue outlook would remain strong despite the challenging environment. YTD sales revenue has surpassed FY10's numbers, which could mean a new annual record high. Presales remain robust with the YTD figure forming 67% of LPN's FY11 target. Our FY11 sales estimate is 100% secured by backlog while FY12 backlog makes up 61% of our FY12 sales forecast. We maintain our above-consensus EPS estimates and LPN remains one of our top picks. Its valuation is undemanding at 7.0x CY12 P/E vs. peer average of 8.9x while its sustainable growth, strongest balance sheet and cash position, higher ROE and better yield add to its appeal. Near-term catalysts are record-high 3Q11 results and successful new launches in 4Q11. We reiterate our OUTPERFORM call and target price of THB13.80, based on 8.5x CY12 P/E.
