Sansiri

Sansiri Plc (SIRI)

Q1 2013 pre-sale record high. Presales reached Bt20.9bn in 1Q13, +91% YoY and +29%
QoQ to a new record, backed by strong condo presales accounting for 85% of the total,
with SDH comprising 12% and TH 2%. As of April 17, presales were Bt22.3bn, 46% of its
full year target. In our view, SIRI will very likely beat its full year target since it is adding
two to three condos to its launch plan.
Business development. Over the long Songkran holiday, SIRI launched two condos in
Hua Hin and these met with satisfactory response: Baan Kiang Fah Hua Hin sold 19%
and Rain Cha Am-Hua Hin 21%. In 2Q13, SIRI will expand into new segments, low-end
SDH (Bt3mn/unit) and TH (Bt1.5mn/unit), via the introduction of two new brands. In
2H13, the company will boost its campaigns for projects in the provinces. Success in
these arenas will support future growth.
Industry’s largest backlog of Bt61.9bn. SIRI has Bt61.9bn in backlog, which will
provide income during 2013-2016. This secures 70% of our 2013 forecast, 47% of 2014
and 22% of 2015.
Weak 1Q13F. We estimate quarterly net profit of Bt263mn, -22% YoY and -85% QoQ.
Despite the solid presales, revenue recognition was low at just Bt4.8bn in 1Q13, below
our earlier anticipation, due to a focus on finishing uncompleted units transferred in
4Q12. Also, there is a mismatch between marketing expenses to bring in condo
presales and revenue, since revenue to cover this doesn’t come until a few years later
when the building is completed and units transferred – particularly noticeable this
quarter since presales were so strong. We look for a jump QoQ in 2Q13. Results will out
on May 13.
BUY: sector top pick. We like SIRI’s savvy strategy and strong brand franchise. Its
expansion to the provinces provides a superior growth outlook. It has high visibility
with the largest backlog among peers that will secure income through 2016. We
estimate favorable 3-yr earnings CAGR of 23% during 2013-2015. With attractive TTR of
61%, we reiterate BUY and keep it as the sector’s top pick.