Pruksa Real Estate

Pruksa Real Estate (PS)

Q2 2013 profit projected at B1.32bn, growing 71% qoq, 32% yoy
In 2Q13, PS had opened 14 projects (2 condominiums, 10 townhouses and
2 single-detached houses) which could make presales at B10.3bn, raising
PS's overall 1H13 total presales to B22.7bn, or 65% of year's goal. This
reflects that the strategy was in line with the markets' demand. PS opened
new 33 projects, with total value of B33bn (6 condominiums). 2Q13 sale
income recognition is projected at B9.05bn, rising 43% qoq and 33% yoy,
consisting of B1.61bn from transferring condominiums, B4.86bn from
townhouses, and the rest from single-detached houses. Gross margin is
projected to stay close to 1Q13 at 34.2%, but as profit base rose rapidly,
SG&A/sale dropped to 15.3%, pushing norm profit margin to 14.6%. PS's
2Q13 net profit and norm profit is projected at B1.32bn, leaping 71% qoq
and 32% yoy.
- Q3 2013 likely to have magnificent earnings continuously
2H13 direction is still aggressive. PS has planned to open 45 more projects
(7 condominiums). Most significant projects are around Siam Paragon, BTS
Saphan Khwai and Kasetsart University, at the total value of at least B5bn.
For income recognition at the end of 2Q13, backlog that will be booked as
income in 2H13 is B24.6bn (B8.56bn from condominiums), if sum up with
1H13 income recognition, it would exceed our FY2013 income goal
(B34.6bn). From these factors, PS's 3Q13-4Q13 earnings would grow
greatly and continuously. For FY2014, the earnings are projected to be
driven mostly by opening of horizontal projects. Recently, PS has bought
100 rai additional lands around Pattanakarn to be the main project for
growth.
- PER just 8x, recommend "BUY". [email protected]”
Stock price that drastically fell in over 1 previous month is not in line with
the fundamental factors that have obviously improved. The outcome
lowered PS's PER at current price to 8x. As 2013 EPS is projected to grow
by 40%, we recommend "BUY". FV at PER of 14x is B34.55.