Central Pattana

Central Pattana Plc (CPN)

2Q13 profit to grow 22%yoy from new shopping malls and increasing rental fee
We estimate 2Q13 net profit at B1,430m, growing 22%yoy due mainly to
strong growth existing shopping centers that have had full occupancy and
continuously hiking rental fee rate. Moreover, the company could generate
additional income from new shopping centers opened (Suratthani and Lampang
in 4Q12 and Ubon Ratchathani in April 2013). As a result, total leasable area of
shopping centers under CPN’s operation at end 2Q13 increased 6.6%yoy;
average occupancy rate of all projects stood high at 97%, while average rental
fee shifted 4%yoy to B1,499/sqm/month. Overall, we estimate income from
operation at B4,777m, thriving 15.5%yoy, while gross margin is projected to
rise to 47% from 44.3% in 2Q13. Net profit margin is anticipated at 30%, up
from 28.3% in the same period last year.
- 2H13 outlook - 2 new shopping malls, asset sale to property fund
2H13 outlook is still prosperous. Every shopping mall is projected to generate
higher income; the steady growth would come from the high occupancy rate of
more than 95% and the average rental fee hike of 6-8%. Moreover, there
would also be additional income from the 3 new shopping centers opened, as
mentioned above, as well as 2 new – Chiang Mai 2 and Hat Yai with combined
leasable area of 122,000 sqm, which will be opened in November – December
2013. Moreover, the company also has a plan to sell B12.6bn-worth Chiang Mai
Airport shopping center to CPNRF, which will not only generate income of
around B8-9bn for the company (from its 27.8% stake in CPNRF), but also an
extraordinary profit after tax of around B3-4bn (or the profit per share of
B0.62-0.89), which would support 4Q13 profit to be the peak of the year. For
FY2013, norm profit is estimated at B5.53bn, increasing 25.5%yoy. However,
with the dilution effect from PP capital increase of 130.368 million shares, norm
EPS in 2013 would increase 22%yoy.
- Buy. 2013 fair value is B63.00
We reiterate BUY. 2013 fair value, using DCF-WACC of 8.4%, is B63.00/share.
Our forecast and fair value have still not included the asset sale plan and a new
project in Rayong.