Central Pattana

Central Pattana Plc (CPN)

2Q13 net profit is B1,427m, growing 22%yoy

2Q13 net profit was B1,427m, growing 22%yoy. The norm profit was
B4,862m, increasing 17.6%yoy due mainly to income from shopping
centers (91% of total income), especially the recently opened ones
(Suratthani and Lampang in 4Q12, with total leasable areas of 54,000
sqm, 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. Income from the
food and beverage business (5% of total income) shifted 24%yoy
following the new shopping centers opening, while the hotel business (4%
of total income) grew 24%yoy following the tourism business and
additional income from its hotel in Udornthani after the renovation finished
in December 2012. Gross margin rose to 46.7% from 44.3% in 2Q12. Net
gearing at end-2Q13 dropped to 0.53x.
- To open 2 new shopping malls. Asset sale to property fund in 4Q13
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 128,000 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). 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, implying 37% upside
2013 fair value, using DCF-WACC of 8.4%, is B63.00/share, implying 37%
upside. We reiterate BUY. Our forecast and fair value have still not
included the asset sale plan and a new project in Rayong and Malaysia.