Pruksa Real Estate

Pruksa Real Estate (PS)

5M14 sales makes up 32% of FY2014 sales target
May presales were reported at B3,365m (B2.8bn from horizontal
projects, B570m from condominiums), rising from B2.1bn in April (long
holiday), but dropping from B4.6bn in March (the largest presales in
2014). While many condominiums were launched in March, only one
condominium was launched in May 2014: Fuse MiTi (Sutthisan -
Ratchada); 16% of its total rooms have been transferred. We project
2Q14 presales to improve from B8.20bn in 1Q14. 5M14 presales were
B13.6bn, making up 32% of FY2014 presales target of B41-45bn. PS
has planned to launch 30-50 new projects in 2014 (mostly horizontal
projects), with the total value of B30-50bn. However, we maintain our
forecast, conservatively projecting FY2014 presales at B38.5bn (lower
than the company's target). PS has planned to launch 5-8 new
condominiums and 34-41 new horizontal projects this year; take-up rate
of horizontal projects is usually lower than condominiums.
- Maintain forecast. 2014 income to drop 4%
We project FY2014 total income at B37.2bn, falling 4.2%yoy, lower than
the company's target of B40-42bn due to the following reasons: 1) Total
condominium transfer is expected to drop from B8.5bn in 2013 to B7.2-
7.6bn in 2014; 2) Backlog of horizontal projects is expected to fall to
B9bn. Because 1Q14 presales contracted yoy, PS is not likely to
generate strong income for the remainder of the year. End-1Q14
backlog was B38bn, B9bn from horizontal projects (fully booked in
2014) and B28.7bn from condominiums (B6.6bn will be booked in
2014), making up 64% of our FY2014 income target.
- Price surges 50% YTD. Downgrade from BUY to SELL
Share price has surged 50% (YTD), exceeding FY2014 fair value of
B24.62 with 10x P/E ratio. We downgrade our recommendation from
BUY to SELL