Residential Property

Residential Property 

 

Profit in 2Q15 is expected to grow both YoY and QoQ, backed by top line growth and economies of scale. Within our universe, LPN and SIRI will lead thanks to higher deed transfers and good SG&A controls, while LH and QH are at risk of not reaching our full year forecasts. With more new launches and backlog, we expect both presales and profit to rise HoH in 2H15.  

 

2Q15F better YoY and QoQ. We look for the seven developers in our coverage to report aggregate net profit growth of 6% YoY and 45% QoQ, largely from economies of scale. Though margin has narrowed YoY, top line growth and good control over SG&A more than make up for this. On a QoQ basis, higher revenue pushed net profit. 1H15 profit is expected to be flat YoY. 

 

Best performers – LPN and SIRI. LPN and SIRI will exhibit strong earnings growth both QoQ and YoY in 2Q15 on higher condo deed transfers plus good control over SG&A. Net margin widened for both. 

 

LH and QH: meeting forecast will be a challenge. 1H15 profit is expected to reach ~40% of 2015 forecast for LH and 33% for QH. With poor low-rise presales - generally generating revenue a few months after sale – LH and QH may not reach forecasts.