SC Asset eyes 10% annual revenue growth through 2019

"We also expect our net profit margin will increase from 12-13 per cent last year to 15 per cent in 2019 under the policy to drive sustainable growth," chief operating officer Nuttaphong Kunakornwong told a press conference yesterday.

The developer plans to invest Bt13 billion this year – Bt5.2 billion for buying vacant land to develop residential projects from 2016-17, Bt6.8 billion for constructing infrastructure at its residential projects and Bt1 billion for building its new office building, Shinawatra 4, on Phahonyothin Road, which will be completed next year and opened in 2017.

Over half of its capital expenditure budget will come from internal cash flow and the rest from issuing debentures worth Bt3 billion this year.

The company plans to launch seven residential projects worth Bt14 billion this year.

Four will be detached-housing projects worth Bt6.34 billion and the other three condominium projects worth Bt7.66 billion. One of the four estates will aim at the middle market by offering units priced at Bt3 million to Bt5 million under the Pave brand on Rangsit Khlong 4. This is its first project priced lower than Bt5 million per unit.

Pave is the new brand for the middle market. The company sees strong demand in this segment.

"We target in 2019 for up to 10 per cent of our revenue to come from residences at prices ranging from Bt3 million to Bt5 million per unit," Nuttaphong said.

About 90 per cent of its revenue comes from residences priced from Bt5 million to more than Bt40 million, and 10 per cent from rental income from its office buildings.

Meanwhile, about 60 per cent of revenue from sales in residential projects came from detached homes and townhouses, and 40 per cent from condos.

The company targets 97 per cent of revenue home sales, and the remaining 3 per cent from rental income.

About 60 per cent of revenue from home sales will be low-rise residences such as detached houses and townhouses and 40 per cent from condo sales in 2019. About 10 per cent of home-sale revenue will come from those priced between Bt3 million and Bt5 million that year.

The company expects its revenue last year was about 20 per cent higher than its estimate of Bt12 billion, while its net profit margin will be more than 12 per cent. It will disclose its 2014 results to the Stock Exchange of Thailand at the end of this month.

It also recorded presales of Bt8.5 billion last year.

It sits on a backlog worth Bt8.8 billion, of which nearly half or Bt4 billion will be booked as revenue this year and the rest next year.

The company also targets revenue growing at less than 10 per cent this year.

It has continued to concentrate on the middle-to-upper-income market as it sees strong demand in this business and lower competition.

"Our customers facing loan rejections amounted to only 5 per cent of our total portfolio. That means our customer target – middle and upper income – is the right way to do business during a time when household debt is rising," Nuttaphong said.

Demand for luxury residences – both low-rise and condos – will continue expanding by 15-20 per cent and help stimulate the overall property market to grow 5-10 per cent this year, thanks the economy recovering this year, he said.

Gross domestic product is projected to pick up 3.5-4 per cent this year thanks to government spending injecting life into the economy.