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denniswuTypewriterEditor:Frankie WongTel: (852) 2277 6765Email: [email protected]
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THAILAND EQUITY RESEARCH
Page | 1 | PHILLIP SECURITIES (THAILAND)
AP (Thailand) New projects see strong presales but shares look expensive THAILAND | SET | PROP | COMPANY VISIT BLOOMBERG AP TB l REUTERS AP.BK FY16 presales likely meets target as momentum builds up in May AP registered a slight decline in 1QFY16 presales, down 1% y‐y to Bt4.5bn. SDH/TH presales stayed flat at Bt3.1bn but condo fell 5% to Bt1.4bn. Presales remained sluggish at Bt1.3bn in April—SDH/TH at Bt805mn and condo at Bt500mn—blaming a greater number of holidays that resulted in lower site visits then presales. AP launched four home projects and arranged a soft launch of Life Sukhumvit 48 condo for VIP customers in May, and presales increased notably 104% m‐m to Bt2.6bn in the month with SDH/TH presales at Bt1.3bn (vs Bt805mn in April) and condo at Bt1.3bn (vs Bt500mn). Life Sukhumvit 48 generated 30%take‐up rate of Bt2.2bn project value and the presales were already close after an official launch early June. At the same time, AP also opened a Bt1.4bn phase III of Aspire Sathorn‐Taksin condo, which had small 8% take‐up rate as there are available units at the phase II that has had 60% take‐up. In the first five months of the year, presales reached Bt8.5bn, equivalent to 27% of AP full‐year target of Bt31bn. SDH/TH and condo presales at Bt5.2bn and Bt3.2bn represented 36% and 20% of the targets. We remain optimistic about AP presales target as the momentum is likely to build up over course of the year as AP plans to open nine SDH/TH projects worth a combined Bt9.7bn and five condos at least, and the ready‐for‐transfer condo project at Sukhumvit 39 is under renovation to attract more buyers. Bright earnings outlook into 2017 Backlog, including April‐May presales, was Bt10bn, dividing to SDH/TH backlog of Bt5bn and the rest belonging to condo. Combined with Bt4bn revenue in 1QFY16, AP on‐hand revenue is Bt14bn. To meet our estimated FY16 revenue of Bt22.5bn, the remaining Bt8.5bn would derive from SDH/TH presales and condo inventory. As for SDH/TH presales over the rest seven moths, we forecast presales of Bt1.2bn‐Bt1.3bn per month, which is above its average five months at Bt1bn, as AP will open many projects and most of which will be semi pre‐built that would allow AP to recognize revenue roughly Bt7.5bn over the period. Also, AP would recognize revenue of Bt1bn from its condo inventory and its ready‐for‐transfer two projects at Aspire Sathorn‐Taksin (phase III) and Sukhumvit 39. Gross margin would remain flat but SG&A expense would increase slightly. Its JV is expected to make profits this year. As such, we forecast a 6% net profit growth in 2016. Earnings are expected to rise further by 9% in 2017 with profit contribution expected to increase to Bt1bn from our estimated Bt87 this year as its JV is expected to recognize revenue as high as Bt8.6bn, secured by 84% backlog. ‘ACCUMULATE’ rating maintained with Bt7.10 target price Shares of AP increased by roughly 16% over the past two week until the stock trades near its historical P/E of 8x and dividend yield at only 4%. We thus reiterate our ‘ACCUMULATE’ rating with target price of Bt7.10.
Ref. No.: CO2016_0481
Closing Price(Bt) 6.75Target Price(Bt) 7.10 (+9.79%)
COMPANY DATA
O/S Shares (mn) : 3,146 Market Cap. (Btmn) :Market Cap. (USDmn) :52‐WK Hi/Lo (Bt) : 7.45/4.983M Average Daily T/O (mn) : 10.87Par Value (Bt) : 1.00
MAJOR SHAREHOLDERS (%)
1. Mr. Anupong Asavapokin 21.32. Thai NVDR Co.,Ltd. 13.13. NORTRUST NOMINEES LTD‐CL AC 5.9
PRICE PERFORMANCE (%)
1MTH 3MTH 1YRABS 16% 21% ‐3%REL TO SET INDEX 13% 17% 3%
PRICE VS SET INDEX
Source: Bloomberg, PSR
KEY FINANCIALS
FYE Dec FY14 FY15 FY16E FY17ESales(Btmn) 23,197 22,203 23,113 22,164Net Profit(Btmn) 2,615 2,623 2,793 3,039EPS (Bt) 0.83 0.83 0.89 0.97P/E (X) 8.1 8.1 7.6 7.0BVPS (Bt) 4.95 5.53 6.14 6.83P/B (X) 1.4 1.2 1.1 1.0DPS (Bt) 0.28 0.30 0.31 0.34Dividend Yield (%) 4.1 4.4 4.6 5.0ROE (%) 17.52 15.66 15.00 14.71Debt/Equity (X) 1.81 1.47 1.40 0.89
Source: Company, PSR Est.**Multiples and yields are based on latest closing price
VALUATION METHOD
P/E'16 (8x)
Danai Tunyaphisitchai, CFACapital Market Investment Analyst # 2375Tel: 66 2 635 1700 # 481
13 June 2016
21,235 603
12 May 2016
Accumulate (Maintain)
0246810
Jun‐13 Jun‐14 Jun‐15 Jun‐16
AP TB EQUITY SETI (rebased)
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Corporate Governance ‐2015
ADVANC BAFS BCP BIGC BTS CK CPN DRT DTAC DTCEASTW EGCO GRAMMY HANA HMPRO INTUCH IRPC IVL KBANK KCEKKP KTB LHBANK LPN MCOT MINT MONO NKI PHOL PPSPS PSL PTT PTTEP PTTGC QTC RATCH ROBINS SAMART SAMTELSAT SC SCB SCC SE‐ED SIM SNC SPALI THCOM TISCOTKT TMB TOP VGI WACOAL
AAV ACAP AGE AHC AKP AMATA ANAN AOT APCS ARIPASIMAR ASK ASP BANPU BAY BBL BDMS BECL BKI BLABMCL BOL BROOK BWG CENTEL CFRESH CHO CIMBT CM CNTCOL CPF CPI CSL DCC DELTA DEMCO ECF EE ERWGBX GC GFPT GLOBAL GUNKUL HEMRAJ HOTPOT HYDRO ICC ICHIINET IRC KSL KTC LANNA LH LOXLEY LRH MACO MBKMC MEGA MFEC NBC NCH NINE NSI NTV OCC OGCOISHI OTO PAP PDI PE PG PJW PM PPP PRPRANDA PREB PT PTG Q‐CON QH RS S & J SABINA SAMCOSCG SEAFCO SFP SIAM SINGER SIS SITHAI SMK SMPC SMTSNP SPI SSF SSI SSSC SST STA STEC SVI SWCSYMC SYNTEC TASCO TBSP TCAP TF TGCI THAI THANA THANITHIP THRE THREL TICON TIP TIPCO TK TKS TMI TMILLTMT TNDT TNITY TNL TOG TPC TPCORP TRC TRU TRUETSC TSTE TSTH TTA TTCL TTW TU TVD TVO TWFPTWS UAC UT UV VNT WAVE WINNER YUASA ZMICO
2S AEC AEONTS AF AH AIRA AIT AJ AKR AMANAHAMARIN AP APCO AQUA AS ASIA AUCT AYUD BA BEAUTYBEC BFIT BH BIG BJC BJCHI BKD BTNC CBG CGDCHG CHOW CI CITY CKP CNS CPALL CPL CSC CSPCSS CTW DNA EARTH EASON ECL EFORL ESSO FE FIREFOCUS FORTH FPI FSMART FSS FVC GCAP GENCO GL GLANDGLOW GOLD GYT HTC HTECH IEC IFEC IFS IHL IRCPITD JSP JTS JUBILE KASET KBS KCAR KGI KKC KTISKWC KYE L&E LALIN LHK LIT LIVE LST M MAJORMAKRO MATCH MATI MBKET M‐CHAI MFC MILL MJD MK MODERNMOONG MPG MSC MTI MTLS NC NOK NUSA NWR NYTOCEAN PACE PATO PB PCA PCSGH PDG PF PICO PLPLANB PLAT PPM PRG PRIN PSTC PTL PYLON QLT RCIRCL RICHY RML RPC S SALEE SAPPE SAWAD SCCC SCNSCP SEAOIL SIRI SKR SMG SOLAR SORKON SPA SPC SPCGSPPT SPVI SRICHA SSC STANLY STPI SUC SUSCO SUTHA SYNEXTAE TAKUNI TCC TCCC TCJ TEAM TFD TFI TIC TIWTLUXE TMC TMD TOPP TPCH TPIPL TRT TSE TSR UMIUP UPF UPOIC UREKA UWC VIBHA VIH VPO WHA WINXO
Score Range
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Anti‐corruption indicators
Level 5 (Extended)BCP CPN GYT PE PM PPP PT PTT PTTGC SAT sccTHANI TOP
Level 4 (Certified) DCC DTC DRT EASTW ECL EGCO ERW FSS GCAP HANA HTCINTUCH IRPC IVL KBANK KCE KGI KKP KTB LANNA LHBANK MTINKI PSL PTG PTTEP SABINA SCB SNC SNP SSF SSSC TCAP
THCOM TISCO TMB TMD TNITY TOG
Level 3 (Established)
Level 3A: Declaration to join CAC, etcABC ACAP ADVANC AGE AH AMANAH ANAN AP APCS APURE ASASIA ASIAN ASIMAR BIGC BROOK BTS BWG CEN CENTEL CFRESH CHARANCHO CHOTI CM CNT COL CPF CPI CPL DELTA DEMCO DIMETDNA DTAC EA ECF EE EVER FPI GBX GC GFPT GLOWHMPRO HOTPOT ICC ICHI IFEC INOX INSURE IRC JAS JTS JUBILEKC KTC KYE LHK LPN LRH MAKRO MC MCOT MFC MFECMINT MJD MONO MOONG NBC MSC NDR NINE NMG NSI NTVOGC PACE PCSGH PDI PG PHOL PLAT PPS PR PRANDA PREBPS QLT RATCH RML ROBINS ROJNA RWI SAMCO SCCC SCG SEAOILSE‐ED SENA SINGER SITHAI SMK SMPC SPALI SPC SPCG SPI SRICHASSI STANLY SUPER SVI SYMC SYNEX SYNTEC TASCO TCMC TFI THAITHRE THREL TICON TKT TLUXE TMILL TMT TNL TPCORP TSTE TSTH
TTCL TU TVI UOBKH UREKA VGI VNT WACOAL WHA ZMICO
Level 3B: Organization's statement but no declaration to join CAC, etcAAV AHC AIT AKR ARROW ASK BA BDMS BEC BJCHI BUICGH CHG CHOW CIG CITY CK CKP COLOR CWT EARTH EASONEPG F&D FANCY FIRE FMT FORTH GENCO GL GOLD GPSC GRAMMYHYDRO IRCP IT JCT KCM KWC LH LIT LOXLEY MACO MANRINMATI MODERN MSC NOBLE NOK NPK NUSA OISHI OTO PAF PAPPATO PF PJW PLANB PLE POLAR PRG PTL Q‐CON QTC RCIS11 SALEE SAM SAMART SAMTEL SAPPE SC SCP SFP SIM SLPSMT SPA SPORT SSC SST STEC STPI SUC SUTHA SVI TTBSP TAE TCC TFD TGCI TGPRO THANA THIP TIW TK TMWTNDT TOPP TPC TPCH TPIPL TSR TT TYCN UAC UBIS UECUMI UP UPF UT UV VPO WAVE WINNER YUASA
Level 2 (Declared)2S ABICO AF AKP AMARIN AMATA AOT APCO AYUD BEAUTY BFITBH BKD BLAND BTNC CCP CI CSR CSS EFORL EPCO FEFNS FVC GEL GLOBAL HEMRAJ IEC IFS INET JUTHA KASET KCARKKC KSL L&E LALIN LTX M MALEE MBK MBKET MEGA MKMPG MTLS NCH NCL NPP OCC OCEAN PB PCA PRINC QHROCK RPC S & J SGP SIAM SIS SKR SMG SMIT SORKON SUSCOTAKUNI TEAM TF TIC TIP TIPCO TMC TMI TPP TRT TRUTRUE TSC TSI TTW TVD TVO UKEM UNIQ UWC VNG WIIKWIN XO
Level 1 (Committed)ACD AEONTS AFC AIRA AJ ALUCON AMC AQUA ARIP AUCT BAT‐3KBIG BJC BOL BRR BSBM CBG CCET CCN CGD CMR CPHCSC CSP CTW DCON DRACO DSGT DTCI E EMC ESSO FOCUSFSMART GIFT GLAND GRAND GUNKUL HFT HTECH ILINK ITD JSP IHLKDH KTIS KTP LEE LST MAJOR MAX M‐CHAI MDX MIDA MATCHML MPIC NC NEP NNCL OHTL PICO PK PL PPM NWRPRAKIT PRECHA PRIN PSTC RAM RICH RS SANKO SAUCE SAWAD PYLONSAWANG SCN SEAFCO SHANG SIRI SMART SMM SOLAR SPACK SPG SFSPPT SPVI STAR SVH SVOA SWC TAPAC TC TCCC TCJ STATCOAT TKS TNH TNPC TPA TPAC TPOLY TRC TRUBB TSE TTATTI TTL TTTM TWP TWZ U UMS UPA UPOIC UVAN UTPVARO VI VIBHA VIH VTE WG
Data not available/No policyA ACC AJD AQ BCH BGT BROCK BSM BTC CHUO CRANECPR EIC FER JMART JMT KAMART KBS KIAT LDC MCS METCOMBAX NEW NEWS NYT PAE PDG PERM PMTA RCL RICHY ROHPOST S SIMAT TCB TR TSF TVT
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Anti‐corruption indicators
Level 5 : Extended
Anti‐corruption policies extend to business partners, dealers, and distributors.
Level 4 : Certified
Anti‐corruption policies can be engaged by audit committee and auditors approved by the SEC.
Anti‐corruption policies are certified by CAC and independent assurance providers.
Level 3 : Established
Anti‐corruption corruption policies cover anti‐bribery, and communications and educating all employees anti‐corruption policies.
Level 3A Public out statement to join CAC, etc.
Level 3B Declare statement and organization’s anti‐corruption policies but no intention to join CAC, etc.
Level 2 : Declared
Declare statement to participate CAC against corruption.
Level 1 : Committed
Organization and Board of Directors’ statements against corruption and not getting involve in any malpractices.
AssessmentAnti‐corruption progress indicator for listed companies is a part of SEC’s commitment to create sustainability in anti‐corruption and to become a role model to any
related business. The progress indicators comprise of five levels: 1) Committed, 2) Declared, 3) Established, 4) Certified, and 5) Extended. These indicators will
encourage listed firms to formulate anti‐corruption policies to opt out of corruption, and investors can determine their investment based on anti‐corruption indicator
or avoid investment in listed firms that could get involve in corruption.
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Industry Group Name Sector Name Sector IndexAgro & Food Industry[AGRO] Agribusiness AGRI
Food & Beverage FOODConsumer Products[CONSUMP] Fashion FASHION
Home & Office Products HOMEPersonal Products & Pharmaceuticals PERSON
Financials [FINCIAL] Banking BANKFinance & Securities FINInsurance INSUR
Industrials [INDUS] Automotive AUTOIndustrial Materials & Machinery IMMPackaging PKGPaper & Printing Materials PAPERPetrochemicals & Chemicals PETROSteel STEEL
Property & Construction[PROPCON] Construction Materials CONMATConstruction Services CONS Property Development PROPProperty Fund & REITs PF&REIT
Resources [RESOURC] Energy & Util ities ENERGMining MINE
Services [SERVICE] Commerce COMMMedia & Publishing MEDIAHealth Care Services HELTHTourism & Leisure TOURISMProfessional Services PROFTransportation & Logistics TRANS
Technology [TECH] Electronic Components ETRONInformation & Communication Technology ICT
PSR Rating SystemCapital Gain Recommendation> 15% BUY> 5% ‐ 15% ACCUMULATE / TRADING BUY> 0% ‐ 5% NEUTRAL0
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