20170303-辉立证券-Cautious_business_targets,_modest_growth_seen_for_FY17_14页_1mb

Quality Houses Summary

核心内容

Quality Houses (QH) is a property development company primarily engaged in residential and income properties. The report outlines its financial performance for FY16, business targets for FY17, and the current valuation and financial metrics. It also discusses potential strategies for managing its inventory and the company's corporate governance.

主要观点

• QH reported a 1% year-on-year decline in net profit for FY16 to Bt3.08bn, due to a 7% drop in property sales revenue and a 34% decline in condo revenue.
• The company's condo presales remained sluggish, with projects like Q Sukhumvit only 19% sold out and Trust Condo Erawan and Casa Condo Bang Yai having an average take-up rate of 38% and 67%, respectively.
• QH plans to focus on selling outstanding condo inventories in FY17 to lower inventory levels, and has increased the value and number of SDH/TH launches.
• Despite missed presales targets, QH is expected to achieve a 4% year-on-year growth in net profit for FY17, driven by equity income from affiliates and positive growth in HMPRO and LHBANK profits.
• The dividend policy has been changed to consider operating results, financial positions, liquidity, and expansion plans, making future dividends less predictable.

关键信息

• Dividend Yield: QH's dividend yield is around 4.6% for FY17 and 3% for 2HFY16, supporting its share price.
• Valuation: QH's P/E ratio for FY17 is 8.5x, slightly below its historical average of 8.5x, but the dividend yield provides support.
• Valuation Ratios:
  • P/B ratio for FY17 is 0.8x, indicating a discount to book value.
  • Net Profit Margin for FY17 is expected to rise to 16.58%, up from 16.00% in FY16.
• Balance Sheet:
  • Total Assets for FY16 were Bt53,014mn, with Total Liabilities at Bt30,075mn.
  • Equities stood at Bt22,940mn, and BVPS was 2.14 Bt.
  • Debt/Equity ratio for FY16 was 1.3x, down from 1.7x in FY15.
• Cash Flow:
  • CFO for FY16 was Bt1,515mn, and Cashflow from financing was Bt897mn.
  • Net change in cash was Bt1,379mn.
• Key Financials:
  • Revenue for FY16 was Bt19,282mn, with a 4% year-on-year growth expected for FY17.
  • Net Profit for FY16 was Bt3,085mn, and net profit for FY17 is expected to rise to Bt3,209mn.
  • EPS for FY16 was Bt0.29, and is expected to increase to Bt0.30 for FY17.
• Business Development:
  • QH has a history of selling properties to affiliated entities like QHHR and QHPF.
  • In 2012, QH acquired 30% of QHHR.
  • In 2006, QH acquired 26% of QHPF.
  • In 2001, QH sold 20% of new shares to GIC.
• Risk Factors:
  • Economic growth, employment rate, and interest rate.
  • Demand and supply balance in the residential housing market.
  • Government investment policies.
• Peer Comparison:
  • QH's P/E ratio is 9.3x, while LH has a P/E ratio of 13.5x.
  • QH's P/BV ratio is 1.2x, and LH has a P/BV ratio of 2.5x.
  • QH's dividend yield is 6.1%, while LH has a dividend yield of 7.1%.

结论

The report concludes with a 'Neutral' recommendation for QH shares, citing the Bt2.55/share target price. It acknowledges the modest profit growth and challenging presales performance but highlights the supportive dividend yield and potential for inventory clearance as key factors in its valuation.