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Quality Houses PCL: 1Q21 miss; expect a QoQ profit rebound for 2Q21

  • Below our estimate and the street
  • QH posted a 1Q21 net profit of Bt431m
  • The YoY and QoQ core profit slump was due to lower QoQ sales

In the short-term, the market is likely to sell down the stock, due to the disappointing 1Q21 result. That would open a window to take positions, as the QH’s share price remains below the value of its investments (and hasn’t priced in the core residential business at all). Our model indicates investment value of Bt2.4/share, a 10% discount to the Bt28bn aggregate value of HMPRO (20% holding), LHFG (14%), QHPF (26%), and QHHR (31%). Our TRADING BUY call stands to an SOTP-derived target price of Bt2.70 (a targeted residential PER assumption of 9x).

Below our estimate and the street

QH posted a 1Q21 net profit of Bt431m, down by 16% YoY and 26% QoQ. The result was 13% below our estimate (a 280bps slimmer core margin than assumed) and 18% short of the consensus.


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