The good 2Q20 result should boost market sentiment toward LH. Strong presales and earnings are expected for 3Q20, supported by the launches of seven low-rise projects (total value of Bt9.5bn, up 96% YoY, flat QoQ). The stock trades at a 2020 PER of 13.4x (a 7% discount to its 2006-19 mean) and a generous 6.3% dividend yield. Our BUY call stands to a SOTP-derived target price of Bt9 (a residential PER target of 11x and Bt5.3/share of investment value).
Core earnings missed our estimate
LH reported a net profit of Bt1.4bn for 2Q20. Excluding a Bt42m net FX loss and a gain on derivatives, core earnings would be Bt1.35bn, down by 27% YoY and 12% QoQ. Core profit was 12% below our estimate, due to a slimmer residential GM and lower equity income than assumed (but was 7% above of the consensus). LH announced a DPS for 1H20 of Bt0.20, a 2.6% simple yield (XD Aug 27, payment Sep 11).