Earnings Report /
Thailand

Land & Houses PCL: 2Q20 result beat the street, but missed our estimate; stronger 3Q20 outlook

  • Core earnings missed our estimate

  • LH reported a net profit of Bt1.4bn for 2Q20

  • Core profit was 12% below our estimate

Bualuang Securities
14 August 2020

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).