Equity Analysis /
Thailand

Land & Houses PCL: 5-P: Why LH is the best ResProp play

  • Presales—right products at the right time

  • Premium—Grande Centre Point Space Pattaya lifts off

  • Pre-ignition—rental income will jump

Bualuang Securities
27 September 2022

Historically, LH’s stock has typically traded at a significant valuation premium over readily-comparable peers. In this report we argue the reasons (5-P) that we believe it deserves a premium again. We also went to Pattaya during the weekend to check out LH’s new hotel, Grande Centre Point Space Pattaya, which has a 90% occupancy rate only a month after opening. Premium valuation deserves as it had in 2018-19.

Presales—right products at the right time

In August, LH launched two high-end housing projects, Nantawan Rama9-New Krungthep Kritha, NRNKK (Bt5.2bn project value, starting at Bt38m/unit) and Nantawan Pinklao-Kanchana, NPK (Bt6.1bn, Bt34m/unit). Within a month of launch, NRNKK saw a lot of interest among home buyers; we expect it is already 30% booked. Similarly, NPK was more than 20% presold within a month, we believe. The right products at the right time will drive LH’s 3Q22 presales. Our 3Q22 presales assumption is Bt7.9bn, up by 20% YoY and 7% QoQ, which would make for 9M22 presales of 74% of LH’s 2022 target of Bt31bn.