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Sansiri PCL: Back in the spotlight

  • Earnings forecast upgrade
  • Shaping up for a strong 2Q21; scope for upside to 2H21
  • Easing inventory pressure

We have upgraded our SIRI call from HOLD to BUY and our YE21 target price from Bt0.85 to Bt1.60 (due to a higher profit forecast), pegged to a PER of 12.5x (1SD above its 2006-20 mean). The stock current trades at a 40% discount to its end-Mar BV of Bt2.22 (excluding a perpetual bond). Residential business is recovering. Also, SIRI has invested in X-Spring Capital, a securities company that has plans to tokenize real estate assets through ICOs.

Earnings forecast upgrade

We have upped our 2021 core profit forecast by 14% to Bt1.86bn, as we have increased our assumptions by 15% for residential sales and by 230bps for GM (Figure 1). Our 2021 residential sales expectation is now Bt25.2bn, of which 76% should be secured by the end-June presales backlog. Residential GM will recover from a 15-year low of 25.0% in 2020 to 30.0% in 2021 (SIRI’s target range is 30-31%). The firm revised up its 2021 presales target from flattish to 17% growth to Bt30.7bn (of which 46% should be marked in 1H21). The residential revenue target for this year is Bt27.6bn, up 13% YoY. Management plans Bt21.6bn in new launch value (72% low-rise, 28% condo), up 44% YoY.


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