Equity Analysis /

AP Thailand PCL: Best ResProp play; high condo presales could boost sentiment

  • Two new Aspire-branded condos to lead presales growth in June

  • Two condos fully transferred! And one more to come

  • Strong YoY profit growth expected for 2Q22

Phoowadol Phoosodngern
Bualuang Securities
23 June 2022

AP’s stock price should rally ahead of proof of a strong 2Q22 core profit, up YoY (drop QoQ from the record high marked for 1Q22). We also expect hefty YoY presales growth for the quarter (strong low-rise bookings and two new condos). The stock trades at 14% below its long-term mean PER of 7.0x. We have a BUY call to a YE22 target price of Bt13, pegged to a PER of 8.0x.

Two new Aspire-branded condos to lead presales growth in June

The 2Q22 project plan of Bt16.2bn is on-track (up from a deeply low base of Bt4.5bn in 2Q21 and Bt9.2bn in 1Q22). Next week, AP will launch another seven low-rise projects valued at Bt6.0bn and two condos worth Bt5.6bn (Aspire Ratchayothin, Bt1.4bn, and Aspire Sukhumvit-Rama4, Bt4.2bn). We expect strong initial take-up rates of 30-35% for the condos (Bt1.7-2.0bn in presales) in 2Q22. Our 2Q22 presales assumption is Bt13bn, up 32% YoY (flat QoQ) and 26% of management’s full-year target), concentrated in low-rise. 2Q22 low-rise bookings are assumed at Bt11bn, up 15% YoY (flat QoQ). We expect condo presales of Bt2.5bn, up by 251% YoY and 16% QoQ. Our 1H22 presales assumption is Bt26bn, (52% of AP’s 2022 target).