Earnings Report /
Thailand

Quality Houses PCL: Deeply below our expectation

  • Below our estimate and the consensus

  • QH posted a 3Q21 core profit of Bt263m

  • We expect 4Q21 core earnings to be flat YoY but recover QoQ

Phoowadol Phoosodngern
Bualuang Securities
11 November 2021

In the short run, the stock price may drop on market disappointment over the 3Q21 result. But QH currently trades at 15% below its total investment value—HMPRO (20% stake), LHFG (14%), QHPF (26%), QHHR (31%), and rental property assets of Bt2.74/share. We have a TRADING BUY call with an SOTP-derived target price of Bt2.50, pegged to a residential PER of 9x and investment value of Bt2.3/share (a 15% discount to market value).

Below our estimate and the consensus

QH posted a 3Q21 core profit of Bt263m, down by 54% YoY and 45% QoQ. The result was 37% below our estimate (and 16% shy to the consensus), mainly due to 17% lower sales, 2% slimmer sales GM, and 22% lower equity income than assumed.