We have slashed our profit forecasts for 2022 and 2023, due to lower expectations for project transference. Another loss will be marked for 2Q22 but we expect a turnaround in 2H22, led by the completion of three new projects (Bt16bn in total value). Our HOLD call stands, but our target price shifts down from Bt1.50 to Bt1.30, we suggest re-considering after 2Q22 results.
Earnings forecast cuts
For 2022, we have slashed our core profit forecast by 72% to Bt130m (ANAN marked a core loss of Bt594m for 2021), due lower expectations for project transference and a net loss at JV projects in 1Q22. Our 2023 core profit forecast is now 38% lower at Bt371m. Our 2022 top-line projection is cut 16% to Bt4.1bn (up 14% YoY). Residential GM is assumed at 23.7% in 2022 and 24.5% in 2023, far below ANAN’s pre-COVID-19 era 10-year mean of 33.7%, due to promotional pricing to clear unsold inventories (Bt18.4bn at end-Mar 2022). The expected 2022 turnaround to profit will be driven by the completions of three new condos—IDEO Charan70-Riverview (Bt3.7bn project value, 77% booked), IDEO Rama9-Asoke (Bt6.8bn, 46% booked), and COCO PARC (Bt5.0bn, 7.6% booked). We expect another core loss for 2Q22.