Equity Analysis /

Thailand: Residential Property - Cheap valuations and strong presales!

  • AP, SPALI, and LH to post strongest 2Q22 presales

  • Modest YoY and QoQ profit growth expected for 2Q22

  • Heavy project launch and condo transference schedule for 3Q22

Bualuang Securities
12 July 2022

The slides in ResProp stock prices have largely priced in concerns over higher financing and construction costs, we believe. Our coverage trades at a mean 2022 PER of just 8.5x, almost 1SD below its historical mean. We currently prefer AP (a compelling valuation and a strong outlook) and LH (a profit surge from heavy condo transference in 3Q22).

AP, SPALI, and LH to post strongest 2Q22 presales

Our aggregate coverage 2Q22 presales assumption is Bt58bn (74% low-rise, 26% condo), up by 12% YoY and 11% QoQ. Low-rise presales are expected at Bt43bn, up by 5% YoY and 6% QoQ. Condo presales should be Bt15bn, up by 41% YoY and 27% QoQ, led by heavy condo launches in 2Q21 (Bt16bn in total project value, up by 776% YoY and 26% QoQ). We expect AP, SPALI, and LH to lead 2Q22 presales—Bt13bn for AP (up by 28% YoY and flat QoQ), Bt9.4bn for SPALI (up by 62% YoY and 6% QoQ), and Bt7.5bn for LH (flat YoY and QoQ). ANAN should mark Bt3.9bn in presales, up by 19% YoY and 78% QoQ from deeply low 2Q21 and 1Q22 bases. Among our ResProp coverage, QH is likely to report the weakest 2Q22 presales.