Equity Analysis /

Thailand: Residential Property - Quality growth profiles, compelling valuations

  • Aggregate core earnings should mark YoY and QoQ rise

  • Heaviest launch quarter of the year will boost 3Q22 sales

  • Risks have diminished and valuations are compelling

Bualuang Securities
22 July 2022

Strong growth and compelling valuations make 2Q22 an interest-ing quarter. SIRI will post earnings leadership. 2Q22 project launches were the heaviest since 2019 and that growth will continue through 3Q22 (up YoY and QoQ). But our ResProp coverage’s mean PER is now 1SD below its long-term average. LH and AP are our top picks. And we suggest accumulating SIRI in anticipation of strong YoY and QoQ growth.

Aggregate core earnings should mark YoY and QoQ rise

Our models point to an aggregate coverage 2Q22 core profit of Bt7.6bn, up by 9% YoY and 15% QoQ. Aggregate residential revenue is assumed at Bt46bn, flat YoY and up 13% QoQ. 2Q22 project launches totaled Bt65bn, up by 140% YoY and 63% QoQ. We assume residential GM of 33.2% in 2Q22, up from 32.4% in 2Q21 (a big COVID-19 outbreak led to price discounting) and 32.7% in 1Q22.