Equity Analysis /
Thailand

Thai:Residential Prop- Soft 1Q22 earnings expected, followed by a surge for 2Q22

  • Coverage earnings should mark a YoY rise (but a QoQ decline)

  • Transference rescheduled to 2Q22 will boost that quarter

  • Too early to talk about earnings downside risk at this time …

Phoowadol Phoosodngern
Bualuang Securities
29 April 2022

1Q22 will prove the weakest quarter of 2022, as many ResProp firms delayed transference to 2Q22 (which will boost 2Q22 numbers). AP will mark profit leadership for the quarter. But the mean PER of our ResProp coverage PER is now above its long-term mean. Also, there are market concerns over the risk of cost-push inflation and pared-back business plans in 2H22. LH is our top pick and we suggest letting profits run on AP.

Coverage earnings should mark a YoY rise (but a QoQ decline)

Our models point to an aggregate coverage 1Q22 core profit of Bt6.6bn, up 22% YoY but down seasonally 19% QoQ. Aggregate residential revenue is assumed at Bt41bn, flat YoY and down 21% QoQ (heavy transference of Bt52bn in 4Q21). We expect residential GM of 32%, up from 30.5% in 1Q21 (when there was deep price discounting) but down from 33.8% in 4Q21. Among our coverage, AP is far outpacing the pack—we estimate a record core profit of Bt1.6bn, up by 25% YoY and 66% QoQ. Given its deeply low 1Q21 and 4Q21 numbers, LPN should mark a surge in core earnings of Bt163m, up by 33% YoY and 408% QoQ. We expect both LH and QH to post YoY core profit growth (flattish QoQ). Only ANAN will report a core loss for 1Q22.