Equity Analysis /
Thailand

AP Thailand PCL: The ResProp play for 1Q22

  • Strong presales and earnings expected

  • Rising costs a threat to margins? Not so much for AP

  • Good earnings outlook for 2022 (and scope for upside)

Phoowadol Phoosodngern
Bualuang Securities
30 March 2022

AP’s stock price should rally ahead of proof of a strong core profit for 1Q22 (flat YoY, up sharply QoQ) and stay elevated as its XD date draws near. We also expect hefty 1Q22 presales growth (record low-rise bookings). And AP looks set to mark record resi-dential transference for the quarter, which could trigger forecast upgrade flows. We see only limited downside risk tied to higher costs. Our YE22 price target is Bt12, pegged to a PER of 8.0x.

Strong presales and earnings expected

The firm is on-track to achieve its 2022 presales target of Bt50bn (up 42% YoY). We assume bookings of Bt13.5bn for 1Q22 (up by 70% YoY and 73% QoQ and 27% of management’s full-year target), concentrated in low-rise. 1Q22 low-rise bookings are assumed at Bt11.5bn (a new record), up by 58% YoY and 51% QoQ; we expect condo presales of Bt2.0bn, up by 200% YoY and 830% QoQ. We preliminarily estimate 1Q22 core earnings at Bt1.25bn, stable YoY (a high 1Q21 number) and up by 20-25% QoQ, led by record transference.