CGS-CIMB cuts pre-sales targets for 9 property companies by 7% to 253 billion baht, while total pre-sales expected for this 3-year curve will be lower than expected at 58.8 billion baht, down 14.5% after interest rates rise – Slowdown of the economy. Mitigation measures end. LTV recommends neutral. The real estate group supports AP – ORI – SIRI as the best choices.
CGS-CIMB (Thailand) Research Department revealed that it has revised its pre-sale estimates for this year (2023) for the property group down 7.0% to 253 billion baht from the original 272 billion baht, reflecting overall lower-than-expected third-quarter resale expectations by Revised presale estimates for AP, LH, LPN, PSH, SPALI and SIRI are down 4.8-14.3%, but revised presale estimates for QH, ORI and ANAN are up 1.1-10.2%.
However, based on new estimates in the fourth quarter, the real estate group will see pre-sales increase by 26% quarter-on-quarter to 74.15 billion baht, eyeing improved market sentiment, higher economic expansion, interest rate stabilizing at 2.5%, and the launch of New plans. Projects increased. Including real estate development companies, more promotional campaigns will be organized. To stimulate sales in Q4, the companies that will see a significant increase in pre-sales in Q4 are SIRI 102%, LH 71.9%, and AP 42.8%.
Projected 3Q23 presales for 9 properties will shrink 14.5% from the previous year.
In this regard, CGS Research Department estimated pre-sale totals for 9 real estate companies, consisting of AP, LH, LPN, PSH, QH, SPALI, SIRI, ANAN and ORI, it is estimated that the 3Q23 pre-sale total for the group will be 58.8 thousand. Million baht fell 3.4% q-o-q and fell 14.5% y-o-y, lower than previously expected as AP, SPALI and SIRI had weaker pre-sales than expected, with pre-sales slowing as they were affected by the adjustments. , lower GDP growth, the end of maximum loan relief measures, and the launch of some projects later than scheduled.
As a result, pre-sales during the first nine months of this year are expected to reach 1,793 billion baht, down 3.4% year-on-year, with pre-sales of low-rise housing being the main drag, down 19.3% year-on-year, but unit sales Residential rose as much as 27.2% year over year, advance sales for the first nine months were 65.8% of 2023 expectations.
Pre-AP, LPN, PSH, SPALI, SIRI, ORI and ANAN sales are actual figures, while pre-LH and QH sales are estimates.
Neutral is recommended with AP – ORI – SIRI as the best choices.
We recommend neutral stocks in the real estate group. Because it is expected that pre-sales overall growth will decline to 2.9% this year, compared to 24% in 2022, and profits from normal operations will grow by only 2.5%, compared to 30.2% in 2022, but the earnings yield will be 7.3 -7.4% in the year 66-67. Helps reduce downside.
Entrepreneurs with a high proportion of medium to high-end residential projects believe it is a better choice, so we chose AP, ORI and SIRI as our top stock picks, and we expect strong earnings growth this year. 66-67 and benefit from the recovery in external demand.
AP target is 14.30 baht I like AP because the company has continued strong net profit growth after the coronavirus (COVID-19) outbreak. Valuation remains interesting, and we expect AP to generate income from real estate sales. Strong growth resulting from aggressive expansion plans and regular earnings per share should average 8.2% CAGR in 2022-2024.
ORI target 13.10 baht I like ORI because the company is likely to achieve normalized earnings per share of 22.6% in 2023 with an increasing share of revenue from low-rise residential and joint venture projects. Positive factors that will help raise the stock price are new joint venture contracts and unlocking the value of investments in subsidiaries through IPO shares on the stock exchange.
SIRI target is 2.25 baht SIRI is one of the top picks in the real estate group. Because we see that 1) the company’s real estate business is likely to improve in 2022-24 thanks to strong pre-sales, 2) the company has aggressive store expansion plans, 3) benefit from growing demand from international customers and 4) a lower share of loss than The Standard. . International (SI)