Securities company Kiatnakin Phatra Public Company Limited or KKPS specified in the analysis Evaluate aboutThai Real Estate Group that the demand for housing in Thailand will follow the economic growth cycle. This makes this year’s growth full of challenges in the market. There is intense competition for the market among the five real estate industry leaders.
The market share of the five newly opened projects has increased from 40% in 2019 to 48% in 2023, and if the top 10 leaders in the real estate sector are included, the market share of new projects will be at Increased from 60% to 62%
However, KKPS views that the overall value of the top 10 newly opened projects this year will be relatively stable compared to previous years. while the total amount of rights transfer will increase by 5%.
There is also the risk of refinancing in the real estate group. The value of bonds including the top 10 is at 68 billion baht that will rollover this year, accounting for 34% of all bonds in the real estate sector. KKPS views AP and SPALI as having the least risk of refinancing.
It is seen that profits in 2024 will be quite low due to a lot of promotions. Especially selling condos This will put pressure on margins. The analysis department is concerned about LH and QH from condos that are still outstanding and will be downside risks to the company’s margins.
At the same time, if the BoT cuts interest rates in the second half of this year It is seen that this will be a very positive factor for the real estate group. Mid-tier companies will benefit the most. This is because it is very sensitive to credit rates. Analysts believe that every 1% decrease in loan rates will increase buyers’ ability to purchase property by 7-8%.
KKPS downgraded its recommendation on LH from “buy” to “sell”, reflecting the recent market loss to competitors. The sales rate decreased by 30% compared to the pre-COVID period, including downside risks to margins. There is also concern about condos that are not yet completely sold. and may lead to promotions that put pressure on sales Therefore, the target price was reduced from 9.2 baht to 7.4 baht.
QH is in the same direction. is the loss of market share and condos that have not been sold for a long time, with KKPS maintaining a “sell” recommendation and lowering the target price from 2.40 to 2.20
However, KKPS recommends buying SPALI, believing that the stock price has already reflected the problems in 2023 and that SPALI has strengths in other provinces. In addition, land/real estate is available for rent in Bangkok. and the surrounding area can still grow.
In addition, the value of the shares is still low at 5.7 times and still has a good dividend rate of 7.5% with a target price of 25 baht (reduced from the original 25.8 baht due to a new method of calculating the target price).
AP lowered its recommendation from “Buy” to “Hold” to reflect growth returning to normal this year. However, AP’s operations show success in the land/rental property business. Because there are locations that spread risk It also has an attractive dividend yield of 5.7% (expected dividend to be 0.65 baht XD in May 2024)
However, KKPS reduced the target price from 16 baht to 12.20 baht, considering that profit growth may decrease from the original forecast to 4% this year and 3% next year, and there is also a PER in 2024 that will drop to 6 times from the original 7.5 times
2024-01-20 05:12:21
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