AP reports strong 3Q earnings result, sees growth in landed property

AP (Thailand) Plc reported quarterly revenues at 9.15 billion baht and net profit at 1.45 billion baht this week, driven by strong landed property transfer together with joint venture (JV) projects.

The company is one of the top residential developers in Thailand with a concentration mainly in Bangkok Metropolitan Area.

The newly released results prompted analysts at Kiatnakin Phatra Securities to raise AP’s earring per share (EPS) estimate in 2020 by 11 per cent due to strong gross margin of 30 per cent.

“AP remains one of our top picks for the sector on its continued strong momentum,” said Jiraporn Linmaneechote, Kiatnakin Phatra analyst.

However, Jiraporn still maintains AP’s price target at 8.80 baht per share while AP shares closed on Thursday trade at 6.65 baht per share, up 0.76 per cent, with a transaction value of 81.31 million baht.

Revenues from landed property accounted for 79 per cent of total housing revenue. The developer gained a record high income from property sales at 8.9 billion baht, up 59 per cent year-on-year and 17 per cent quarter-on-quarter.

From January to September this year, AP’s profits stood at 3.3 billion baht, up 54 per cent year-on-year. The profits already make up 82 per cent of the annual projection from Kiatnakin Phatra.

Landed-property as key factor       

AP sees landed property as a key growth driver and plans to grow its landed property portfolio by keeping an active launch plan next year.  The 10-months presales of landed housing increased 34 per cent year-on-year without the launch of condominiums.

“Our 2021 forecast assumes landed property revenue to be flat. If AP can grow landed property revenue by 10% as planned, we could see 5 per cent upside on our 2021E,” said Jiraporn.

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