The Year 2014 is near to end, but it has been more than an average year for the property market. Leaving behind the impact of Martial law, the 3Q14 was good for both presales and profit. Presales for the top seven developers were increased about 8% QoQ. On the profit side, total profit for the top seven rose 49% YoY and 23% QoQ. Accuracy of the completion of condos was the major factor which brought higher deed transfers.
The last quarter of the year 4Q14 is showing mature profit and going to be the best for most. Because revenue and net profit are expected to be the year's best for LH, LPN, SIRI and SPALI. Profit for AP, PS and QH peaked in 3Q14.
The year 2015 will be bring higher expectations as it has been anticipated 17% earnings growth backed by huge backlog of Bt190.7bn. Of this, it is also estimated that tBt87.2bn, mostly from condos launched in 2012-2013, would be booked as revenue, securing 44% of 2015F. Backlog quality is also good as seen in a higher ratio of deposits received/backlog of 7.8% in 3Q14 from 7.5% in 2Q14. Cancelation risk is low, as selling price of new condos is 10-15% higher than for those launched some years ago (transfers expected next year), driven by higher land and development costs. Margin does not appear at risk, since higher construction costs after the flooding and the increase in minimum wage in April 2012 are already factored into the selling prices.
Accordingly, SCB securities, they expect a 10-15% rise in new launches and presales in greater Bangkok, with continued demand from Thais as well as expatriates as the government pushes its plan to encourage multinationals to choose Thailand as their regional headquarters.
Source: SCB securities