Ref. No.: CO2555_0219 1 of 8 Sansiri - SIRI Recent bookings beat our expectations Bloomberg │ Reuters SIRI.TH │SIRI9 Thailand Equities Research 6 March 2012 Report type: Company Update Company Overview SIRI is one of the leading property developers in Thailand with project portfolios varying from single-detached houses, townhouses and condominiums. Accumulated bookings during 2M12 reported a strong growth as high as 104% q-q. Decent SDH/TH booking trend and huge backlogs on hands would help propel earnings in CY12-CY13. Latest P/E is above historical average but satisfactory dividend yield still warrants our ‘NEUTRAL rating on the shares. What is the news? 2MCY12 bookings were stronger than expected especially the condominium projects. SIRI’s 2 new condo projects, launched in 1QCY12, were sold out with booking value of Bt2.2bn. How do we view this? Strong bookings and huge backlogs would help sustain profit growth into CY14. Investment Actions? Share prices’ recent runs have caused P/E valuation to exceed historical average. However, still satisfactory dividend yield helps us maintain our ‘NEUTRAL’ rating on the shares. Sansiri Rating 3.00 Neutral - Previous Rating 3.00 Neutral Target Price (Bt) 2.00 - Previous Target Price (Bt) 1.56 Closing Price (Bt) 2.16 Expected Capital Gains (%) -7.4% Expected Dividend Yield (%) 6.4% Expected Total Return (%) -1.0% Raw Beta (Past 2yrs w eekly data) 0.76 Market Cap. (USD mn) 500 Enterprise Value (USD mn) 1,019 Market Cap. (Bt mn) 15,334 Enterprise Value (Bt mn) 31,717 3M Average Daily T/O (mn) 129.3 52 w eek range 1.02 - 2.2 Closing Price in 52 w eek range Major Shareholders (%) 1. T.S. STAR 18.1 2. Thai NVDR 16.8 3. CHASE NOMINEES LIMITED 42 7.4 CG Report - 2011 Key Financial Summary FYE 12/10 12/11 12/12F 12/13F Revenue (Btmn) 18,732 20,679 25,351 27,915 Net Profit (Btmn) 1,898 2,015 2,222 2,588 EPS (Bt) 0.32 0.29 0.28 0.29 Net Profit, adj. (Btmn) 1,975 2,002 2,322 2,588 EPS, adj. (Bt) 0.34 0.28 0.29 0.29 P/E (X),adj. 6.4 7.6 7.4 7.5 BVPS (Bt) 1.58 1.61 1.78 1.99 P/B (X) 1.4 1.3 1.2 1.1 DPS (Bt) 0.03 0.14 0.14 0.14 Div. Yield (%) 1.4 6.5 6.4 6.7 Source: Bloomberg, PSR est. *All multiples & yields based on current market price Valuation Method P/E'12 (7X) 0.00 1.00 2.00 3.00 4.00 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 5 85 165 245 325 405 485 565 645 Volume, mn SIRI TB EQUITY SETI rebased 0% 50% 100% Analyst Danai Tunyaphisitchai Analyst Reg#2375
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Company Overview SIRI is one of the leading property developers in Thailand with project portfolios varying from single-detached houses, townhouses and condominiums.
Accumulated bookings during 2M12 reported a strong growth as high as 104% q-q.
Decent SDH/TH booking trend and huge backlogs on hands would help propel earnings in CY12-CY13.
Latest P/E is above historical average but satisfactory dividend yield still warrants our ‘NEUTRAL rating on the shares.
What is the news? 2MCY12 bookings were stronger than expected especially the condominium projects. SIRI’s 2 new condo projects, launched in 1QCY12, were sold out with booking value of Bt2.2bn. How do we view this? Strong bookings and huge backlogs would help sustain profit growth into CY14. Investment Actions? Share prices’ recent runs have caused P/E valuation to exceed historical average. However, still satisfactory dividend yield helps us maintain our ‘NEUTRAL’ rating on the shares.
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Accumulated bookings during 2M12 rose sharply by 104% q-q Bookings during 2MCY12 amounted to Bt8.3bn, up sharply by 104% from Bt4.1bn in 4QCY11. SIRI plans to launch 8 new condo projects in 1QCY12. At the latest, 2 new projects were sold out (HQ Thong Lor and DCONDO Krathu. Aside from bookings on these two new projects, condo bookings were boosted by the marketing event at Siam Paragon under “Life Comes Home” theme. Condo bookings rose to Bt6.1bn from Bt2.5bn in 4QCY11. SDH/TH bookings, meanwhile, bounced to Bt2.2bn from Bt1.5bn for the whole fourth quarter of last year. As a result, SDH/TH bookings in 1QCY12 would end up at Bt3.0bn, which is higher than our previous estimates of Bt2bn. As we expect SDH/TH market to regain normal pace during 2QCY12-4QCY12, SDH/TH bookings for the whole year would stand y-y to Bt13.2bn. Good bookings have resulted in huge backlogs on hands to be realized in CY12-CY14 amounting to Bt18.4bn, Bt12.9bn and Bt2.9bn, respectively. Decent SDH/TH booking trend and huge backlogs on hands would propel earnings in CY12-CY13 We project sales realized this year of Bt24.3bn from Bt19.7bn in CY11, of which backlogs on hands have already secured Bt18.4bn in revenue. The remaining would come from realization of Bt6bn from SDH/TH bookings for the rest of this year. Revenue risk for CY12 should be minimal given secured portion from backlogs. Profit growth would stand at 10% while EPS growth would edge up only 3% as one-third of SIRI-W1 are assumed to be exercised in each year for the next 3 years. Meanwhile, backlogs to CY13 would be at Bt12.9bn. The slight growth in SDH/TH bookings (Bt13bn) would suffice to generate sales realized growth of 10%. With lower income tax rate from the government’s stimulus package, we expect CY13 net profit would increase by 16%. SDH/TH booking momentum ahead would be the vital driver to our earnings forecasts in CY13. Only dividend yield keeps us to maintain a ‘NEUTRAL’ Share prices’ recent runs have caused P/E valuation to stand at 7x, slightly higher than its historical average. However, still satisfactory dividend yield helps us maintain our ‘NEUTRAL’ rating on the shares. Our price target is at Bt2.00 based on a 7x CY12 prospective P/E.
Sansiri - SIRI Thailand Equities Research 6 March 2012
Cashflow from ops 1,577 -3,384 -3,852 -2,488 3,031CFI 0 0 0 0 0CAPEX, net -162 -535 -551 -400 -400Dividends from associates & JVs 0 -7 0 0 0Dividends/Interest from Investments -1 353 95 -300 -300Purchase/sale of investments -20 -102 33 0 0Investments in subs & associates -35 0 0 0 0Others -140 127 -5 -0 -0
Cashflow from investments -358 -164 -428 -700 -700CFF 0 0 0 0 0Share issuance 0 90 102 0 0Purchase of treasury shares 0 0 0 0 0Loans, net of repayments 648 4,998 3,870 3,250 -2,600Dividends to minority interests 0 0 0 0 0Dividends to shareholders & capital reduction -442 -766 -178 -1,056 -1,111Others 0 -849 0 0 0
Cashflow from financing 206 3,473 3,794 2,194 -3,711Net change in cash 1,425 -75 -486 -995 -1,380Effects of exchange rates 0 -9 7 0 0CCE, end 3,402 3,331 2,863 1,869 488Source: PSR est.
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Total Returns Recommendation Rating> +20% Buy 1+5% to +20% Accumulate/Trading Buy 2-5% to +5% Neutral 3-5% to -20% Reduce/Trading Sell 4>-20% Sell 5
We do not base our recommendations entirely on the above quantitative return bands. We
consider qualitative factors like (but not limited to) a stock's risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation
Ratings History
Phillip Group Rating System
Remarks
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Source: Bloomberg, PSR
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Dec-09
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Research Department Fundamental: Name Analyst Reg No. Tel Email Sector Sasikorn Charoensuwan 9744 66 2 635 1700#480 [email protected] Banking Finance and Securities Rutsada Tweesaengsakulthai 17972 66 2 635 1700#482 [email protected] ICT Energy Health Care Services Danai Tunyaphisitchai 2375 66 2 635 1700#481 [email protected] Construction Materials Property Development Naree Apisawaittakan 17971 66 2 635 1700#484 [email protected] Agro & food Industry Electronics Siam Tiyanont 17970 66 2 635 1700#483 [email protected] Transportation Media and Publishing Preeyanun Tripetchchuporn 17973 66 2 635 1700#488 [email protected] Petrochemicals and Chemicals Commerce Tourism Ornmongkol Tantitanatorn 34100 66 2 635 1700#491 [email protected] Finance and Securities Automotive Construction Materials Strategy: Name Analyst Reg No. Tel Email Teerada Charnyingyong 9501 66 2 635 1700#487 [email protected] Pinkaew Santimetvirul 37928 66 2 635 1700#491 [email protected] Waraporn Trakonthanasoontorn 66 2 635 1700#495 [email protected] Technical: Name Analyst Reg No. Tel Email Sasima Hattakitnikorn 8328 66 2 635 1700#490 [email protected] Kanoksak Vutipan 2423 66 2 635 1700#485 [email protected] Database & Production: Name Tel Email Manunpat Yuenyongwatanakorn 66 2 635 1700#492 [email protected] Sutiporn Oupkaew 66 2 635 1700#489 [email protected] Translation: Name Tel Email Chaiyot Ingkasorarat 66 2 635 1700#493 [email protected]
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Bangkok Offices Head Office Srinakarindr Branch Viphavadi Branch
11st Fl., Unit 1102, 14th Fl., Unit 1404 17th Fl., Modernform Tower, 15th Fl., Lao Peng Nguan Tower 1,
3rd Fl., Arokaya Bldg., 3rd Fl., Unit 3D, Redar Group Bldg., 25/45 Krom Luang Chumporn Rd., 52 Rop Bueng Rd., Nai Muang, 607 Petkaseam Rd., Had Yai, Tatapao, Muang, Chumporn 86000 Muang , Khon Kaen 40000 Had Yai, Songkla 90110 Tel : 0 7757 0652-3 Tel : 0 4322 6026 Tel : 0 7422 3044 Fax : 0 7757 0441 Fax : 0 4322 6796 Fax : 0 7422 3620 Suratthani Branch Laemchabang Branch 62/9 Donnok Rd., Talad, 83/112, 114 Moo 9, Tungsukla Muang Suratthani, Suratthani 84000 Sriracha, Chonburi 20110 Tel : 077 206 131 Tel : 0 3849 0669 Fax : 077 206 151 Fax : 0 3849 3125
Results Presentation
Score Range Number of Logo
Less than 50 No logo given
50 - 59
60 - 69
70 - 79
80 - 89
90 - 100
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative disclosured to the public and able to be accessed by a general public investor. The results, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Gavernance Report of Thai Listed Companies. As a result, the survey result may be changed after that data. Phillip Securities (Thailand) of securities company does not confirm nor certify the accuracy of such survey result.
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Overseas Offices Singapore Office: Phillip Securities Pte Ltd Phillip Futures Pte Ltd 250 North Bridge Road, 250 North Bridge Road, #06-00 Raffles City Tower. #07-01 Raffles City Tower. Singapore 179 101 Singapore 179 101 Company Reg. No. 197501035Z Company Reg. No. 198305695G Tel : (65) 65336001 (General) Tel : (65) 65351155 (General) Fax : (65) 65353834 Fax : (65) 65330593 Hong Kong Office: Phillip Securities (HK) Ltd Phillip Commodities (HK) Ltd 11/F United Centre 95 11/F United Centre 95 Queensway Hong Kong Queensway Hong Kong Tel : (852) 22776600 Tel : (852) 22776600 Fax : (852) 28685307 Fax : (852) 28685307 Japan Office: Phillip Futures K.K. The Naruse Securities Co. Ltd. Tosho Bldg., 4-2 Nihonbashi Kabutocho, 6F, 3-8-3 Nihonbashi Hon-cho, Chuo-Ku Tokyo 103-0026 Chuo-ku, Tokyo 103-0023 Japan Tel : (81-3) 5651-2111 Tel : (81-3) 36662101 Fax : (81-3) 3662-5700 Fax : (81-3) 36678806 United Kingdom Office: Indonesia Office: King & Shaxson Ltd. Walker, Crips, Weddle, Beck PLC PT Phillip Securities Indonesia 6th Floor Candlewick House Sophia House, Wisma Standard Chartered Bank, 120 Cannon Street, London 76/80 City Road, Level 23B, Jl. Jend. Sudirman Kav. EC4N 6AS London EC1Y 2EQ 33A Jakarta 10220 Indonesia Tel : (44-20) 7929 5300 Tel : (44-20) 72537502 Tel : (62-21) 57900800 Fax : (44-20) 7283 6385 Fax : (44-20) 72537500 Fax : (62-21) 57900809 Australia Office: Sri Lanka Office: Head Office - Melbourne Sydney Office Asha Phillip Securities Ltd. Intersuisse Ltd Intersuisse Ltd Level 4, MiIlennium House Level 37, 530 Collins Street, Level 7, 5 Elizabeth Street, Sydney, No.46/58, Navam Mawatha, Melbourne, Victory 3000, NSW 2000, Columbo 02, Sri Lanka Australia Australia Tel : (94-1) 12314875 Tel : (613) 96298288 Tel : (612) 92332100 Fax : (94-1) 12314883 Fax : (613) 96298882 Fax : (612) 92332117
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PHILLIP RESEARCH STOCK SELECTION SYSTEMS
BUY >15% upside from the current price
HOLD Trade within ± 15% from the current price
SELL >15% downside from the current price
We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors
like (but not limited to) a stock's risk reward profile, market sentiment, recent rate of share price appreciation, presence or
absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final
recommendation
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