Performance 9M/60 “Real Estate Sector” TerraBKK Research begins with the top 10 real estate companies by revenue, which have averaged over 10 billion baht annually in the past 2-3 years. Notably, Land and Houses (LH) and Sansiri (SIRI) have already reached 30 billion baht. Meanwhile, Supalai (SPALI), Quality Houses (QH), and AP (Thailand) (AP) have annual revenues around 20 billion baht. Property Perfect (PF), L.P.N. Development (LPN), SC Asset (SC), Ananda Development (ANAN), and Panyathai Property (GOLD) are gradually exceeding 10 billion baht in revenue.



TerraBKK Research has identified 10 real estate companies with interesting performance due to their ability to consistently grow revenue year-on-year (2016 revenue exceeded 2015) and over 9 months (9M/60 revenue exceeded 9M/59). The standout company currently is Origin Property (ORI), whose 9M/60 revenue has already surpassed the total revenue for 2016 by over 815.25 million baht, thanks to revenue recognition from condominium projects carried over from 2016 and new projects starting to transfer ownership in March, June, and September 2017. Similarly, Richy Place 2002 (RICHY) has seen its 9M/60 revenue exceed the total revenue for 2016 by over 203.46 million baht from the transfer of revenue recognition from ongoing projects such as The Rich Sathorn-Taksin and Rich Park @ Taopoon.



Regarding net profit figures, TerraBKK Research notes that Land and Houses (LH) leads significantly with a latest 9M/60 figure of 8,507 million baht, nearly matching the total net profit for 2016 (8,617 million baht). In terms of overall performance, the top 10 real estate companies with the highest net profit include Supalai (SPALI), Sansiri (SIRI), Quality Houses (QH), AP (Thailand) (AP), L.P.N. Development (LPN), SC Asset (SC), Ananda Development (ANAN), Panyathai Property (GOLD), and Raimon Land (RML).



Continuous growth in net profit TerraBKK Research has identified 8 real estate companies with interesting performance both annually (2016 net profit exceeded 2015) and over 9 months (9M/60 net profit exceeded 9M/59). The standout company currently is Origin Property (ORI), whose 9M/60 net profit has already surpassed the total net profit for 2016 by over 329 million baht, along with Eastern Star Real Estate (ESTAR), which has also exceeded the total net profit for 2016 by over 156 million baht.


For the key financial ratios 9M/60, such as net profit margin, earnings per share, return on equity, return on assets, and debt to equity, TerraBKK Research has compiled the performance data for 9M/60 from over 30 real estate development companies. Details are as follows (excluding Pace Development (PACE) which has news and Pruksa Holding (PSH) which lacks Q3 2016 comparative data).

1. Earnings per Share (EPS)
Generally, TerraBKK Research found that this industry has earnings per share not exceeding 1 baht/share, with only 2 companies showing outstanding EPS above the average: Noble Development (NOBLE) at 4 baht per share and Supalai (SPALI) at 2.39 baht per share.

2. Net Profit Margin (NPM)
The average net profit margin for 9M/60 ranges from 1.32% to 12.45%. The top 3 companies with the highest net profit margins are Land and Houses (LH) at 25.74%, Origin Property (ORI) at 24.08%, and Noble Development (NOBLE) at 23.24%.

3. Return on Equity (ROE)
The average ROE for 9M/60 ranges from 1.06% to 13.27%. The top 3 companies with the highest ROE are Noble Development (NOBLE) at 59.6%, Origin Property (ORI) at 51.74%, and Land and Houses (LH) at 22.93%, reflecting their ability to manage operations effectively for shareholder returns.

4. Return on Assets (ROA)
The average ROA for 9M/60 ranges from 1.73% to 7.37%. The top 3 companies with the highest ROA are Origin Property (ORI) at 19.42%, Noble Development (NOBLE) at 16.72%, and Supalai (SPALI) at 13.8%, reflecting the companies' efficiency in utilizing assets for returns.


5. Debt to Equity (D/E)
The average D/E for 9M/60 ranges from 0.96 to 1.88 times. The top 3 companies with the highest debt to equity ratios are Major Development (MJD) at 4 times, Charn Issara Development (CI) at 3.89 times, and Areeya Property (A) at 3.01 times, indicating poor capital structure management and high financial risk.

TerraBKK Research concludes the performance 9M/60 of the real estate sector by stating that Land and Houses (LH) is performing strongly with revenue of 33 billion baht and a net profit margin of 25.74%, the highest in the sector. Following closely is Noble Development (NOBLE) with an EPS of 4 baht per share and an ROE of 59.6%, also the highest in the sector. The highest ROA belongs to Origin Property (ORI) at 19.42%. Meanwhile, Major Development (MJD) appears to have capital structure issues, as its debt to equity ratio (D/E) of 4 times is unusually high for the sector. ---TerraBKK

Article by: TerraBKK Investment Tips
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