Pruksa announces its business plan for 2020, highlighting 5 short-term and long-term strategies amidst challenging market conditions, preparing to launch 30 new projects worth 36 billion baht, targeting sales of 38 billion baht and revenue of 40 billion baht, while also developing a new business selling precast slabs to supplement income with a sales target of 500 million baht within 3 years.

       Ms. Supattra Paepiemsub, CEO of Pruksa Real Estate Public Company Limited revealed that in 2019, the company launched a total of 36 projects worth 41.17 billion baht, achieving sales of 35.601 billion baht, a decrease of 30% compared to the same period last year. Revenue was 39.885 billion baht, down 11.4% compared to the same period last year. Sales in the townhouse and single-detached house segments dropped by 34%, while condominiums fell by 42%. This decline was attributed to negative factors in the economy and LTV measures that contracted the market. The company has postponed some projects to this year. Although it has not yet reached the set targets, the overall performance is still considered satisfactory.

        In the first quarter of 2020, the real estate market is still seen as challenging due to the economic slowdown and the COVID-19 outbreak, which has significantly reduced purchasing power from Chinese customers. However, it is expected that in the second half of the year, the overall real estate market will improve, particularly from Chinese buyers looking to purchase condominiums in Thailand as a future second home.

        For 2020, the company plans to launch 30 new projects worth 36 billion baht, including 18 townhouse projects, 6 single-detached house projects, 4 value condominium projects, and 2 premium condominium projects in locations with potential and genuine demand. Sales will be launched at the right timing, targeting sales of 38 billion baht and total revenue of 40 billion baht, close to last year's performance, using 5 main strategies.

 

 

        Currently, the company has a backlog worth 29 billion baht, which is expected to recognize revenue of 10.9 billion baht in 2020, with the remainder to be recognized over the next 2-3 years. To ensure sustainable growth, the company will accelerate its precast slab business to generate recurring income, targeting 500 million baht in revenue within 3 years. Currently, negotiations are ongoing with 4-5 clients, and deliveries are expected to start from June 2020 onwards.

        For shareholders, the company has resolved to pay an annual dividend for 2019 at the rate of 1.55 baht per share, having already paid an interim dividend of 0.60 baht per share on September 6, 2019. Therefore, the remaining dividend to be paid in this round will be 0.95 baht per share, which will be proposed for approval at the annual general meeting on April 29, 2020, with payment scheduled for May 22, 2020.

 

 

 

 

 

The 5 main strategies of Pruksa to maintain its leadership in the real estate market are:

  • Strengthen Core Business Maintain the core business base of Pruksa by designing products, functions, and IoT to support the lifestyles of customers in each segment, while also expanding into higher segments. Pruksa has been very successful in launching luxury single-detached house projects, achieving a take-up rate of over 50%. This year, there are plans to launch 2 more "The Palm" projects in potential locations to target higher purchasing power groups, as well as expanding townhouses into the 3-5 million baht segment under the Pruksa Ville and The Connect brands, while using the Patio brand to penetrate the luxury townhouse market.
  • Innovation and Data Tech Increase sales channels in new formats to meet customer needs in all dimensions and develop data science for customer database analysis, providing solutions that address these needs, including enhancing the capabilities of digital marketing for greater efficiency.
  • Asset Management Focus on selling inventory projects, especially condominium projects, and selectively launching new projects only in locations with potential at the right time according to market conditions. Control construction and materials to maximize efficiency, including strategies for land acquisition.
  • Recurring Income Generate continuous income by producing precast concrete slabs for external sales. Pruksa has one of the highest production capacities and the most modern machinery in the world, which will help generate ongoing revenue for the company starting this year. Meanwhile, the Vimutt Hospital project is on track and is expected to open in May 2021.
  • Bottom Line Efficient cost management to increase profits from upstream to downstream. Optimize home designs to suit the lifestyles of customers in each segment, while increasing the use of digital marketing to maximize efficiency.

Thank you for the information: Pruksa Real Estate Public Company Limited