The impact of the COVID-19 pandemic has affected consumer purchasing power, causing potential homebuyers to continuously delay their decisions to purchase real estate, resulting in a noticeable slowdown in the real estate market in Q1/2020.

              Therefore, TerraBKK summarizes the performance of real estate companies listed on the stock exchange for Q1/2020 based on data from the stock exchange and announcements from each company as follows:

Total Revenue

              In Q1/2020, it is evident that the revenues of various companies have significantly decreased compared to the same quarter last year. Only a few companies have experienced revenue growth, notably Major Development, which saw a 37% increase in revenue due to higher sales. SC Asset followed with a 3.5% revenue growth from recognizing income and transferring completed condos in Q4/2019 (such as 28 Chidlom, Centric Ratchayothin) continuously. Ananda Development also saw a 2% increase in revenue from recognizing income from backlog and focusing on selling ready-to-move-in projects.

Net Profit

              In Q1/2020, the overall real estate market's net profit decreased by an average of 46% compared to Q1/2019. The top three companies with the highest net profit are:

              1.) Land and Houses reported a net profit of 1,339 million baht due to the financial statement improvement of LHFG (LH Financial Group Public Company Limited, a joint venture) from a previous loss of 709 million baht to a net profit of 829 million baht. Additionally, this quarter saw the launch of three new horizontal projects, one of which is the Indy Bangna-Ramkhamhaeng 2 project, achieving a take-up rate of over 60%. However, net profit decreased by 26% compared to Q1/2019 due to a decline in revenue from property transfers (especially single houses).

              2.) Pruksa reported a net profit of 922 million baht, in line with market expectations, due to expanded gross margins and a reduction in selling and administrative expenses. However, compared to the same period last year, net profit decreased by 26% due to lower property transfers across all categories (especially condos).

              3.) Supalai reported a net profit of 761 million baht, with most revenue coming from recognizing income from backlog of 3,831 million baht, keeping the cost of sales low. However, compared to Q1/2019, net profit decreased by 50% due to reduced demand for high-rise projects in the market, while Supalai has a higher supply of high-rise projects than horizontal ones, negatively impacting condo supply sales.

              In this situation, it is evident that operators are facing reduced net profits compared to the same period last year. Only two companies reported increased net profits: Sena Development, which grew by 45% from transferring the Niche Mono Sukhumvit Bearing project that has been ongoing since late 2019, along with a backlog of joint venture projects being continuously transferred, and Major Development, which saw a 31% increase in net profit due to revenue growth.

              Conversely, the company with the most significant decrease in net profit is Sansiri, with a net profit of 62 million baht, down 85% compared to Q1 of the previous year. This was due to increased cost of sales, operating expenses, and administrative expenses from promotional activities to stimulate sales and transfer ownership of completed projects to clear remaining stock, along with losses from hotel management affected by COVID-19.

Net Profit Margin

              Looking at the Net Profit Margin (NPM), which indicates the profitability of each company, it is found that Sena Development has an NPM of 24.4 times, which has grown by 85% from Q1/2019, demonstrating strong profitability with continuous income recognition from backlog and effective control of selling and administrative expenses. Following is Origin with an NPM of 24.7 times, growing by 18% from the same quarter last year, due to recognizing profit shares from recently completed joint venture projects, namely Knightsbridge Prime Ratchayothin and KnightsBridge College - Ramkhamhaeng.

Performance and Target (MB)

              The graph compares the revenue-generating capabilities against set targets, showing how much each company has earned so far and how much more they need to achieve their targets in this first quarter. The company that has achieved the highest percentage of its target is Land and Houses at 25%, followed by Lalin Property at 24%, Sansiri at 20%, SC Asset at 19%, LPN at 18.2%, Pruksa at 18%, Supalai at 16%, Origin at 15%, AP at 13%, Sena at 8.8%, and finally Ananda at 8.1%. Companies that achieve a high percentage of their targets will find it easier in subsequent quarters to generate revenue to meet their goals.

              The performance from this first quarter is just the beginning of the impact from the COVID-19 pandemic. However, we must wait to see the second quarter, which is expected to be heavily affected. TerraBKK hopes that the situation will return to normal soon and that there will be measures from both the government and private sectors to help revive the real estate business to its former glory.

Source: www.set.or.th

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