Villa Kunalai Public Company Limited - KUN showcases Q2/2023 performance with total revenue reaching 224.41 million baht, an increase of 30.40% (QoQ) and net profit of 21 million baht, up 300% (QoQ). The company also reported pre-sales of 665 million baht in the first six months, accounting for approximately 35% of the annual target of 1.8 billion baht.

CEO Pavirat Tevaakson signaled that the second half of the year will see a recovery in the real estate sector, driven by demand for horizontal housing. The national transportation network master plan is expected to influence consumer behavior, shifting interest towards suburban homes. The company plans to adjust its strategy to develop the market for homes priced between 6-10 million baht, targeting new customer bases, alongside launching the campaign “Celebrating 16 Years, Giving Away 160,000 Baht” to commemorate the company's 16th anniversary in Q3/2023.

Ms. Pavirat Tevaakson, CEO of Villa Kunalai Public Company Limited (KUN), a developer of horizontal real estate projects in suburban areas, revealed that for Q2/2023, the company achieved total revenue of 224.41 million baht, up 30.40% (QoQ), and net profit of 21 million baht, up 300% (QoQ). In the first half of 2023, total revenue was 396.50 million baht, with a net profit of 26.3 million baht.

The improvement in Q2 performance was primarily due to increased revenue recognition and reduced product costs compared to Q1, attributed to cost management and adjustments in home selling prices. Additionally, revenue recognition from the Kunalai Navara Rama 2 project, which has seen continuous sales growth, contributed significantly. This project boasts a gross profit margin of 40%, exceeding the company’s average. Revenue was also recognized from existing projects such as Kunalai Begins 2, Kunalai Joy On 314, Kunalai Park, and Kunalai Daisy.

In the first half of 2023, the company recorded pre-sales of 665 million baht, approximately 35% of the 2023 target of 1.8 billion baht, representing about 85% of the monthly target across seven projects, including Kunalai Courtyard Phase 2, Kunalai Begins 2, Kunalai Joy On 314, Kunalai Park 5, Kunalai Daisy, Kunalai Navara Rama 2, and Kunalai Perra. This resulted in a backlog of 200 million baht at the end of June, which will be gradually recognized in the second half of 2023.

Regarding the progress of the Kunalai Navara Rangsit-Klong 2 and Kunalai Navara Rama 2 projects, the response has been very positive. As of the end of July, the Kunalai Navara Rama 2 project had pre-sales of 155 million baht, with increasing foot traffic to the project. The Kunalai Navara Rangsit-Klong 2 project had its soft opening in July, with pre-sales already recorded, and revenue recognition is expected in Q4/2023. Construction of the Kunalai Perra project was approximately 40% complete by the end of July, with pre-sales of about 57 million baht.

Additionally, the CEO of KUN assessed the overall landscape of the horizontal real estate industry in the second half of 2023, noting that demand for horizontal properties in suburban areas remains strong. This is due to the high prices of urban properties in central Bangkok and changing consumer behavior, with customers seeking homes with more space and spending more time at home due to shifts in work patterns. The development of an expanded electric train system, including the recently opened Yellow Line and the anticipated Pink Line set to launch in 2024, will facilitate easier commuting from suburban areas to the city. Furthermore, the government is drafting the M-MAP 2 plan to enhance the electric train system following the M-MAP plan, which will conclude in 2029, making the electric transport system more convenient and comprehensive.

It is also expected that consumer purchasing power will improve if the political situation stabilizes with the formation of a government, leading to clearer economic stimulus policies, particularly regarding domestic consumption. The tourism sector is projected to welcome 29.5 million international tourists to Thailand in 2023, a 164.6% year-on-year increase, generating 1.25 trillion baht in tourism revenue. These factors are expected to stimulate private consumption, which is forecasted to grow by 4.5%, indicating a recovering economy. The real estate sector is anticipated to be a key investment area to boost the economy due to its extensive business linkages that can drive comprehensive growth.

However, the rising interest rates are impacting home purchasing decisions, as higher rates make it more challenging to secure housing loans and increase monthly mortgage payments. An increase of 0.25% per year in interest rates can raise monthly payments by approximately 2% - 5%, affecting customers. Therefore, the company is developing new market segments for products priced between 6-10 million baht, differing from the previous range of 2-5 million baht, to reach new customer groups and achieve long-term revenue growth while maintaining a stable market share in Bang Bua Thong.

In Q3/2023, the company is launching the campaign “Celebrating 16 Years, Giving Away 160,000 Baht” to commemorate its 16th anniversary, offering special promotions for home purchases in Kunalai projects, including a cash giveaway of 160,000 baht. Additional promotions include waiving transfer fees, mortgage fees, and community service fees to stimulate sales for the second half of the year.