Target price : Bt3.40
Recommendation : BUY
Closing Price (26 March 09) : Bt2.66
Yields high and P/E still low despite concerns about 2010 profits
- The current backlog would mitigate the risk to revenues this year. The revenue outlook for 2010 depends on sales of new development projects to be launched this year. The current poor market conditions leave 2010
growth at risk.
- Despite the uncertainty about growth prospects for 2010, we see limited risk to 2009 revenue forecast cushioned by backlog. On this basis, dividend yields would remain high in excess of 10%.
- Though there are potential risks to growth in 2010, P/E and dividend yields however remain at attractive levels. We reiterate a BUY stance on LPN with a price target of Bt3.40/share.
Backlog reduces revenue risk this year; revenue outlook for 2010 depends on sales of new development projects to be launched this year; current poor market conditions leave 2010 growth at risk
Condo developer LPN has a current backlog of roughly Bt9b, of which Bt6.6b and Bt2.4b would be realized as revenues this year and next respectively. Year-to-date sales came in at Bt1.5b, down from Bt2.9b in 1Q08 but up from Bt1b in 4Q08, as LPN launched only one new development project worth Bt700m in 1Q09, compared to the launch of one new project worth Bt300m and three new projects worth Bt3.6b in 4Q08 and 1Q08 respectively. Our 2009 revenue forecast of Bt7b is now 94% secured by estimated revenue of Bt6.6b to be realized from the backlog this year. To meet revenue target, the balance of Bt400m would come from sales of the ongoing projects to be realized as revenues this year. Condo units to be transferred this year are expected to account for 57-77% of sales. Sales are not too bad, in our opinion. On this basis, the remaining sales of Bt400m to meet our revenue target are likely to be achieved. As it stands, we expect 2009 revenue to be flat from a year earlier.
There is a backlog of only Bt2.4b to be carried into 2010. To meet our 2010 revenue target, the rest should come from sales of the new development projects to be launched in 2Q09-4Q09 and sales of the ongoing projects with transfer scheduled in 2010, including the Bt2.6b Lumpini Place Rama IX Phase I with a take-up rate of 71%, the Bt300m Lumpini Ville Bang Kae with a take-up rate of 70%, and the Bt800m Lumpini Place Ram Intra-Laksi with a take-up rate of 40%. The planned launch of six new development projects worth Bt10b will be in new locations and nearby the existing projects with sales performing well. We estimate LPN's 2009 presales at only Bt4.8b, of which Bt300m and Bt4.5b would be realized as revenues this year and next respectively. The presales figure nearly halves from a year-ago level of Bt9b. We expect 2010 revenue to be flat from 2009. In view of the poor market conditions this year, there remains a risk with uncertainty about revenue growth prospects for 2010.
Despite uncertainty about growth prospects for 2010, backlog would limit risk to 2009 revenue forecast: On this basis, dividend yields would remain high in excess of 10%
As backlog would limit risk to our 2009 revenue forecast, we expect 2009 revenue to be flat from 2008 at Bt7b. Margins are projected at 29% this year, down from a year-ago level of 31% as a result of higher marketing expenses necessary to drum up sales. We estimate 2009 profit to be about Bt992m, or Bt0.67 a share, down 17% from a year earlier. We expect 2010 revenue to come in at Bt7b, flat from 2009. We also forecast a slight margin drop in 2010 as a result of the company's policy to boost revenues. We estimate 2010 profit to fall by 4%. Despite dimming hopes for profit growth, 2H08 dividend of Bt0.27/share and 2009 dividend forecast of Bt0.34/share reflects attractive yields of roughly 10-12% for 2H08 and 2009 respectively, based on the latest closing price.
Valuation & Recommendation
Though there are potential risks to growth in 2010, 2009-10 P/E multiples of 3-4x are however very low, compared to the average historical troughs of 5x and dividend yields also remain at attractive levels. We therefore reiterate a BUY stance on LPN with a price target of Bt3.40/share based on 2009 P/E of 5x.
By Phillip Securities (Thailand) Plc. on Mar 27, 2009
Top USA Cities
Chula Vista California ,Oklahoma City Oklahoma ,Lincoln Nebraska,Hialeah Florida,Columbus Ohio,Bakersfield California,Stockton California,Glendale Arizona,Oyster Bay New York,Indianapolis Indiana,Islip New York ,Corpus Christi Texas ,Tampa Florida,Long Beach California ,St. Louis Missouri ,Fort Worth Texas ,Riverside California,Newark New Jersey ,Jersey City New Jersey,Lexington-Fayette Kentucky,Buffalo New York ,Mesa Arizona,San Diego ,Austin Texas,Houston Texas ,Albuquerque New Mexico ,Birmingham Alabama,Las Vegas Nevada ,Santa Ana California ,Madison Wisconsin,Greensboro North Carolina ,Honolulu Hawaii,Henderson Nevada,Cleveland Ohio,Tucson Arizona,San Antonio Texas,Babylon New York ,Cincinnati Ohio,Aurora Colorado,Colorado Springs Colorado ,Oakland California,Memphis Tennessee,El Paso Texas ,Reno Nevada,Milwaukee Wisconsin,Orlando Florida,San Jose California ,Laredo Texas,Los Angeles California,Virginia Beach Virginia ,Rochester New York ,Philadelphia Pennsylvania ,Baltimore Maryland,Brookhaven New York ,Sacramento California,Wichita Kansas ,Durham North Carolina ,Pittsburgh Pennsylvania,Chandler Arizona,Phoenix Arizona ,Jacksonville Florida,Akron Ohio,Washington District of Columbia,Omaha Nebraska,Anchorage Alaska,New Orleans Louisiana ,Fort Wayne Indiana ,Hempstead New York ,Fresno California,Miami Florida,Toledo Ohio,Anaheim California,San Francisco California ,Boston Massachusetts,St. Petersburg Florida ,Detroit Michigan,Portland Oregon ,North Hempstead New York,Charlotte North Carolina ,Plano Texas,Baton Rouge Louisiana ,St. Paul Minnesota ,Norfolk Virginia,Arlington Texas ,Chesapeake Virginia,Lubbock Texas,Dallas Texas ,Denver Colorado,Chicago Illinois ,Seattle Washington,Kansas City Missouri ,Nashville-Davidson Tennessee,Minneapolis Minnesota,Scottsdale Arizona,Modesto California,Tulsa Oklahoma,New York New york,Garland Texas,Raleigh North Carolina ,Atlanta Georgia
ไม่มีความคิดเห็น:
แสดงความคิดเห็น