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KC Property
Kim Eng Securities (Thailand) has changed its recommendation for KC Property from "fully valued" to "accumulate", with a fair value estimate of Bt1.24 per share.
As with other residential developers who build only low-rise projects, KC Property reported weak results for last year. Net profit fell 32 per cent to Bt123 million as weaker market sentiment hurt sales. Fourth-quarter earnings dropped 37 per cent year on year to Bt24 million, but rose 17 per cent quarter-on-quarter. Revenue fell 20 per cent year on year to Bt212 million but was flat quarter on quarter, while gross margins improved slightly from the third quarter. KC Property generated pre-sales of Bt400 million in the fourth quarter, raising the full-year pre-sales figure to Bt1.6 billion (before deducting cancelled orders). Pre-sales after deducting some cancelled orders stood at Bt1.15 billion, 25 per cent below 2005's figure. Given concerns over slower economic growth and higher competition, KC Property has targeted pre-sales of about Bt1.6 billion for 2007. It plans to launch two condominium projects this year worth Bt400 million each. It will need about Bt500 million to fund these projects, and will likely have to increase capital.
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