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Published on August 1, 2007

Siam Makro will open four new stores this year, and the company will have no new expansion afterwards. Nonetheless, a on July 19 news report said Christiani and Nielsen had signed a contract to construct six new stores for Siam Makro.

The company's outlook should improve, because it will now be able to expand more than previously planned. Two of the six new stores are already factored into the brokerage's projection for this year, while the rest are not.

Therefore, the broker anticipates the rest will open and bolster the company's top and bottom lines next year.

Overall, the company will open eight new stores this year and next.

Given the improvement in Siam Makro's store-expansion plan, the broker has revised next year's forecast upwards.

The broker expects sales and earnings to increase 8.4 per cent and 9.4 per cent, respectively. It has maintained its assumption on gross margin at 6 per cent, earnings before interest and tax margin at 3.2 per cent and net margin at 2.2 per cent.

The company should enjoy a longer period of acceptable earnings growth this year and next before slowing in 2009 from an unfavourable expansion plan beyond next year.

The broker estimates that Siam Makro will pay a dividend this year of Bt4.99 a share and next year of Bt5.46 a share, lower than its previous dividend payments of Bt9 in 2005 and Bt5.50 last year.