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Published on April 8, 2008

Managing director Virapan Pulges said recently that the targeted revenue would come from factory rentals of Bt700 million, sales of properties to the Ticon Property Fund (TFUND) of Bt2.2 billion to Bt2.3 billion, dividends of Bt100 million from TFUND, and the rest from Ticon Logistics Park.

Ticon this year plans to invest Bt2 billion to create new ready-built factories totalling 130,000 square metres. As a result, the overall area for rental factories will increase to 800,000 square metres, he said.

Virapan added that the company would raise rental fees by 10 per cent for the new factories in order to offset an increase in costs for construction materials such as cement and steel.

The occupancy rate of its rental factories is currently 82 per cent.

This year Ticon will sell about 100,000 square metres of ready-built factories worth Bt2.2 billion to Bt2.3 billion to TFUND. The fund at the moment has assets worth Bt6 billion, and that will increase to Bt8.2billion-Bt8.3 billion this year, Virapan said.

He added that the recent removal of the 30-per-cent capital-control measure had had a psychological impact on overseas investors, persuading them to return to the Kingdom.

BT Securities estimates in its research that Ticon's revenue will rise by 14 per cent to Bt3.64 billion this year, of which Bt2.26 billion will come from property sales to TFUND - 10 per cent more than last year - and Bt899 million from factory rentals.

The broker expects Ticon's gross profit margin this year will be 54.41 per cent, a slight increase from the 2007 level. BT Securities also forecasts that Ticon will earn a net profit of Bt1.1 billion - a 4-per-cent rise from last year.

BT Securities said the key driver for Ticon this year was Japanese investors' confidence to put money into the automobile industry, and this will boost business expansion in this segment. Besides, the Board of Investment will promote the Thailand Investment Year campaign during 2009 to 2010, focusing on the automotive and electronics industries.

UOB Kay Hian Securities (Thailand) said in its research that the revocation of the 30-per-cent measure would make it easier for Ticon to sell properties to TFUND, as foreign investors will have no limit on how much they can put into property funds.

At present, Ticon's main revenue is contributed from the sale of properties to TFUND. Last year, that revenue accounted for 58.5 per cent of its total income.

Phatra Securities said Ticon's operational profit this year should be about Bt1 billion, an increase of 3 per cent. This is a downward revision from a previous estimate at Bt1.13 billion, due to lower margin from a change in the mix of assets sold to TFUND and in non-cash items such as equity income.

The broker expects Ticon can lease an additional 150,000 square metres, which will increase its overall rental factories to 830,000 square metres, including those in TFUND.

Phatra added that the key to Ticon's success was its dynamic business strategy, such as the launch of TFUND in 2005 and the recent construction of a logistics warehouse. Its logistics park at Wang Noi will be a key growth factor, due to its location as the gateway to the northern region.

Nalin Viboonchart

The Nation