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Published on April 17, 2008

Property developer LPN Development is planning to expand into low-rise residential projects though its subsidiary, Pornsanti. It hopes to gain from new government's tax stimulus package with this initiative, LPN's managing director Opas Sripayak said.

"If we launch condominium projects, getting the tax benefit would be tough because the package is valid only till March 30, 2009 and we will not be able to hand over the apartments in that time. Thus, to benefit from the tax package, we thought of developing low-rises, though they are not part of our market. However, we can get into it through our subsidiary, Pornsanti," he said.

The company's management team is considering whether the demand will support its expansion. Depending on that, the company's subsidiary may be able to launch new projects which go beyond the existing plan, Opas said. The present outlay comprises four projects worth Bt2 billion.

In the meanwhile, LPN will continue with its plans of launching eight condominium projects worth Bt12 billion this year. This is part of achieving its pre-sales target of Bt10 billion that will help the company post a revenue of Bt8 billion.

Opas said the company's pre-sales figure touched Bt2.5 billion in the first quarter of this year which is well within its target. 

Twenty-one out of 23 brokerages on settrade.com have put a "buy" on  LPN's stock with a target price between Bt8.3 per share and Bt10.59. They said the bullish outlook is driven by the hope the company will benefit from the tax incentive package.

However, Siam City Securities and Phillip Securities (Thailand), recommend selling the stock within the Bt7.55-to-Bt8.63 range. They believe that although LPN's revenue has potential for growth, its net profit growth will be lower due to a rise in cost of construction.

LPN's shares trade between Bt7.75 and Bt8.10 per share.

Somluck Srimalee

The Nation