th morning matters 20130529€¦ · italthai group's target for this year is to achieve...

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29-May-2013

Morning Matters

WHAT’S INSIDE

On The Platter

Bangkokland (BLAND TB; FV THB2.56 – Buy) Company Upd ate: Trading Below Current Book Value Bangkokland (BLAND)’s book value (BV) rose to THB2.27/share partly on the revaluation of Impact Exhibition Center. Had the landbank be appraised, its BV will increase by another THB0.9/share. The stock’s near-term catalysts include monetizing Impact into a REIT, the Government’s new pink-line BTS route running close to or into its landbank, and new development projects in its Makasan landbank located near the main airport link station.

MEDIA HIGHLIGHTS

♦ Weak GDP may bring rate cut

♦ NBTC says spectra may be returned

♦ Digital media advertising rises by 52%

♦ Italthai focuses on 4 core lines, AEC

♦ ThaiBev's rating downgraded on higher debt level ECONOMIC HIGHLIGHTS

♦ Thailand: Weak GDP may bring rate cut

♦ Thailand: April power crunch hits production

♦ South Korea: April current-account surplus falls

♦ EU: French consumer confidence slumps, matching 2008 record low

♦ EU: Rajoy awaits reprieve as Spanish recession signs mount

♦ US: Home prices rise by most since 2006 in March

♦ US: Confidence at five-year high

SET Intra -Day Graph

Source: Bloomberg

Key Market Indices (28 May 2013)

Value Chg % Chg % YTD SET 1619.57 26.47 1.7% 16.4%

SET50 1072.57 19.07 1.8% 13.5%

SET100 2393.77 42.06 1.8% 15.2%

Dow Jones 15409.39 106.29 0.7% 17.6%

S&P500 1660.06 10.46 0.6% 16.4%

Nasdaq 3488.89 29.74 0.9% 15.5%

FTSE 6762.01 107.67 1.6% 14.7%

FSSTI 3406.08 14.78 0.4% 7.5%

Hang Seng 22924.25 238.20 1.0% 1.2%

Nikkei 14449.63 290.54 2.1% 39.3%

KLCI 1776.16 9.03 0.5% 5.2%

SHANGHAI SE 2321.32 28.24 1.2% 2.3%

JCI 5176.23 91.10 1.8% 19.9%

SET 5-yr avg 2012 2013F

PE (x) 14.6 18.5 14.9

P/BV(x) 1.9 2.5 2.5

Yield(%) 4.0 2.7 3.1

Key Statistics

SET Value by investor Type: Daily Buy (THBm) Sell (THBm) Net (THBm) Institution 5,554.63 3,575.65 1,978.98 Proprietary 8,099.92 6,783.01 1,316.91 Foreign 7,647.29 10,392.24 -2,744.95 Retail 29,948.88 30,499.82 -550.94 SET Value by investor Type MTD (THBm) YTD (THBm) Institution -1,035.60 37,213.25 Proprietary 1,222.01 -251.92 Foreign 2,882.04 -13,062.86 Retail -3,068.45 -23,898.46 SET50 Index Future Long Short Net MTD YTD Institution 7,929 8,380 -451 -1,088 5,052 Foreign 2,567 2,720 -153 -5,049 -12,205

Local 14,232 13,628 604 6,137 7,153

See import ant disclo sures at the end of this report 2

Media Highlights

Weak GDP may bring rate cut Bank of Thailand deputy governor Pongpen Ruengvirayudh has admitted the country's first-quarter gross domestic product growth (GDP) was weaker than expected. "[Growth of] domestic consumption and investment slowed down, while exports remained resilient. We need to consider whether we should do anything [to stimulate growth]," she said yesterday. Ms Pongpen is a member of the central bank's Monetary Policy Committee (MPC). The disappointing growth rate of 5.3% for the first quarter has increased the chances of a reduction in the policy rate at today's MPC meeting. (Bangkok Post)

NBTC says spectra may be returned Some of the 510-790-megahertz spectra to be auctioned for digital TV broadcasting as early as this September may need to be recalled in 2020, says a vice-chairman of the National Broadcasting and Telecommunications Commission (NBTC). Col Natee Sukonrat, who is also chairman of the NBTC's broadcasting committee, said the spectra are not supposed to be used commercially in the first place. The International Telecommunication Union (ITU) has reserved the 700-MHz range for technical harmonisation, with global compliance required from 2020. The 700-MHz range is also reserved for fourth-generation mobile broadband, he said. (Bangkok Post)

Digital media advertising rises by 52% Online searches and social media will drive online marketing and advertising this year, says the Digital Advertising Association of Thailand (DAAT). Digital ad spending in the first four months of this year was lower than industry projections as traditional media such as TV, radio and newspapers still attracted buyers. But digital media still enjoyed strong growth of 52% to THB277m, according to Nielsen Thailand. Siwat Chawareewong, the DAAT president, said digital ad spending is estimated to grow 34.12% to THB3.7bn this year from THB2.7bn last year. (Bangkok Post)

Italthai focuses on 4 core lines, AEC

Following the spin-off of construction giant Italian-Thai Development, Italthai Group, under the leadership of president Yuttachai Jonajit, plans to pursue four business lines and tap the Asian Economic Community (AEC) market. The four core businesses are: distribution of construction machinery and equipment; engineering services for the four core businesses, including energy, electricity and factory systems; industrial services, property/real estate, equity stakes in hotels/hotel management; and restaurants and retail businesses, distribution of imported wine and other beverages, and high-end tea shops (TWG Tea) from Singapore. Italthai Group's target for this year is to achieve THB12bn -THB13bn in overall revenue, or the equivalent of at least 20-per-cent growth, with roughly equal contributions from the four core businesses, he said. (The Nation)

ThaiBev's rat ing downgraded on higher debt level Moody's Investors Service on Tuesday downgraded Thai Beverage (ThaiBev) issuer rating to Baa3 from Baa2, due to the higher debt level following the acquisition of Singapore's Fraser & Neave (F&N). In a statement, Moody’s said the downgrade reflects the view of a more aggressive risk appetite evidenced by the company’s debt-funded acquisition of a 28.61 per cent stake in F&N and execution risks associated with international expansion through its collaboration with F&N. Moody’s put the rating under review in July 2012, after ThaiBev announced the plan to acquire a minority stake in F&N, a pan-Asian consumer group engaged in food and beverages, properties, and publishing and printing. (The Nation)


Economic Highlights

Thailand: Weak GDP may bring rate cut Bank of Thailand deputy governor Pongpen Ruengvirayudh has admitted the country's first-quarter gross domestic product growth (GDP) was weaker than expected. “Growth of domestic consumption and investment slowed down, while exports remained resilient. We need to consider whether we should do anything [to stimulate growth," she said yesterday. Ms Pongpen is a member of the central bank's Monetary Policy Committee (MPC). The disappointing growth rate of 5.3% for the first quarter has increased the chances of a reduction in the policy rate at today's MPC meeting. (Bangkok Post)

Thailand: April power crunch hits production Thailand's Manufacturing Production Index declined 3.8% in April due to lesser production days, as well as a slowdown in export-oriented production, the Office of Industrial Economics (OIE) revealed yesterday. OIE director-general Somchai Harnhirun said that the MPI dropped by 3.8% y-o-y year to 159.16 in April following the government's request to manufacturers to reduce their production days from April 5-12 to deal with lower electricity reserves after Myanmar shut its natural gas fields for maintenance. In April, some sectors saw slowdowns in production - hard-disk drives, electronics parts, ready-to-wear clothes and processed seafood. More than 60% of production in these sectors is exported. (The Nation)

South Korea : April current -account surplus f alls South Korea's current-account surplus fell in April from a four-month high in March as shipments to some of the country's major export destinations, such as Japan, continued to decline, the Bank of Korea said Wednesday. The current-account surplus, the broadest measure of South Korea's trade with the rest of the world, totaled USD3.97bn in April, down from a revised USD4.93 billion in March. That compared with a surplus of USD1.73bn in April last year. The current-account balance remained in the black for the 15th consecutive month, reinforcing market views that the country's fundamentals remain relatively sound despite a global slowdown. (NASDAQ) EU: French consumer confidence slumps, matching 2008 record low The latest surveys of French consumers showed confidence there has slumped to its lowest level since July 2008 immediately after the financial crisis. The national statistics agency Insee which carried out the survey earlier this month, said households were worried about their future financial situation as well as the current state of the economy. The consumer confidence index fell to 79 in May from 83 in April. With the eurozone’s second largest economy in recession, there was a rising concern about people losing their jobs. The unemployment rate in France is close to 11% of the workforce. (Bloomberg) EU: Rajoy awaits reprieve as Spanish recession signs mount Spain will probably secure two more years to tame the largest budget deficit in the European Union as first-quarter data show the effects of the toughest austerity measures in its democratic history. The European Commission will decide tomorrow whether to grant Spain until 2016 to bring its deficit back within the EU limit of 3 percent of gross domestic product. Its verdict is due as a series of releases this week including mortgage lending, gross domestic product and inflation may underline that the construction slump that triggered the nation’s economic crisis in 2008 is far from over. (Bloomberg) US: Home prices rise by most since 2006 in March Spain will probably secure two more years to tame the largest budget deficit in the European Union as first-quarter data show the effects of the toughest austerity measures in its democratic history. The European Commission will decide tomorrow whether to grant Spain until 2016 to bring its deficit back within the EU limit of 3 percent of gross domestic product. Its verdict is due as a series of releases this week including mortgage lending, gross domestic product and inflation may underline that the construction slump that triggered the nation’s economic crisis in 2008 is far from over. (Bloomberg) US: Confidence at five-year high Home prices rose in the 12 months through March by the most in seven years as the recovery in residential real estate gained momentum. The S&P/Case-Shiller index of property values increased 10.9% from March 2012, the biggest 12-month gain since April 2006, after advancing 9.4% in February, a report showed yesterday. Property values may keep climbing as cheaper borrowing costs and gains in confidence lure buyers while the number of houses on the market remains near the lowest level in a decade. (Bloomberg)


Outperform

Current Target Upside/

Recc. Price Price Downside PE (x) Yield (%) Remarks

(Bt) (Bt) (%) 2013f 2013f

THAI Buy 31.25 42.60 36.3 14.7 2.5

Underperform

Current Target Upside/

Recc. Price Price Downside PE (x) Yield (%) Remarks

(Bt) (Bt) (%) 2013f 2013f

PTTGC Sell 74.00 82.10 10.9 9.9 3.5

TOP Neutral 65.75 69.10 5.1 10.7 3.7

SPALI Buy 20.60 15.50 -24.8 10.8 3.7


Diary of Events 7-May 8-May 9-May 10-May 11-May

US Data Arial 7pt. MY Data MY Results Second Chance Properties SIA Engineering OSIM International

US Data MY Data MY Results

US Data MBA Mortage Applications (May 4) MY Data Automobile COE Open Bid Cat A (May 9) Automobile COE Open Bid Cat B (May 9) Automobile COE Open Bid Cat C (May 9) MY Results Singapore Airlines Ltd ASL Marine Holdings Ellipsiz Ltd Sembcorp Marine United Overseas Bank

US Data Initial Jobless Claims (May 5) Continuing Claims (Apr 28) MY Data MY Results Wilmar International City Developments Hiap Hoe Singapore Telecommunications Vicom Ltd

US Data MY Data MY Results Sembcorp Industries Mewah International

14-May 15-May 16-May 17-May 18-May US Data MY Data MY Results SATS Ltd ComfortDelgro Corp

US Data MY Data Retail Sales Ex Auto (YoY) (Mar) Retail Sales (YoY) (Mar) Retail Sales (MoM) sa (Mar) MY Results Fragrance Group Global Premium Hotels First Resources Ltd Armstrong Industrial Olam International

US Data MBA Mortage Applications (May 11) MY Data MY Results

US Data Initial Jobless Claims (May 12) Continuing Claims (May 5) MY Data MY Results

US Data MY Data MY Results Tiger Airways

21-May 22-May 23-May 24-May 25-May US Data MY Data MY Results

US Data Existing Home Sales (Apr) Existing Home Sales MoM (Apr) MY Data MY Results Avago Technologies Ltd

US Data MBA Mortage Applications (May 18) New Home Sales (Apr) New Home Sales MoM (Apr) MY Data Automobile COR Open Bid Cat A (May 23) Automobile COR Open Bid Cat B (May 23) Automobile COR Open Bid Cat C (May 23) MY Results

US Data Initial Jobless Claims (May 12) Continuing Claims (May 5) MY Data Initial Jobless Claims (May 19) Continuing Claims (May12) MY Results Global Logistics Properties Ltd

US Data MY Data MY Results

28 27 23 22 21 28 27 23 22 21

1 INTUCH 282.6 127.3 -206.0 636.8 443.0 KBANK -1,162.2 -365.9 50.5 539.1 405.9 INTUCH 9,578.5 SCC -927.1 INTUCH 34,836.1 SCC -6,609.7

2 LH 190.1 11.6 -26.3 -75.0 -16.1 BAY -115.5 -26.4 280.8 65.7 177.8 PTT 3,267.2 CK -563.7 DTAC 10,226.9 BANPU -3,139.6

3 ADVANC 126.3 -82.5 -180.5 -231.8 -29.6 JAS -42.7 -11.8 -13.3 26.8 101.1 CPN 2,166.0 KTB -538.9 ADVANC 8,772.7 LH -2,718.0

4 TRUE 105.3 46.8 13.2 -44.6 74.9 AAV -29.3 8.6 -165.2 -51.2 -104.2 BAY 2,143.7 TRUE -524.3 PTT 8,600.0 SIRI -1,423.2

5 DTAC 101.7 -68.9 -12.9 91.8 113.1 SCC -24.9 62.8 -93.1 -123.5 -108.8 PTTEP 1,955.3 BANPU -355.1 PTTEP 8,341.3 DEMCO -792.3

6 GLAND 56.8 0.0 0.0 0.1 0.3 SAMART -21.6 -9.2 -0.2 -0.3 -0.9 PTTGC 1,882.8 SPCG -303.5 BAY 8,119.9 TRUE -745.6

7 PTTEP 52.4 -64.3 -101.7 92.7 92.4 SPCG -20.0 -28.5 -20.8 -108.3 -17.2 KBANK 1,637.9 BBL -283.1 PTTGC 7,761.4 CK -699.0

8 GLOW 51.8 1.9 -27.0 2.4 2.1 QH -18.6 -8.8 -3.2 2.5 -11.6 CPALL 1,611.9 ADVANC -220.9 KBANK 5,576.7 UV -496.5

9 CPALL 45.8 -25.1 -25.5 63.6 252.9 CPF -17.6 -52.3 -18.2 2.7 7.0 MAKRO 1,291.9 HMPRO -175.9 TMB 3,913.0 HMPRO -470.5

10 TISCO 42.5 23.1 1.2 18.0 8.7 SCB -16.1 -87.0 -630.3 -68.3 -32.6 THAI 962.8 NOBLE -168.0 TOP 3,552.9 ASP -357.9

11 TOP 34.6 41.7 129.3 178.0 58.1 SPALI -15.1 34.8 52.9 -7.0 22.8 THCOM 771.3 BJC -148.6 BBL 3,543.7 RML -343.5

12 THRE 34.4 0.7 39.5 41.2 -3.0 BLA -14.9 -6.4 -8.7 1.0 6.5 BEC 752.7 MFEC -131.1 CPALL 3,268.8 MINT-W4 -238.0

13 MINT 31.6 31.5 -36.2 -38.6 -17.1 PTT -14.2 12.5 109.0 727.6 300.8 TOP 634.8 TCAP -102.2 MAKRO 3,021.2 STPI -233.3

14 UNIQ 29.8 -4.4 3.2 4.0 2.2 SVI -11.9 -0.2 -0.6 -0.5 -3.5 TMB 607.7 CFRESH -101.8 BIGC 2,976.7 TRC -197.3

15 SNC 22.9 11.9 33.0 42.1 8.9 ROBINS -10.8 -4.4 -6.4 3.9 17.2 MINT 564.0 SVI -98.9 TCAP 2,868.0 LRH -193.4

16 BBL 21.3 -182.9 -243.6 206.0 -152.2 N-PARK -9.7 0.1 2.9 0.2 1.5 TUF 553.5 MCOT -96.8 CPF 2,680.0 IRPC -182.2

17 HMPRO 20.4 -3.1 0.1 11.3 3.3 TMB -9.3 0.7 -21.8 -1.3 -9.0 AOT 550.9 AP -75.4 CPN 2,151.3 NOBLE -162.5

18 EGCO 19.9 5.9 15.0 2.5 11.3 MALEE -8.3 -23.5 -14.3 -3.9 -2.8 AAV 418.2 TWFP -73.7 TUF 2,138.8 GUNKUL -150.8

19 PTTGC 18.0 37.9 -59.4 -0.7 181.5 E -8.1 -0.1 -0.2 1.5 -0.6 DTAC 417.3 UV -73.4 SPALI 2,031.1 AMATA -136.5

20 KTB 17.9 -75.4 -7.9 -419.4 -207.2 KGI -7.2 -1.7 10.0 0.6 -1.0 BIGC 355.4 ROBINS -70.2 THAI 1,994.2 TWFP -128.7

% % of % of

Turn. paidup paidup

1 N-PARK 6.12 1 TISCO-P 66.16 65.86

2 BLAND 3.04 2 BBL 31.08 29.99

3 LH 23.29 3 TISCO-T1 30.07 65.86

4 TRUE 2.31 4 KBANK 29.63 28.50

5 HEMRAJ 66.05 5 SPALI 22.07 17.94

6 GLAND 1.23 6 GOLD-W1 21.50 14.87

7 BAY 25.13 7 LPN 21.33 21.73

8 AAV 11.82 8 E-W1 19.48 22.27

9 KBANK 41.77 9 THRE 18.81 15.50

10 SIRI 4.18 10 INTUCH 18.55 5.41

11 JAS 2.29 11 LH 17.93 21.18

12 MINT 31.96 12 SPCG-W1 17.86 13.31

13 GSTEL 5.32 13 TWFP 16.55 24.77

14 TMB 3.47 14 DTAC 15.71 13.33

15 BTS 2.94 15 TCAP 15.53 12.60

16 QH 2.77 16 AP 15.38 12.92

17 HMPRO 12.33 17 BAY 15.30 13.89

18 INTUCH 14.16 18 TISCO 14.53 13.69

19 E 10.78 19 THIP 14.50 12.64

20 ANAN 13.57 20 LALIN 14.02 13.53

Source : SET.OR.TH

29 May 2013

May 13 May 13

Total Volume Shares

(Last)

NVDR Shrs. Paid up CapitalNVDR Shrs.

28-May-13 2-Jan-13

Net Buy Net Sell Net Buy Net Sell

2 Jan- 28 May 131-28 May 13

1,908,842,894

13,170,900 94,852,100 22,400 22,300 108,023,000 -81,681,200

14,174,200

33,858

16,489,600 717,200 17,206,800

NetBuy Sell Total

12,614,200 3,122,100 15,736,300

572,486,791 1,521,500

11,149,598 22,300

593,210,391 12,652,700 26,826,900

2,393,260,193

15,772,400

1,716,553,249

37,075,711

709,066,424

307,949,569 378,793,223

9,492,100 682,155,834

418,421,323

7,502,000 6,596,800

8,852,523 -5,647,877

2,971,800 6,217,718 9,189,518 -3,245,918

1,602,323

14,098,800 905,200

9,135,800 -4,860,000

13,156,829 13,066,571 89,950,903 74,970,598

7,250,200

2,137,900 6,997,900

13,111,700 45,129

1,475,698,768

347,000,000

314,795,836 320,609,239

67,580,742 77,281,246

3,512,494,860

3,206,420,305

660,553,503 544,461,149

594,709,772 173,363,101

2,123,251,472 10,025,921,523 1,797,944,729

50,021,700 37,278,800 279,999,581

8,000,000

727,878,228

2,859,920,138

929,279,240

1,011,300

367,964,647

6,074,143,747

5,554,400 5,554,400

5,364,400

4,613,700 1,562,500

20,000 5,344,400

-

6,176,200

111,592,900 825,000,000

6,890,330 1,249,470

105,761,926 99,645,251

1,159,700

115,637,600 -5,324,400

-5,554,400

3,051,200

843,803,210

198,484,732 161,065,653

439,961,279 -4,527,016

1,277,816,397 1,188,000

-4,440,500

3,453,168

1,573,716 2,354,634 9,506,055

2,367,811,000 371,961,229 315,525,949

5,923,500 2,658,600 8,582,100 3,264,900

2,043,200 6,483,700 8,526,900

4,069,900 2,820,430

7,218,200

-

1,828,900 5,389,300

6,966,0002,889,000

7,868,200 7,868,200

1,161,232

7,868,200

1,213,500

4,077,000

5,740,516 6,954,016

-3,560,400

8,067,5684,614,400

Most Active Volume (shares) NVDR Shares to Total Paid-up Shares(%)

NET BUY NET SELL Month to Date Year to Date

Most Active Values (Btmn)

THAI NVDR : Top Ranking

See important disclosures at the end of this report Powered by Enhanced Datasystems’ EFATM

Platform 1

Company Update, 28 May 2013

Bangkokland (BLAND TB) Buy (Maintained) Property - Real Estate Target Price: THB2.56

Market Cap: USD1,348m Price: THB1.95

Trading Below Current Book Value

Macro

1.00

Risks

3.00

Growth

1.00

Value

2.00

78

103

128

153

178

203

228

253

278

303

328

0.5

0.7

0.9

1.1

1.3

1.5

1.7

1.9

2.1

2.3

2.5

Bangkokland (BLAND TB)

Price Close Relative to Stock Exchange of Thailand Index (RHS)

1

1

2

2

3

3

4

4

5

Ma

y-1

2

Ju

l-1

2

Oct-

12

De

c-1

2

Fe

b-1

3

Ap

r-1

3

Vo

l b

n

Source: Bloomberg

Avg Turnover (THB/USD) 839m/28.5m

Cons. Upside (%) 75.9

Upside (%) 31.3

52-wk Price low/high (THB) 0.67 - 2.24

Free float (%) 56

Shareholders (%)

Nontrust Nominees LTD. 22.6

Anant Kanjanapas 15.2

Thai NVDR 4.5

Shariah compliant

Wanida Geisler 66 2862 9748

[email protected]

Forecasts and Valuations Mar-11 Mar-12 Mar-13 Mar-14F Mar-15F

Total turnover (THBm) 2,873 3,354 3,727 4,004 4,351

Recurring net profit (THBm) (29) 498 323 438 495

Net profit growth (%) 0.0 (21.8) 276.3 (81.3) 13.1

Consensus EPS (THB) 0.02 0.02

EPS (THB) 0.04 0.03 0.13 0.02 0.02

DPS (THB) 0.00 0.00 0.03 0.03 0.03

Dividend Yield (%) 0.0 0.0 1.5 1.5 1.5

Return on average assets (%) 0.0 1.6 5.2 0.8 0.9

Return on average equity (%) 0.0 2.3 7.0 1.0 1.1

P/E (x) 43.7 55.8 14.8 85.5 82.4

P/B (x) 1.33 1.30 0.86 0.89 0.90

Net debt to equity (%) 4.6 4.0 8.4 (1.7) (2.9)

Source: Company data, RHB Estimates

Bangkokland (BLAND)’s book value (BV), rose to THB2.27/share partly on the revaluation of Impact Exhibition Center. Had the landbank be appraised, its BV will increase by another THB0.9/share. The stock’s near-term catalysts include monetizing Impact into a REIT, the Government’s new pink-line BTS route running close to or into its landbank, and new development projects in its Makasan landbank located near the main airport link station.

Recurring profit in line. BLAND posted a recurring profit of THB323m

for its FY13 ended 13 March, in line with our estimates. Property sales were flat at THB1.3bn but rental/service income from Impact Exhibition Center (Impact) grew 20% y-o-y to THB2.4bn. While the gross margin from property sales increased to 27% (FY12: 23%), the gross margin from the exhibition center was flat y-o-y, at 50%.

Impact revaluation boosted FY13 earnings. BLAND’s combined extra

gains in FY13 stood at THB2.58bn, of which THB2.1bn was the gain from the revaluation of Impact in 4Q13. We had earlier estimated this asset’s value at THB2.7bn. Since the company plans to sell Impact into a Real Estate Investment Trust (REIT), another round of asset appraisals will need to be undertaken. By that time, BLAND will be able to book in the last portion of asset revaluation gains.

Current BV of THB2.27/share is ~17% higher than its share price.

The revaluation of Impact helped to boost its BV as at 31 March 2013 to THB2.27/share, which is in line with our earlier estimate of THB2.30. Revaluation of its landbank of 1,908 rai, appraised according to Department of Land standards, will add another THB0.9/share to its BV. Our TP of THB2.56 is ~20% discount to its adjusted BV.

Maintain BUY. Near-term catalysts for the stock include: i) the

monetization of Impact into a REIT, ii) the Government’s new pink-line Bangkok Mass Transit System (BTS) route, which is likely to run close to or even into its landbank, and iii) new development projects on its Makasan landbank located close to the main airport link station. The company’s long-term plans include new residential projects worth THB60bn on its 1,350-rai plot of land near Srinakarin road, which will take seven to 10 years to fully develop.

Bangkokland (BLAND TB) 28 May 2013

See important disclosures at the end of this report 2

Figure 1: Results review Year to March 31 4QFY13 y-o-y q-o-q FY13 y-o-y

(THBm) % % (THBm) % FY 13 remarks

Sales 165 -55.2 -46.4 1,308 (1.7) Mainly from property sales Service income-Impact

541 -21.8 -18.3 2,420 19.6 Income from Impact Exhibition Center came in higher than Management estimate

Total 705 -33.4 -27.2 3,727 11.1 Operating profit 11 -95.3 -96.2 535 44.9 Overall operating margin improved from 11% in FY12 to 14% EBIT 5 -98.4 -98.4 624 (5.2) EBIT slipped, given a decrease in other incomes EBT -72 -124.1 -124.3 504 (14.7) Extra gains 1,084 n.a. 43.8 2,581 673.0 Including THB2.1bn gains from the revaluation of Impact

Exhibition Center Net profit 895 1,124.2 23.9 2,338 276.3 Gross margin%-Sales

20.3% 27.3% Improved from 23% in FY12

Gross margin%-Service income

36.7% 50.2% Flat y-o-y

EBIT margin% 3.0% 16.7% Net margin% 543.8% 62.7%

Source: Company Data, RHB Estimates



Financial Exhibits

Profit & Loss (THBm) Mar-11 Mar-12 Mar-13 Mar-14F Mar-15F

Total turnover 2,873 3,354 3,727 4,004 4,351

Cost of sales (1,661) (2,029) (2,157) (2,243) (2,419)

Gross profit 1,212 1,325 1,571 1,762 1,932

Gen & admin expenses (910) (955) (1,036) (1,201) (1,305)

Operating profit 301 369 535 560 627

Operating EBITDA 784 894 1,099 1,133 1,204

Depreciation of fixed assets (483) (525) (564) (573) (577)

Operating EBIT 301 369 535 560 627

Net income from investments 70 - - - -

Other recurring income 180 266 63 50 55

Interest income 20 23 26 - -

Interest expense (143) (67) (120) (63) (63)

Exchange gains (279) 183 127 - -

Exceptional income - net 974 151 2,454 - -

Pre-tax profit 1,122 925 3,085 548 619

Taxation (174) (170) (552) (110) (124)

Minority interests (154) (134) (195) - -

Profit after tax & minorities 794 621 2,338 438 495

Reported net profit 794 621 2,338 438 495

Recurring net profit (29) 498 323 438 495


Cash flow (THBm) Mar-11 Mar-12 Mar-13 Mar-14F Mar-15F

Operating profit 301 369 535 560 627

Depreciation & amortisation 483 525 564 573 577

Change in working capital 351 (362) 64 (1,028) (744)

Other operating cash flow (108) 708 (2,334) 22 25

Operating cash flow 1,028 1,241 (1,171) 127 485

Interest received 22 23 26 - -

Interest paid (143) (67) (120) (63) (63)

Tax paid (170) 1,453 (110) (124)

Cash flow from operations 907 1,027 188 (45) 299

Capex (1,291) (919) (2,303) (831) (200)

Other new investments 1,000 - - -

Other investing cash flow (590) 628 129 (363) 55

Cash flow from investing activities (881) (291) (2,174) (1,194) (145)

Dividends paid - - (356) (619) (637)

Proceeds from issue of shares 4 - 385 5,409 1,016

Increase in debt (210) (63) 1,776 (1,850) -

Other financing cash flow (26) (9) (44) - -

Cash flow from financing activities (232) (72) 1,762 2,940 379

Cash at beginning of period 1,109 902 1,566 1,342 3,042

Total cash generated (206) 664 (224) 1,700 533

Implied cash at end of period 902 1,566 1,342 3,042 3,575




Financial Exhibits

Balance Sheet (THBm) Mar-11 Mar-12 Mar-13 Mar-14F Mar-15F

Total cash and equivalents 1,718 1,782 1,455 3,787 4,319

Inventories 1,290 1,082 14,071 14,775 15,513

Accounts receivable 299 326 362 405 440

Other current assets 168 186 61 229 249

Total current assets 3,475 3,375 15,949 19,195 20,521

Total investments 706 706 3,392 3,392 3,392

Tangible fixed assets 34,743 34,929 30,812 30,508 30,203

Total other assets 167 132 649 649 649

Total non-current assets 35,617 35,768 34,853 34,549 34,244

Total assets 39,092 39,143 50,802 53,744 54,766

Short-term debt 3,165 3,076 3,002 3,002 3,002

Accounts payable 321 272 573 349 376

Other current liabilities 3,692 3,368 2,624 2,804 2,898

Total current liabilities 7,177 6,717 6,199 6,154 6,277

Total long-term debt - - 1,850 - -

Other liabilities 557 314 2,321 2,321 2,321

Total non-current liabilities 557 314 4,171 2,321 2,321

Total liabilities 7,734 7,030 10,370 8,475 8,598

Share capital 17,794 17,794 17,795 20,642 21,240

Retained earnings reserve 8,935 9,556 11,538 11,379 11,262

Other reserves (557) (557) 11,099 13,248 13,667

Shareholders' equity 26,172 26,793 40,432 45,269 46,168

Minority interests 5,186 5,320 0 - -

Other equity 0 (0) 0 0 0

Total equity 31,358 32,112 40,432 45,269 46,168

Total liabilities & equity 39,092 39,143 50,802 53,744 54,766


Key Ratios (THB) Mar-11 Mar-12 Mar-13 Mar-14F Mar-15F

Revenue growth (%) 0.0 16.7 11.1 7.4 8.7

Operating profit growth (%) 0.0 22.6 44.9 4.7 11.9

Net profit growth (%) 0.0 (21.8) 276.3 (81.3) 13.1

EPS growth (%) 0.0 (21.8) 276.3 (82.6) 3.8

Bv per share growth (%) 0.0 2.4 50.9 (3.5) (0.9)

Operating margin (%) 10.5 11.0 14.4 14.0 14.4

Net profit margin (%) 27.6 18.5 62.7 10.9 11.4

Return on average assets (%) 0.0 1.6 5.2 0.8 0.9

Return on average equity (%) 0.0 2.3 7.0 1.0 1.1

Net debt to equity (%) 4.6 4.0 8.4 (1.7) (2.9)

DPS 0.00 0.00 0.03 0.03 0.03

Recurrent cash flow per share 0.05 0.06 0.01 (0.00) 0.01




SWOT Analysis

Owns the 200k sq m Impact Exhibition Center, one of Asia’s top exhibition centers

Huge landbank of almost 2,000 rai in Bangkok suburbs, where new mass transit routes are going to be developed

Delay in the development of Bangkok’s mass transit system

Hard to compete in the residential market with a weak brand

Monetizing Impact Exhibition via a REIT.

Appraisal prices of its landbank are significantly above its current book value.

Has a weak brand, as it was in the debt rehabilitation plan over the past decade

Massive outstanding warrants of almost 9bn units to be exercised over the next two to five years.

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Source: Company data, RHB Estimates Source: Company data, RHB Estimates

Company Profile Bangkokland and its subsidiaries develop properties for sale and rental. Its projects include condominiums, sports complexes, offices and commercial buildings. The company also owns and operates an exhibition center (IMPACT Muang Thong Thani), provides building maintenance and management services and is involved in the retail business.



Recommendation Chart

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6 Recommendations & Target Price

Buy Neutral Sell Trading Buy Take Profit Not Rated

Source: RHB Estimates, Bloomberg

Date Recommendation Target Price Price

2013-04-26 Buy 2.56 2.00

2013-04-22 Buy 2.56 1.96

2013-03-06 Buy 2.56 2.16

2013-01-29 Buy 2.56 1.69

Source : RHB Estimates, Bloomberg

7

RHB Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next 12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage Disclosure & Disclaimer All research is based on material compiled from data considered to be reliable at the time of writing, but RHB does not make any representation or warranty, express or implied, as to its accuracy, completeness or correctness. No part of this report is to be construed as an offer or solicitation of an offer to transact any securities or financial instruments whether referred to herein or otherwise. This report is general in nature and has been prepared for information purposes only. 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8

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