Bangkok--27 Jun--TRIS Rating TRIS Rating Co., Ltd. has affirmed the ratings of Land & Houses PLC (LH) and its existing senior debentures at “A”. At the same time, TRIS Rating has assigned the “A” rating to LH’s proposed issue of up to Bt3,000 million in senior debentures. The out look remains “stable”. The ratings reflect LH’s leading position in the residential property market, its well-recognized brand and proven record of providing good quality housing units to customers, and its healthy balance sheet. The ratings also take into consideration the slowdown in demand for residential property and the cyclical nature of the property market. The uncertain political situation and declining consumer confidence remain rating concerns. The “stable” outlook reflects TRIS Rating’s expectation that LH will be able to maintain its satisfactory residential sales performance despite the weak single detached house (SDH) market. As a pre-built developer with completed SDH units ready for sale, the company should benefit significantly from the current tax stimulus package for the residential market.TRIS Rating reported that LH has long been Thailand’s leading residential developer. It was established in 1983 by the Asavabhokhin family. As of April 2008, the Asavabhokhin family held 32% of the company’s shares, followed by the Government of Singapore Investment Corporation (GIC) (16.5%). LH’s core products are SDHs, which contributed approximately 90% of the company’s sales during the last five years, while the balance was from townhouses and condominiums. As of March 2008, LH had 36 projects on hand worth Bt30,223 million, of which SDH projects accounted for 97%. In 2007, LH outperformed the residential property market. While the developer-built SDH registered units further declined by 2% in 2007, LH’s transferred units rose by 4%, resulting in higher market share in the SDH market. The company’s decision to suspend the transfer of housing units for three weeks until the announced tax reductions became effective on 29 March 2008 caused LH’s residential sales in the first quarter of 2008 to decline by 6%. However, the company’s operating profit margin before depreciation and amortization in the first quarter of 2008 improved to 17.5% from 15.3% for the same period of 2007. TRIS Rating said, LH’s balance sheet remains healthy. Its debt-to-capitalization ratio as of March 2008 improved to 31.9% from 35.4% at the end of 2007. In 2008, the company plans to launch 14 new projects, with an average unit price of Bt4.8 million, reflecting a strategic shift towards the medium-priced segment. With a land acquisition budget of Bt4,000 million a year and a budget of Bt1,700 million annually to develop a property for rent, LH’s leverage may increase to 40%-45% during 2008-2010. Demand for residential property depends on the country’s overall economic prospects. The Thai economy is expected to show modest growth, with gross domestic product (GDP) forecast to grow by 4.5%-5.5% in 2008. A newly-announced government stimulus package, including reductions of both the special business tax for residential developers and the transfer fee for home buyers and property developers, may help alleviate the slowdown in demand for residential property and boost consumer confidence, said TRIS Rating. Land & Houses PLC (LH) Company Rating: Affirmed at A Issue Ratings: LH094A: Bt1,500 million senior debentures due 2009 Affirmed at A LH104A: Bt2,000 million senior debentures due 2010 Affirmed at A LH119A: Bt2,000 million senior debentures due 2011 Affirmed at A Up to Bt3,000 million senior debentures due 2012 A Rating Outlook: Stable