TRIS Rating Co., Ltd. has affirmed the ratings of the senior debentures worth Bt800 million (LALI077A, LALI078A) of Lalin Property PLC (LALIN) at “BBB+” with “stable” outlook. The ratings reflect the company’s track record in the middle-income housing market, its cost competitive position
and its healthy balance sheet. The ratings also take into consideration the company’s weaker-than-expected operating performance and the cyclical nature of the property development market. A
slowdown in the housing market due to declining consumer confidence and an uncertain political situation are also rating concerns.
The “stable” outlook reflects the expectation that LALIN will be able to maintain its position in
the housing market. With its cost effectiveness and conservative financial policy, the company is
expected to be able to weather the cyclical downturn of the housing market.
TRIS Rating reported that LALIN is a medium-sized housing developer. It was established in
1988 by Mr. Taveesak Watcharakkawongse and Mr. Chaiyan Chakarakul, who have consistently held two-thirds of the company’s shares. LALIN develops housing projects primarily in the Bangkok Metropolitan Area (BMA). Its main housing products are single detached houses (SDH), twin houses, and townhouses with an average price of Bt3 million per unit. The company’s competitive advantage stems from its ability to control construction and overhead costs, which enables the company to
offer lower prices while achieving favorable profit margins. As of September 2006, the company
had 20 housing projects on hand which is able to contribute sales for 2-2.5 years. Due to uncertain circumstances, the company may slow opening new projects and focus on selling housing units in
existing projects in 2007.
LALIN’s operating performance deteriorated in 2006. The number of new units sold for the
first nine months of 2006 dropped by 25% compared with the 2005 figures. Revenue decreased
to Bt1,488 million during the first nine months of 2006 from Bt2,020 million for the same period
of 2005. The company’s gross margin of 40% and adjusted operating margin of 30%, however, remain higher than the industry average. LALIN’s capital structure is sufficiently strong. As of September
2006, its debt-to-capitalization ratio was 23%. Total debt was worth Bt974 million, including its Bt800 million in debentures due in 2007. TRIS Rating views that LALIN’s cash on hand of Bt505 million, unused credit facilities of Bt643 million as of December 2006 and a healthy balance sheet should
enable the company to refinance or repay the debentures as scheduled.
TRIS Rating said that the political uncertainty following the bombings in Bangkok on 31 December 2006 has further deteriorated consumer confidence and softened the housing market. Though inflationary pressures and interest rates are expected to be alleviated, residential demand is expected to continue to be soft in 2007-2008. -- End
Lalin Property PLC (LALIN)
Issue Ratings:
LALI077A: Bt400 million senior debentures due 2007 Affirmed at BBB+
LALI078A: Bt400 million senior debentures due 2007 Affirmed at BBB+
Rating Outlook: Stable
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Copyright 2007, TRIS Rating Co.,Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.
and its healthy balance sheet. The ratings also take into consideration the company’s weaker-than-expected operating performance and the cyclical nature of the property development market. A
slowdown in the housing market due to declining consumer confidence and an uncertain political situation are also rating concerns.
The “stable” outlook reflects the expectation that LALIN will be able to maintain its position in
the housing market. With its cost effectiveness and conservative financial policy, the company is
expected to be able to weather the cyclical downturn of the housing market.
TRIS Rating reported that LALIN is a medium-sized housing developer. It was established in
1988 by Mr. Taveesak Watcharakkawongse and Mr. Chaiyan Chakarakul, who have consistently held two-thirds of the company’s shares. LALIN develops housing projects primarily in the Bangkok Metropolitan Area (BMA). Its main housing products are single detached houses (SDH), twin houses, and townhouses with an average price of Bt3 million per unit. The company’s competitive advantage stems from its ability to control construction and overhead costs, which enables the company to
offer lower prices while achieving favorable profit margins. As of September 2006, the company
had 20 housing projects on hand which is able to contribute sales for 2-2.5 years. Due to uncertain circumstances, the company may slow opening new projects and focus on selling housing units in
existing projects in 2007.
LALIN’s operating performance deteriorated in 2006. The number of new units sold for the
first nine months of 2006 dropped by 25% compared with the 2005 figures. Revenue decreased
to Bt1,488 million during the first nine months of 2006 from Bt2,020 million for the same period
of 2005. The company’s gross margin of 40% and adjusted operating margin of 30%, however, remain higher than the industry average. LALIN’s capital structure is sufficiently strong. As of September
2006, its debt-to-capitalization ratio was 23%. Total debt was worth Bt974 million, including its Bt800 million in debentures due in 2007. TRIS Rating views that LALIN’s cash on hand of Bt505 million, unused credit facilities of Bt643 million as of December 2006 and a healthy balance sheet should
enable the company to refinance or repay the debentures as scheduled.
TRIS Rating said that the political uncertainty following the bombings in Bangkok on 31 December 2006 has further deteriorated consumer confidence and softened the housing market. Though inflationary pressures and interest rates are expected to be alleviated, residential demand is expected to continue to be soft in 2007-2008. -- End
Lalin Property PLC (LALIN)
Issue Ratings:
LALI077A: Bt400 million senior debentures due 2007 Affirmed at BBB+
LALI078A: Bt400 million senior debentures due 2007 Affirmed at BBB+
Rating Outlook: Stable
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Copyright 2007, TRIS Rating Co.,Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.