TRIS Rating Co., Ltd. has affirmed the company rating of Preuksa Real Estate PLC (PS) at “BBB+”. At the same time, TRIS rating has assigned the “BBB+” rating to PS’s proposed up to Bt2,000 million senior debentures. The rating outlook is “positive”. The ratings continue to reflect PS’s leading position in the low-priced townhouse market, its ability to control construction costs, and strong balance sheet. The ratings also take into consideration slowing demand for residential property as a result of lower-than-expected GDP growth, an unstable political situation, and declining consumer confidence.
The “positive” outlook reflects the expectation that PS will be less affected by the slowdown in the residential property market than other developers. Though demand for Bt1-Bt2 million housing units may be soft as the overall market weakens, competition in this market is moderate due to fewer developers than other segments. With the company’s economies of scale and cost advantage, PS should be able to outperform the market during 2007-2008.
TRIS Rating reported that PS is one of the leading residential property developers in Thailand. The company was established in 1993 by Mr. Thongma Vijitpongpun and was listed on the Stock Exchange of Thailand (SET) in December 2005. As of March 2007, the Vijitpongpun family held 78% of the company’s share. PS’s residential projects focus on low-priced townhouse development on the outskirts of Bangkok. During the last three years, more than 57% of sales were from townhouses while the remainder was from single detached houses (SDH). The average unit prices were Bt0.9 million for townhouses and Bt2.8 million for SDHs. PS’s competitive advantages stem from its ability to manage nearly all phases of project construction with an efficient construction technique and pre-cast materials from its own factory. These advantages enable the company to shorten construction period and maintain cost leadership in the residential property market.
TRIS Rating said, PS sales performance during the first three months of 2007 was satisfactory. Though sales dropped by 9% to Bt1,887 million in the first three months of 2007, from the same quarter of prior year, new presales for the first three months of 2007 increased by 26%. The company’s profitability remains healthy, albeit declining; with its adjusted operating margin maintained at 20% during 2006 and the first three months of 2007. The balance sheet remains very strong with a debt to capitalization ratio of 12.46% as of March 2007.
Political uncertainty has further deteriorated consumer confidence and softened the housing market. Though inflationary pressures and interest rates are easing, demand for residential property is expected to remain soft in 2007-2008, said TRIS Rating. -- End
Preuksa Real Estate PLC (PS)
Company Rating: Affirmed at BBB+
Issue Rating:
Up to Bt2,000 million senior debentures due within 2011 BBB+
Rating Outlook: Positive
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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.
The “positive” outlook reflects the expectation that PS will be less affected by the slowdown in the residential property market than other developers. Though demand for Bt1-Bt2 million housing units may be soft as the overall market weakens, competition in this market is moderate due to fewer developers than other segments. With the company’s economies of scale and cost advantage, PS should be able to outperform the market during 2007-2008.
TRIS Rating reported that PS is one of the leading residential property developers in Thailand. The company was established in 1993 by Mr. Thongma Vijitpongpun and was listed on the Stock Exchange of Thailand (SET) in December 2005. As of March 2007, the Vijitpongpun family held 78% of the company’s share. PS’s residential projects focus on low-priced townhouse development on the outskirts of Bangkok. During the last three years, more than 57% of sales were from townhouses while the remainder was from single detached houses (SDH). The average unit prices were Bt0.9 million for townhouses and Bt2.8 million for SDHs. PS’s competitive advantages stem from its ability to manage nearly all phases of project construction with an efficient construction technique and pre-cast materials from its own factory. These advantages enable the company to shorten construction period and maintain cost leadership in the residential property market.
TRIS Rating said, PS sales performance during the first three months of 2007 was satisfactory. Though sales dropped by 9% to Bt1,887 million in the first three months of 2007, from the same quarter of prior year, new presales for the first three months of 2007 increased by 26%. The company’s profitability remains healthy, albeit declining; with its adjusted operating margin maintained at 20% during 2006 and the first three months of 2007. The balance sheet remains very strong with a debt to capitalization ratio of 12.46% as of March 2007.
Political uncertainty has further deteriorated consumer confidence and softened the housing market. Though inflationary pressures and interest rates are easing, demand for residential property is expected to remain soft in 2007-2008, said TRIS Rating. -- End
Preuksa Real Estate PLC (PS)
Company Rating: Affirmed at BBB+
Issue Rating:
Up to Bt2,000 million senior debentures due within 2011 BBB+
Rating Outlook: Positive
----------------------------------------------------------
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.