11 August 2021 | By Krungsri Securities
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Weak earnings, even better than expected
Better than expected profit
ANAN reported 2Q21 profit of 9 million baht, up 64% qoq and 102% yoy. The performance beat our forecast of a loss of around 9 million baht, and the market is looking at a loss of 12 million baht. However, 1H21 profit accounted for only 5. % of our FY21 earnings forecast
Weak earnings, even better than expected
The better-than-expected performance came from revenues in the transfer and administrative fees. Even better than expected profits But we view the overall performance is still weak.
In terms of percentage change Earnings may appear to be a strong recovery in qoq terms, but in monetary terms. Profit recovered slightly from 6 million baht in the previous quarter to 9 million baht, and will be reduced to 7 million baht, excluding profits from businesses that will not continue to be about 2 million baht.
In addition, the strong yoy growth outlook was largely a result of last year’s Q2 record loss in construction business. Looking at ANAN’s key items such as transfers and JV earnings, these items are still weak.
The transfer of housing is mainly from low-rise projects, which ANAN does not have expertise in yet. It swings at 600 million baht per quarter compared to an average of 2 billion baht per quarter in the past several years. Meanwhile, the share of profit from JV, which comes from the JV condos, fell 78% qoq and 85% yoy to just 34 million baht.
- Implication/ Recommendation
Weak performance and pressure on litigation issues
We maintain our SELL recommendation for ANAN with a target price of 0.9 baht.
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