At the conclusion of 2023, SPALI entered into an agreement with Stockland Communities Partnership, a subsidiary of Stockland Corporation, a prominent Australian listed developer, to jointly invest in acquiring a 49.9% stake in a joint venture. This venture is set to procure an additional 12 property projects valued at approximately Bt12 billion. The deal has been undergoing evaluation by Australian authorities since its inception.
SPALI anticipates the finalization of the deal by the conclusion of the third quarter of 2024 or potentially in the early stages of the fourth quarter of 2024. Upon completion, SPALI will possess a total portfolio of 24 projects spanning across four states and six major cities in Australia.
KGI Securities projects that the profit share from these joint ventures is expected to experience a YoY growth of nearly double, surpassing Bt500 million in the upcoming year.
SPALI is projected to witness YoY and QoQ growth in its 3Q24F earnings, driven by new launches valued at Bt15 billion, the completion of a newly constructed condominium worth Bt1.1 billion, such as the Supalai Loft Phasi Charoen Station, and increased transfers of the Supalai Icon Sathorn property.
Though the company’s 1H24 earnings of Bt2.2 billion reflected a 20% YoY decline, accounting for 44% of the full-year forecast, the earnings in 2H24 is expected to be stronger. KGI Securities has upheld its 2024F net profit forecast at Bt5 billion, depicting a 16% decrease YoY.
The analyst has increased the 2025F net profit forecast by 11% for SPALI, accounted to two main factors:
- Anticipated higher revenue growth due to an improved operating environment in the upcoming year.
- Expectation of a greater share of profit following the acquisition of 12 additional joint ventures by the end of 2024.
SPALI’s 2025F net profit could grow by 5% YoY to reach Bt5.3 billion. The company’s backlog of Bt16.5 billion, of which Bt2.2 billion (14% of the total backlog) is set to be realized as revenue next year, indicating that only 8.5% of SPALI’s residential revenue is currently secured.
This underscores the importance for SPALI to focus on enhancing sales to boost its top line for the upcoming year through selling and transferring completed inventories effectively.
KGI Securities upgraded SPALI’s rating to ‘Neutral’, with a target price of Bt17.30 per share.
