SC Asset Corporation:New project launches seen as key to driving presales to hit FY16target
SC reported its total presales remained weak in 8MFY16 at Bt6.8bn, accounting for a mere 46% ofits full-year target of Bt15bn. For the period, condo presales were still stuck in slow lane as it took inonly Bt1.5b, which remained far from its full-year target of Bt6bn. Even though SC launched twonew condo projects worth a combined Bt4.9bn, namely Beatniq and Chamber Chann during theperiod, the average take-up rate was however low at only 30%. Much of the condo presalestherefore came from sales of condo inventories from existing projects including the likes of ‘TheCrest Santora Hua Hin,’ ‘The Centric Ratchada-Huay Khwang,’ and ‘The Centric Sea Pattaya’ whichhad remaining sales value of Bt479mn, Bt638mn and Bt667mn respectively after 71%, 78% and77% of these projects were sold out. On the other hand, the take-up rate for its super luxury‘Saladaeng One’ still moved at a snail’s pace, holding steady around 42%-43% due partly to the highprice tag which caused potential buyers to take more time to make up their minds and sometimesdelay their buying decisions until construction was near completion. To speed up condo presales tomeet its full-year target, SC plans to launch the following two new condo projects: (i) the Bt8bnsuper luxury ‘28 Chidlom’ and (ii) the Bt800mn ‘Chamber Cher Ratchada-Ramintra.’ Given theproject location in downtown Bangkok, we reckon that the take-up rate for the ‘28 Chidlom’ may hit50%, translating into presales of around Bt4bn, putting SC’s total condo presales back on track tomeet its full-year target of Bt6bn. On the low-rise front, we are very satisfied with its SDH/THpresales numbers, which clocked in at Bt5.3bn in 8MFY16. SC needs to generate additional SDH/THpresales of Bt3.7bn, or a monthly average of Bt900mn to achieve its full-year target of Bt9bn.
Notwithstanding that YTD average monthly SDH/TH presales were only Bt700mn, we believe itsnew project launch plan in 4QFY16 would quicken the pace of its average monthly presales and putits total SDH/TH presales back on course to hit the full-year mark. SC plans to launch three newSDH/TH projects worth a combined Bt3.5bn in 4QFY16.