ORI projects to gain a total revenue of 14,000 million baht in 2021, an increase of 26%. The company currently has a backlog contract of 35,834 million baht which is expected to recognize revenue of 14,410 million baht this year, signalling a 1Q21F to grow significantly after recognizing revenue from sales in 2 months of 4,000 million baht. Also, ORI aims to launch 20 new projects worth 20,000 million baht, therefore, estimated income from sales is 29,000 million baht.
KTBST Securities (KTBST) reiterates a “BUY” rating on Origin Property Public Company Limited (ORI) and a target price of ฿10.00/share, which is pegged to 2021E PER of 7.9x (the mean of its 5-year historical level). ORI reported 4Q20 earnings results that were in line with Bloomberg consensus and KTBST forecast. Net profit dropped -27% YoY, –10% QoQ to 642 million baht.
KTBST views such decline as a temporary matter as a new round of the COVID-19 outbreak caused a slow in condo transfers in December. In 2020, net profit fell -12% to 2.7 billion baht.
Projecting 2021E net profit to grow +20% to 3.2 billion baht, but core profit is estimated to grow at a faster pace of +29%. The current backlog has covered 75% of KTBST 2021E revenue forecast, and ORI is expected to recognize lump sum revenue in expectation of a start of eight condo projects.
In 1Q21E, KTBST forecasts net profit to grow both YoY, QoQ as 1) ORI is expected to recognize revenue of 2.0 billion baht given its carry-forward backlog of 2.0 billion baht from 4Q20; and 2) ORI has a plan to begin ownership transfer of two condo projects. Therefore, seeing upside to its forecast, as ORI is expected to record a gain of 100-200 million baht should the company sell its shares in 2-3 subsidiaries to its JVs.
ORI’s share price underperformed the SET Index by 17% in three months in response to subdued 4Q20 earnings. KTBST views such decline as an opportunity to increase positions, as KTBST forecasts 2021E earnings to improve significantly while 1Q21E net profit is expected to grow sharply YoY, QoQ.