DBS Vickers Securities (DBSVS) estimated Noble Development Public Company Limited (NOBLE)’s 1Q21 net profit of 503 million baht (+22% YoY) from higher recognized ownership transfer, but would drop QoQ. Presales would grow by 16% to 2.5 billion baht and will perform better in 2H21 due to new projects launching in 2021. Gross profit margin in 1Q21 was 40%, dripped from 41% in the same period of last year.
However, DBSVS has cut 2021-22 earnings forecast by 4% and 17%, respectively, to grow around 2% and 1% as revenue from sales this year will stabilize and will later fall 9% in 2022, and expenses for sales and operations will increase 5% and 3% amid Covid-19’s 3rd wave, before a profit takes leap growth in 2023.
As several new development projects are expected to complete and begin ownership transfer in 2023, together with current 12.8 billion baht backlog that will start to generate about 41%, 22% and 37% to NOBLE’s revenue between 2021-2023, DBSVS foresaw company’s earnings to grow by leaps and bounds in 2023.
In closing, DBSVS maintained a “BUY” recommendation on NOBLE with a target price of ฿9.74/share based on forward 2021 P/E at 7.0x due to high dividend yield at 10% and 9% in 2021-22. There are some events that could weigh on NOBLE including 1) further foreign asset acquisitions to strengthen company’s value and 2) the progress of AWC business collaborating with SAWAD’s subsidiary namely SWP Asset Management (SWP).