Asia Wealth Securities (AWS) has given a “BUY” recommendation on Noble Development Public Company Limited (NOBLE) with a target price at ฿9.90/share on the hopes of 2H21 recovery.
AWS estimated NOBLE’s 2Q21 earnings at 297 million baht, representing a decrease by 2% YoY and 39% QoQ due to 1) lower revenue, 2) lower gross profit margin, 3) an increase in SG&A. If the earnings in 2Q is in line with the analysis, NOBLE will record 1H21 earnings at 781 million baht, which is 42% of AWS’ whole year estimate in 2021.
Presales in 2Q21 are expected to decline by 37% QoQ to 1,700 million baht due to the Covid-19 situation and the postponement of two projects to open in 2H21. In the meantime, 40% of the presales in 2Q21 was from foreigners, which is considerably quite high, reflecting NOBLE’s position as the leader in the overseas market.
However, AWS estimated presales in 2021 at 10-12 billion baht, which is lower than NOBLE’s target at 16 billion baht. The lower presales is a result of Covid-19 outbreak and the postponement of project opening.
Even with a slowdown in 2Q21 estimate, AWS expected 2H21 revenue to recover, supported by its backlog and the project completion in 1H21, while the Covid-19 situation should relax and lead to a reopening. These would contribute to NOBLE’s upside this year. In addition, AWS estimated NOBLE to offer a Bt0.35 dividend per share in 1H21, representing 5% dividend yield.