We estimate 3Q24 net profit at Bt1.17bn (-24.8% YoY and -15.6% QoQ) with lower revenue and a narrowed gross margin from promotional pricing; JV contribution will jump 170% YoY and 102% QoQ. This would bring 9M24F net profit to Bt3.87bn (-18.6% YoY). Backlog awaiting transfer plus new sales will grow 4Q24F core profit QoQ (extra gain not included). We stay Outperform with a 2025 TP of Bt2.14sh (7.1x PE, +0.25S.D. over 18-year PE).
Research
SIRI - Preview 3Q24: Weak with no extra gain
9M24 resales at 68% of 2024 target. SIRI reported 3Q24 presales of Bt10.3bn
(-36% YoY but +3% QoQ), 58% low-rise and 42% condos. Low-rise value in 3Q24 was up 34% YoY but slipped 10%, while condo value grew 61% YoY and 6% QoQ. In 3Q24 SIRI launched eight projects, seven condos valued at Bt6.45bn and one Bt2.3bn low rise. 9M24 presales came to Bt30.5bn (+19% YoY), reaching 68% of its 2024 target of Bt45bn (+20% YoY). Bt8bn in launches were delayed from 3Q24 and will mostly be put on the market in 4Q24, pushing 4Q24 launches to Bt30bn. We assume that SIRI will put off some projects to 2025 and will have presales of Bt42.5bn (+13% YoY), missing its 2024 presales target by 5%. New launches will be in the range of Bt45-50bn well below 2023’s record high of Bt65bn.
3Q24 net profit to slip YoY and QoQ. We forecast SIRI’s 3Q24F net profit at Bt1.17bn (-24.8% YoY and -15.6% QoQ) on revenue of Bt9.07bn (-2.8%YoY and
-2.4%QoQ) with six condos starting transfers in the quarter. However, promotional pricing intensified in 3Q24, narrowing average gross margin to 29.6% from 31% in 3Q23 and 31.4% in 2Q24. We expect high contribution from the JV at Bt447mn (+170% YoY and +102% QoQ) backed by continued transfers of both low rise and condo projects. Meeting our 3Q24F would bring 9M24 net profit to Bt3.87bn (-18.6%).
Maintain 2024 and 2025 forecasts, with better 4Q24. We maintain our 2024 revenue forecast of Bt41bn (+11%) with net profit of Bt5.1bn (-15.8%). This implies growth in 4Q24F core profit QoQ (flat YoY) on backlog recognition. In 2025F, we expect SIRI to aim for higher presales and revenue growth, backed by new project launches and transfers, especially from mega project “10 Ease”.
Extra gain to be booked from 4Q24. SIRI has announced the sale of its entire 71% equity interest in “The Standard International Holdings” to Hyatt Corporation and Hyatt International Corporation. Return will be divided into four parts: upfront, earnout, earnout bonus and brand and license fee. The deal closed on October 2, meaning SIRI will book a gain in 4Q24 from two of the four parts: upfront gain and partial earnout; the remainder will be booked over the next three years. We see this as positive, as the extra gain will support financial strength while removing the hotel business, often a drag, off the books.
Key risks are inventory and cash flow management. Key ESG risks are the environmental (E) issue about using sustainable products and governance (G), as it has no female directors.