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Sansiri Plc (SIRI) plans to launch 15 new residential projects worth 15.3 billion baht to realise 17 billion baht in revenue by the end of 2008, said president Srettha Thavisin.
Regardless of the company's success in raising new capital this year, he said, it can invest in new developments as it has cash on hand of about 12 billion baht, a debt-to-equity ratio of one time and a sales backlog of 21.5 billion baht.
''We are waiting to increase our capital and always monitoring the market situation,'' he said. ''The increase will be very huge and cannot depend on domestic investment. We need overseas funds, but US sub-prime problems have worsened the world market.''
SIRI shares are currently trading at around 3.50 baht, lower than their par value of 4.28 baht. The shares closed yesterday on the Stock Exchange of Thailand at 3.44 baht, down two satang, in trade worth 72.21 million baht.
According to a plan announced last year, Sansiri aimed to almost triple its capital to 19 billion baht from 6.62 billion baht by issuing 1,473,000 new shares.
Mr Srettha said the company would spend 3.3 billion baht this year to acquire six to seven plots of land to develop new projects, which included five single-housing projects worth a combined six billion baht, six condominiums worth 5.8 billion baht and four townhouse projects worth 3.5 billion baht.
Sansiri planned to develop six projects comprising a condominium and five detached-housing estates worth a combined 7.5 billion baht while the rest would be developed by subsidiary Plus Property. Sansiri would raise its housing prices by about 5% in the second quarter due to higher construction costs.
''We will try to cap the housing prices as long as possible by reducing the company's expenses but will maintain our gross margin at 30%,'' he said.
He said the condominium market was very hot and that speculation had boosted prices by at least 5-10%. However, it tracked its customers' records at Siam Commercial Bank and Kasikornbank and found a low loan rejection rate.
''We offered discounts for customers who paid a down payment of up to 30%, 50% or 100%, and one-third of our customers chose the offer. This led to a low rejection rate,'' he said.
The company's strategy this year would focus on branding, keeping a low debt-to-equity ratio of below one to 1.2 times and reducing expenses.
If the new government wanted to boost the property market with tax incentives, Mr Srettha said, it should wait for three or four months, otherwise there would be delays in transferring units.
- Sansiri expects the property market this year will grow by 8-12%.
Mr Srettha said the company expected to realise five billion baht in revenue from new projects this year and another 12 billion baht from the current sales backlog of 21.5 billion baht. The rest would be realised in the next few years.
Sansiri targets pre-sales at 20 billion baht this year, the same as last year, with revenue realisation of 17 billion baht, up by 20% from 13.5 billion baht realised last year. About 30% of the 2007 revenue came from Plus Property.
Source : Bangkok Post (23 January 2008) |
