Date: October 25, 2024
Broker: UOB Kay Hian
Company Overview
Amata Corporation (AMATA TB) is Thailand’s leading industrial estate developer. It operates two industrial estates in Eastern Thailand—Amata Nakorn and Amata City—and one in Vietnam, Amata City Bien Hoa. The company focuses on providing industrial space solutions and supporting infrastructure to attract both local and international businesses.
Share Information
- Share Price: Bt27.00
- Target Price: Bt35.00 (previously Bt30.00)
- Upside Potential: +29.6%
- Market Capitalization: Bt31,050 million (US$921.9 million)
- Bloomberg Ticker: AMATA TB
- Shares Issued: 1,150 million
- 52-Week High/Low: Bt27.75/Bt20.10
Major Shareholders
- Mr. Vikrom Kromadit: 26.2%
- Thai NVDR: 5.3%
- Mr. Sirisak Sonsophon: 2.5%
3Q24 Results Preview
Amata Corporation is expected to report robust 3Q24 earnings with net profit surging to Bt942 million, reflecting an increase of 137.6% year-over-year (yoy) and 307.4% quarter-over-quarter (qoq). Key factors driving this growth include:
- Higher Revenue: Driven by increased land transfers, solid real estate sales, and strong demand from industrial clients.
- Gross Margin Improvement: Better product mix, particularly from high-margin land transfers at Amata City Chonburi.
- Share of Profit from Associates: Boosted by contributions from key partnerships.
Strong Performance Indicators
- Net Turnover: Expected at Bt4,056 million, up 42.9% yoy and 53.2% qoq.
- Gross Profit: Forecasted at Bt1,463 million, an increase of 51.0% yoy and 75.3% qoq.
- EBITDA: Projected at Bt943 million, showing growth of 19.9% yoy and 68.0% qoq.
- Net Profit Margin: Improved to 23.2%, reflecting efficient cost management and higher revenue streams.
Record-High Land Presales
The company achieved a record high in land presales, reaching 957 rai during 3Q24, an 83% increase yoy and 27% qoq. Notably, 9M24 land presales have already hit 2,000 rai, achieving 100% of its annual target. Consequently, Amata has revised its land presales target upwards to 2,500 rai for 2024.
Revenue Breakdown
- Real Estate Sales: Significant revenue boost from the completion of 452 rai in land transfers, marking an increase of 66% yoy and 177% qoq. Key areas include 51 rai in Chonburi, 311 rai in Rayong, and 90 rai in Vietnam.
- Utility Services: Revenue from this segment rose by 48% yoy and 5% qoq, primarily driven by the Vietnam market.
- Rental Business: Achieved a 15% yoy increase due to higher occupancy rates from new customers, remaining stable compared to the previous quarter.
Revised Earnings Forecast for 2024
UOB Kay Hian has revised its 2024 earnings forecast for Amata Corporation, projecting a 12% increase in expected earnings. This adjustment reflects higher revenue from increased land transfers and strong presales performance.
Valuation & Recommendation
- Recommendation: Maintain “BUY”
- Revised Target Price: Bt35.00 (previously Bt30.00)
- Valuation Methodology: Sum-of-the-Parts (SOTP)
- Investment in Associates: Valued at Bt8.5 per share, based on 2025 forecast PE of 13x, aligned with the power industry in Thailand.
- Core Business: Valued at Bt27.6 per share, using a PE of 18x, reflecting the positive outlook for the industrial estate sector.
Growth Catalysts
- Strong Demand from Chinese Clients: Continuing to drive sales in land and industrial services.
- New Electric Vehicle (EV) Players: Further boosts demand for industrial space, supporting the company’s growth trajectory.
- Foreign Direct Investment (FDI) in Thailand: Strengthening the industrial sector, which benefits Amata’s core business.
Environmental, Social, and Governance (ESG) Highlights
Amata Corporation emphasizes sustainability through:
- Environmental Stewardship: Implementing practices to reduce greenhouse gas emissions and increase carbon capture.
- Social Responsibility: Promoting positive impacts on the local economy by creating employment opportunities and supporting community well-being.
- Governance: Adhering to transparency, integrity, and compliance with local regulations, alongside strong corporate governance practices.
Conclusion
Amata Corporation continues to demonstrate strong financial performance with robust earnings growth, solid land presales, and favorable market conditions. The company remains well-positioned to capitalize on the increasing demand for industrial estate space, especially with the rise of new industrial sectors such as EV manufacturing. With a revised target price of Bt35.00, UOB Kay Hian maintains its “BUY” recommendation, reflecting confidence in Amata’s sustained growth and profitability outlook.
