Introduction to WHA Corporation

WHA Corporation (WHA TB) stands as a leader in one-stop logistics services, covering four essential business hubs: logistics, industrial development, utilities and power, and digital platforms. As a key player in the real estate sector, WHA continues to focus on delivering innovative and strategic solutions for its clients while navigating the challenges of the market.

4Q24 Earnings Preview: A Snapshot

WHA Corporation’s 4Q24 earnings are projected to be Bt1.3 billion, reflecting a significant year-on-year (yoy) decline of 46% but an impressive quarter-on-quarter (qoq) growth of 184%. Revenue is expected to drop by 62% yoy, primarily due to a high base of land transfers in 4Q23. However, seasonal effects and the recognition of sales from investment properties have bolstered qoq performance.

The company’s gross profit, EBIT, and EBITDA are also expected to show notable qoq growth, though they remain significantly lower compared to the same period last year due to reduced land transfers and investment property sales. Despite this, the momentum in land sales is anticipated to pick up in 1Q25. Analysts maintain a “BUY” recommendation with a target price of Bt6.60, representing an upside potential of 36.9%.

Key Financial Metrics

Land Presales and Transfers Outlook

Land presales in 4Q24 are expected to reach 773 rai, a 7% yoy increase, driven by demand in consumer electronics, consumer products, and automobiles. For the full year 2024, WHA achieved land presales totaling 2,565 rai, a 7% decline yoy, primarily due to softer demand in Vietnam. However, the industrial estate business remains robust with higher average selling prices (ASPs).

Land transfers in 4Q24 amounted to 347 rai, a sharp 68% yoy decline but a significant 103% qoq increase due to seasonal factors. ASPs for land in 2024 averaged Bt4.5 million per rai in Thailand and Bt4.0 million per rai in Vietnam, with a projected 10% improvement for 2025.

Recurring Revenue Streams

WHA continues to demonstrate strength in its recurring revenue streams. The rental business is expected to report yoy and qoq growth, supported by larger leased areas, improved occupancy rates, and income from the green logistics business. Similarly, utilities and power revenues are predicted to rise, driven by strong water sales volumes.

Investment Property Sales

Revenue from investment properties is projected to decline yoy in 4Q24 but remain a notable contributor to overall performance. The company is expected to recognize approximately Bt1.0 billion in revenue from the sale of investment properties under the WHA Industrial Leasehold Real Estate Investment Trust.

Gross Margin and Earnings Revision

Gross margins remain strong due to higher ASPs and the absence of low-margin lands. However, 2024 earnings have been revised downward by 7.5% due to lower-than-expected revenue from fewer land transfers.

Valuation and Recommendations

WHA Corporation is valued using a Sum-of-the-Parts (SOTP) methodology. The investment in associate companies is valued at Bt1.45/share based on a 2025F PE of 13x, while its core business is valued at Bt5.10/share based on a 2025F PE of 18x. The target price is maintained at Bt6.60, with key catalysts including higher land sales, government stimulus for tourism, increased FDI, and advancements in the Eastern Economic Corridor project.

Environmental, Social, and Governance (ESG) Practices

WHA Corporation maintains strong ESG practices, achieving a CG Report score of 5 and a SET ESG Rating of AA. The company emphasizes sustainability in its operations, focusing on biodiversity, waste management, and resource conservation. Its workforce strategy aligns with the “Future of Work” vision, promoting inclusivity and adaptability. Governance principles are rooted in transparency, accountability, and fairness.

Conclusion

WHA Corporation remains a strong contender in the real estate and logistics sectors, backed by its diversified revenue streams and robust business model. While short-term challenges persist, the company’s strategic focus on high-margin opportunities and recurring revenue streams positions it well for future growth. Analysts recommend a “BUY” with a target price of Bt6.60, reflecting confidence in its long-term potential.