Reuters: Hot Stocks: STOCKS NEWS THAILAND-Nomura starts Thai property with 'bullish'

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STOCKS NEWS THAILAND-Nomura starts Thai property with 'bullish' Oct 24th 2012, 04:41 Wed Oct 24, 2012 12:41am EDT Nomura initiated coverage of Thailand residential property sector with a 'bullish' stance, driven by expanding infrastructure and a supportive macroeconomic environment. The broker preferred landed property and low-rise developers over condominium developers as infrastructure expansion and a new city plan for Bangkok aiming to spur development outside the city centre would prove to be more beneficial to landed properties, it said in a report. Nomura expected strong earnings growth in 2013 for Pruksa Real Estate Pcl and Quality Houses Pcl, saying that they now traded at inexpensive valuations. "We are more bullish on low-rise developers than consensus. Our 2013-14 earnings forecast for our top picks Pruksa and Quality Houses are around 20-30 percent above consensus," the broker said in its "Thailand residential property" report on Thursday. It rated Land and Houses Pcl, the biggest housing developer, 'neutral' because of its high valuation. The stock is trading at 2013 forecast P/E of 17 times, a premium to both its peers average of 9 times and historical average of 15 times. Pruksa and Quality Houses traded at less expensive valuations, with 2013 forecast P/E of 8 times and 9 times respectively, and 2013 earnings growth potential of 30-39 percent while Land & Houses would see lower 2013 earnings growth of 18 percent, it said. The property subindex edged up 0.4 percent versus a 0.36 percent fall of the benchmark SET index. The property subindex has risen 63.8 percent so far this year, outperforming a 27.4 percent gain of the SET index. Pruksa is up 78.5 percent this year, followed by a 58.5 percent gain of Quality Houses and 42.3 percent gain of Land & Houses. 1117 (0417 GMT) (Reporting by Viparat Jantraprap in Bangkok; viparat.jantraprapaweth@thomsonreuters.com); Editing by Jijo Jacob Link this Share this Digg this Email Reprints

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