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PROPERTY
PORNNALAT PRACHYAKORN
M.K. Real Estate Development Plc plans to launch three to four low-rise projects worth a combined two billion baht next year to support its growth after the expiration of tax incentives next March.
Chutima Tangmatitham, assistant managing director, said that as demand for residential projects might decline after the end of government tax incentives, the company aimed to develop new projects to sustain its revenue.
M.K. has already bought some land plots and is negotiating to buy more for the new projects. It set 500 million baht as a budget for land purchases this year.
M.K. has a sales target of 2.7 billion baht this year, up 27.96% from 2.11 billion last year. Its confidence is underlined by first-half revenue of 1.48 billion baht, helped by the benefits from the government tax incentives and higher prices of housing units.
''The tax incentives helped improve demand for our residential projects in the first half as homebuyers got tax benefits,'' said Ms Chutima.
M.K. has a sales backlog of 1.6 billion baht, and about 1.4 billion is expected to be realised this year with 200 million baht to be realised in the first quarter next year.
The company plans to launch Chuan Chuen Modus Chaeng Watthana worth 965 million baht next month, the only new project for this year.
Revenue realised in the first half was 836 million baht, down 8% year-on-year, with net profit of 139.454 million, up from 124 million baht last year. The company hopes its net profit margin will increase to 20% this year compared to 16% last year.
Of the 17 ongoing projects, M.K. anticipates closing sales this year of three projects _ Chuan Chuen Regent, Chuan Chuen Pin Klao Ring Road and Chuan Chuen Udomsuk _ with a remaining combined value of 300 million baht. The three projects are worth a combined 1.845 billion baht.
Ms Chutima said the company was delaying its plan to develop condominiums due to strict environmental impact assessment rules, high costs of construction and land and lower margins when compared to that of low-rise projects.
The company raised prices of its projects by 3-5% earlier this month or about 50,000 to 80,000 baht a unit as its costs of production have gone up by 5-8%.
MK shares closed yesterday on the Stock Exchange of Thailand at 1.99 baht, down three satang, in trade worth 564,000 baht.
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