Sansiri trims launches, looks local
SET-listed developer Sansiri Plc is slowing launches by 10-20% to 18 projects worth a combined 24 billion baht this year as it bets on local customers while waiting for Chinese buyers to come back.
The company projects presales growth of 40% to 29 billion baht this year.
Chief financial officer Wanchak Buranasiri said the number and value of new projects being launched this year will drop from 20 projects worth a total of 30 billion baht in 2019.
"The lower number is in line with the market," he said. "Once the market picks up, we have many plots in the pipeline to launch additional projects. But the global and local economies continue to look sluggish."
The value of new projects is 20% lower as Sansiri scales down the size to minimise risk. New projects this year will focus on low-rise houses, accounting for 63% of the total.
Sansiri recorded 21 billion baht in presales last year, down from 48.5 billion in 2018.
It posted 2.4 billion baht in net profit last year, up from 2 billion in 2018, but revenue declined to 26.3 billion from 27.1 billion.
The company had a sales backlog of 47.5 billion baht, which comprised 31.5 billion from joint venture projects with BTS Group Holdings Plc, with the rest from its own investment.
Of total presales last year, 3 billion baht was from foreign buyers, which shrank from 14 billion in 2018 as Chinese buyers decreased from half the total foreign market after the trade war.
"Chinese buyers will return as Thailand's medical system is one of the best. Thais are also friendly to Chinese," said chief operating officer Uthai Uthaisangsuk.
He said the new projects this year will comprise six single detached house projects worth 8.6 billion baht, six projects with a mix of residential products worth 6.6 billion, and six condo projects worth 8.8 billion.
One of the new condo projects is a joint venture with BTS Group Holdings. Both have eight land plots to develop new condo projects in the future. Since 2015, they have developed 16 joint venture condo projects worth a combined 50 billion baht.
The company will focus on real demand and mass market segments with affordable prices from 1.6 to 5 million baht per unit, Mr Uthai said.
To control costs, it will use more precast pieces produced by its factories. Last week a second factory was completed and will boost total production capacity from 700,000 square metres or 2,000 units to 1.2 million sq m or 3,500 units per year.
As of last year, Sansiri had unsold completed condo units worth 12 billion baht, expecting to sell 6-7 billion this year. It projects eight condos worth a combined 25 billion baht to be completed in 2020.