Amata Corporation PCL (AMATA), a leading industrial city developer, revealed that the company still maintains its target for 2020 at 950 rai of land sales. Land transfer revenue also accounted for 60-70 per cent of the backlog at the end of 2019 which amounted to 2.58 billion baht.
The company expects a land sale of 950 rai by the end of 2020, including 200 rai from Amata City Chonburi, 450 rai from Amata City Rayong and 300 rai from Thai-Chinese Rayong Industrial Zone.
In the first half of 2020, only 116 rai of land could be sold mostly in Thai-Chinese estates in the amount of 82-83 rai coupled with 187 rai of land transfer.
Viboon Kromadit, the Amata executive director and chief marketing officer, said that “although the first half of the year, there wasn’t much progress, we expect to see a surge in the third and fourth quarter of 2020 when foreign investors would gradually travel to Thailand.”
Meanwhile, the company is initially in the process of negotiating with B.Grimm Power PCL (BGRIM) and PTT as power plant co-developers.
Industrial city amid the outbreak
AMATA gained 437.9 million baht in the first six months of the year, down 36.8 per cent year-on-year in the first half of 2020. Gross income stood at 2.22 billion baht, a decrease of 6.2 per cent.
The backlog at the end of June 2020 is approximately 2.16 billion baht.
In 2019, AMATA had a gross income of 6.23 billion baht and a net profit of 1.74 billion baht, with land sales of 867 rai and land transfer of 648 rai.
To cope with the COVID-19 impact, the company has managed to reduce cost and operating expenses by more than 30 per cent.
Investment budgets were used by 2.4 billion baht from the yearly budget of 5 billion, along with a 20 per cent rent cut to help existing customers.
The outbreak situation has made the company concentrate more on online sales platforms but the progress is limited as investors would prefer to see the land themselves.
The development, therefore, will rely on the possibility of a second-wave of COVID-19 in Thailand, which is key to whether foreign investors will be allowed to enter Thailand.
As for the current political movements, AMATA said the demonstration can be operated in a proper way but it must not be violent. They do not believe it will affect the confidence of foreigners.
Most of AMATA’s customers are from China (70-80 per cent) and the rest are from Japan, Europe and other countries.
Oversea operations
AMATA is now planning to develop the Amata Taipei Smart City project as Taiwan is another country with great advances in technological products and could attract more investors to Thailand.
Viboon said that the overseas development in Vietnam was going according to plan with around 10 hectares of land sales. They are also still in negotiations with interested investors.
Meanwhile, in Myanmar, the Yangon Amata Smart & Eco City (YASEC) project has now been fully licensed and is in the negotiating process with customers from Thailand, China and Japan.
Trinity Securities
Amata came out with a better-than-estimated net profit in the second quarter of 2020, exceeding KGI securities’ expectation by 86 per cent but below Bloomberg’s consensus by 11 per cent.
KGI maintains its 2020-21 earnings forecasts due to the risk from the ongoing COVID-19 pandemic which could lead to delayed business activity. The land sales assumption stood at 300 rai and land transfer at 387 rai.
According to KGI, AMATA’s share has been rated ‘Neutral’ with a target price of 15 baht till the end of 2021. AMATA shares were at 13.20 baht per share on Wednesday morning, rising up to 0.20 baht or +1.54 per cent.
