Central Pattana (CPN)
reported 4Q02 results of Bt101mn, bringing 2002 earnings to
Bt948mn, slightly better than expected. CPN's 4Q02 earnings
dropped 48% qoq on the back of narrowing margin to 49.6% and
a jump in selling and administration expenses by 209% qoq.
This was expected due to pre-operation costs and promotion
expenses from the opening of Central Rama II in December.
Full-year normalised profit,
excluding extra losses and one-time gain from debt
restructuring of CPN’s subsidiary, surged 30% from 2001.
Rental and service income as well as food and beverage
income rose 24% and 8%, respectively, due partly to full
contribution from Central Bangna after CPN increased its
stake from 20% to 99% since September 2001. Central Pattaya
and Central Airport Plaza Chiang Mai should also have higher
occupancy rates.
CPN delivered ROE of 16% with
operating cash flow of Bt1,981mn or Bt9.9/share. The
company’s net to equity ratio increased from 0.69x to
1.06x even with the open of two new shopping centers.
CPN is projected to post
strong growth in 2003 as a result of full-year contributions
from Central Rama II and introduction of Central Chiang Mai
Phase 2B in the middle of this year.
The stock currently trades at
attractive 2003 PER of 3.7x which offers 44% upside to our
fair value estimate of Bt36.25. We’re maintaining a BUY
rating on CPN.
