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Published on April 9, 2008

Property developer Prinsiri is going through a rough patch. Three of its city condominium projects await environmental-impact-assessment (EIA) approval and its joint venture, Prinventure, has generated lower-than-expected returns.

"We expect our financial results this year to be lower than our estimated growth of 64 per cent. We'll have to adjust our growth forecast downwards to 10-20 per cent if we're unable to restart construction on three projects that are awaiting EIA approval from the Bangkok Metropolitan Administration. That is under consideration," said Pornprom Vongpivat, vice president for finance at Prinsiri.

Prinsiri is owned by the Kovitchindachai family. It develops low-rise and high-rise residential projects under the Prinsiri brand, single-detached houses under the Prinyada brand, townhouses under the Prinyaluk brand and condominiums under The Pulse, The Complete and Smart Condo brands.

So far, the company has developed 21 residential projects, 10 of which are for single-detached houses, seven for townhouses and four for condominiums.

Prinsiri has seen aggressive growth in the last two years, with between five and 10 residential projects launched each year. The company listed on the Stock Exchange of Thailand on November 5, 2005.

The company also expanded its scope by setting up Prinventure, a joint venture with Univentures, to develop residential projects in Bangkok. Prinventure is studying the Vietnamese market and expects to invest about Bt5 billion there.

Prinsiri is confident of expanding its business up to 50 per cent with the launch of six or seven residential projects with a cumulative worth of nearly Bt10 billion. It hopes to achieve a presales and revenue of Bt6.8 billion and Bt4.3 billion, respectively, this year.

The company recorded revenue of Bt2.61 billion last year, down 11.82 per cent from Bt2.96 billion in 2006. Net profit also fell sharply to Bt77.98 million last year from Bt447.8 million in 2006 due to a rise in the price of oil and construction materials.

This problem has had a negative effect on the company's brand image and may well affect sales of its others projects.

Perhaps consequently, Finansa Securities and Siam City Securities have recommended "sell" for company shares, with a target price Bt2.82 to Bt2.83 apiece.

However, three other brokerages - Tisco Securities, DBS Vickers Securities (Thailand) and United Securities - recommend "buy", with a target price of Bt3.40 to Bt3.76 apiece.

The brokerages believe Prinsiri will likely benefit from the government's tax package. They have also said the company's EIA problem is likely to make a low impact on its financial results.

Somluck Srimalee

The Nation