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Published on April 9, 2008

KGI Securities said in a research report that the company planned to hold two HomePro Expos and six other activities a year.

Even if the local retailer of building and home products under the HomePro brand has to live with thin margins from its expo sales, it benefits from better brand awareness, which is a good strategy for boosting market share - now at 12 per cent - KGI said.

HomePro's revenues this year will increase to Bt17.7 billion from Bt17.01 billion last year, when it enjoyed a net profit of Bt710.37 million, the brokerage added.

The expansion of HomePro outlets into modern retailers like Big C is a good move because even though HomePro has marketing positioning as a home-decoration centre, it still lacks the ability to pull in more customers like it should.

HomePro's net profit this year will increase to Bt855 million as a result of its expansion, the recovery in consumption and the property stimulus package, said KGI.

Next year its net profit will rise 13.3 per cent from the opening of branches. As cash flow builds up, so should dividends. "It will pay a dividend of Bt0.20 a share this year and increase it to Bt0.25 next year," KGI said.

KGI suggests "buy" on the stock at Bt6.50 a share.

Kim Eng Securities expects HomePro's first-quarter net profit will rise by 12 per cent as a result of the expo held last month. The company will recognise Bt230 million in sales from the event in the first quarter and the remaining sales in this quarter after delivering products ordered at the expo.

Sales increased from previous fairs due to more commercial space and the pick-up in consumer confidence.

HomePro's net profit will ramp up by 11 per cent or Bt789 million from new branches and additions to its house brand portfolio, said Kim Eng.

The brokerage suggests "buy" at Bt6.10 per share.

United Securities has revised up its 2008 forecast for HomePro's sales growth per outlet from 2 per cent to 3 per cent as a result of the property package.

HomePro's revenue and net profit this year are expected to improve by 14.9 per cent to Bt18.32 billion and by 13 per cent to Bt803 million.

United Securities recommends "buy" at Bt7 a share.

The Nation