October 20, 2016 NOT RATED The Platinum Group (PLAT TB) Share Price: Bt6.20 Target Price: N/A Grand Bazaar of Thailand Equity Explorer Operates popular Fashion Mall in Thailand with 99% occupancy rate and one of the highest rents (Bt3,000/sq.m./month) Four projects to support earning growth from FY18 onwards; net leasable area will increase by 149% in FY18 and 43% in FY21 Stock offers attractive earnings growth (22% in FY18F) at 21x FY18F PE current valuation Plans to convert long-term rental contracts into short-term contracts at higher rents in 2021-22 PLAT owns and operates two shopping malls (The Platinum Fashion Mall and The Wharf Samui) and one hotel (Novotel Bangkok Pratunam). Currently, 70% of revenue come from The Platinum Fashion Mall, one of Thailand’s largest wholesale and retail fashion mall which sees 11mil Teerapol UDOMVEJ visitors per year. It has registered 99% occupancy rate over the last 5 662 - 659 7000 ext 5012 COMPANY RESEARCH | years and rent is relatively high at Bt3,000/sq.m./month (2Q16 average)
[email protected] vs Bt1,500 for CPN (NEUTRAL, TP Bt60). PLAT expects to raise rents by about 5% p.a. for short-term rental contracts. Organic growth will Key Data start from it converts long-term contracts expiring in 2021-2022 (account 12-mth High/Low (Bt) 7.15 / 4.86 for 42% of leasable area) into short-term contracts. Current rents for Market capital (Btm/US$m) 17,360.0 / 497.7 long-term contracts are Bt1,200-2,100, much lower than c.Bt4,000 for 3m avg Turnover (Btm/US$m) 24.6 / 0.7 short-term contracts.