Lalin Property to launch 9 11 new projects in 2020, expecting 13% growth, with 6.2 bn baht sales and 5.25 bn baht revenue recognition, paving the way to be the horizontal housing property market leader.

Event Calendar Press Releases Monday January 6, 2020 13:25
Bangkok--6 Jan--4D Communications

Lalin Property announces its 2020 business plan, aiming to grow beyond the industry's average performance for the 5 th consecutive year, with a new focus on 'real demand' in the horizontal housing property market. The company prepares to launch 9 – 11 new projects with a total value of over 5 – 5.5 billion baht and soar as the 'National Housing Company' and the leader of the horizontal housing property in the price range of 2 – 6 million baht. The sales target in 2020 is set at 6.2 billion baht with a revenue recognition of 5.25 billion baht, or a 13% growth from the previous year.

Concerning the performance in 2019, despite an unfavorable situation of the real estate market, negative factors, and the economic slowdown which resulted in lower earnings for most companies in the market, Lalin Property was still able to fulfil its goals as one of the few companies with rising revenue recognitions. For the entire 2019, Lalin achieved the revenue recognition of approximately 4.64 billion baht, a 13.2% increase from the year before.

Mr. Chaiyan Chakarakul, CEO of Lalin Property PLC., real estate developer for over 30 years, shared his perspective on the overall situation of the residential property market in Thailand in 2019 that the market, especially that of the vertical housing property, had been sluggish due to the influence of the global economy, the declining Thailand's economy, high level of household debts, and the LTV measure issued by the Bank of Thailand to reduce speculation in the property market. These factors negatively affected the vertical market of which demand was from investors and speculators more harshly than the horizontal market. However, Lalin has always been assessing the market and has long foreseen this risk. The company, therefore, stopped developing condominium projects 2 years ago and is now focusing on horizontal projects which are a source of real demand. This timely adaptation allows the company to be able to grow amid the stagnant real estate market.

In 2020, it is expected that the overall national economy will expand roughly by the same level as in 2019 or slightly better, or plus or minus 3%. The supporting factors are the stable low interest rate, a larger volume of government investment in 2020 after the delay in 2019, various measures to stimulate the property market, and policies to encourage Thai people to have their own residences by offering low-interest loans from the government banks. Hopefully, these factors will improve the Thai residential property market in the first quarter of 2020 while the entrepreneurs themselves will also stimulate purchase through intensive marketing activities. It is estimated that the horizontal real estate market in 2020 will grow by 2-4%.

The company's business direction in 2020 will focus on the 'real demand' residential horizontal market with plans to launch more projects in new high potential locations and to replace the existing projects that will be gradually closed down. In 2020, 9 – 11 new projects will be established with a total value of 5 – 5.5 billion baht, a sales target of 6.2 billion baht, and a revenue recognition at 5.25 billion baht, or a 13% growth from 2019.

Mr. Churat Chakarakul, Deputy Managing Director, Lalin PLC., revealed some information on the marketing plan. "This year, Lalin Property will take a proactive strategy to demonstrate our ability as the leader of sustainable property developers for over 30 years. We will build a solid growth potential and become the 'National Housing Company.' When talking about low-rise housing in the price range of 2 – 6 million baht, Lalin must be among the top 3 brands in the consumers' mind.

With marketing budget of around 3-4%, this year, Lalin will implement the lifestyle marketing strategy to communicate with both old and new customers in order to precisely reach the right targets, create brand loyalty, build confidence in all dimensions, and generate word of mouth. Digital marketing as well as big data will be used to analyze and find customer insight. The proactive CRM system or 'Lalin 4.0 Connection' will open a channel for customers to receive news and information and have a quick two-way communicate with Lalin. These are the extension of the Lalin's quality of living standard.

With regards to financial status, the company has set a land acquisition budget at around 1 – 1.2 billion baht. The sources of budget are cash flow from the business operation and the company's accumulated profits. The working capital, aside from the cash flow, will come from the issuance of debentures and short-term loans from financial institutions which will grant loans in the amount and timing deemed appropriate for business expansion and long-term growth. The D/E ratio of the company is currently around 0.8 times, much lower than the industry's average of around 1.4 times. This figure reflects a low financial risk and a high potential of business expansion with no worry about the sources of fund."

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