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Supalai accelerates launch of B8bn plans

Bangkok Post Sept 4, 2009

The listed developer Supalai Plc will launch eight new projects worth 8 billion baht earlier than planned due to improving market sentiment, says its president.

The company previously launched two other projects earlier this year as it believed second-half performance be much stronger than in the first six months, said president Prateep Tangmatitham.

"This year will be better than last year, when oil and steel prices soared and there was a lack of labour, but there have been no problems this year," he said.

Thailand's volatile domestic politics remains a significant risk, however.

"The economy is more easy to predict as we can know the trend from interest rates, oil and steel prices. We have a better chance of making the right forecast."

Despite a hiccup in January and April, the company's plan remains the same. In the first half of the year, it launched four new projects and will launch eight new projects in the second half, he said.

"We didn't feel any crisis or economic recession," said Mr Prateep, adding the 40-50 million baht worth of units sold in projects launched in the first half had now risen to 200 million.

As of the end of August, Supalai recorded 7 billion baht in presales. Monthly sales rose to one billion baht in July and 1.5 billion in August. The company expects to exceed its 10-billion-baht target for the year.

The company is confident it can achieve a high gross margin by controlling sales and administrative expenses at only 6%, due to its low cost of land and efficient overhead costs.

The overall residential market is still in a slump but sales of the top five listed developers outperformed 2008 levels. While small and medium-sized developers have faded, large listed developers remained upbeat, he said.

Financial support from banks was a major factor shoring up the sector. Most of them classified major developers as "preferred developers". These developers receive good support, better conditions, competitive interest rates and post finance for their customers, he said.

Supalai shares (SPALI) closed yesterday on the Stock Exchange of Thailand at 4.76 baht, up 16 satang, in trade worth 97.9 million baht.