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BANGKOK, Nov 6, 2018 – (ACN Newswire) – Chewathai PCL (SET: CHEWA) Managing Director, Boon Choon Kiat discusses the company's strategy and outlook in The Executive Talk (TET) by ShareInvestor.com.
TET: What is CHEWA's growth strategy?
We are very open to multiple avenues for growth, we will continue to organically grow our business with the expansion of residential projects for both high-rise and low-rise projects throughout Bangkok. Also, we have shown that we have grown up with the condominium project AQ Aria Asoke, and recently utilizing the joint venture structure on residential projects and hospitality projects. The reason we are open to these differences is because we have to remain flexible and able to grow.
TET: CHEWA's financial performance has been impressive. What are the reasons for this?
It is because of our strategy to focus on certain locations that are popular, where there is strong demand and where customers want to upgrade. In the first half of 2018 we achieved 1.4 billion baht in revenue with a 10% net profit and 20% to 2.4 billion baht. Through economies of scale, our net profit margin has grown from 7% -8% to 10%. Our backlog is 800 million baht and going forward we will launch an additional 10 projects. To ensure the long-term sustainability of the company, the company has a ratio of 1: 1 and raised 537 million baht. In addition to this we issued bonds of 1.7 billion baht during the year at attractive financing rates. The combination of these two gives us 2.2 billion baht of fresh capital to invest in new land plots to develop projects.
TET: When we last spoke, CHEWA was targeting to developing a balance between low and high rise and recurring income properties. How is this progressing?
We successfully sold out our first low rise project, Chewarom Rangsit Don Muang. It was a pilot project to learn the market, to create a name for ourselves. It is a 490 million baht project with 81 units and thus we have the steady absorption rate over 12 months for the project. Renewable energy projects will take place in the future. Because of the higher value of the condominium projects are 1 trillion baht or more than 6 million per hectare per project. JV projects for a total of 11.8 billion baht and we are also partnering in a senior living project at Kamala Beach with Nye Estate, LPN Development and CH Karnchang.
Lastly, we have factories for growing 1.5 billion baht business before potentially launching at REIT. This is still part of the plan and will take into account the potential of existing facilities and factories.
TET: There have been a recent change in the major shareholders. What are the reasons for this?
TEE Land which is a subsidiary of TEE Group Singapore and has been found to be in the business of investing in Singapore. They have been very good partners of CHEWA and voted in favor of May 2018. From CHEWA's viewpoint we are moving forward and seeing the potential in Thailand.
TET: What are your viewpoints on each segment of the real estate industry in Bangkok?
The real estate industry in Bangkok, Thailand is a very competitive industry with every developer today. In the past, it has been possible to have a high level of condominiums, and the landscape has changed. However, there is still a constant rate of growth and growth in both housing and condominiums. Both the macroeconomic and microeconomic indicators for Thailand are still positive, the ambience is positive, and the infrastructure projects that the government announced two to three years ago. We feel that the economy will continue for the next two years and that the government knows it is a key driver for the economy given the impact it has on employment, construction, and banking, so it is quite an exciting period for property.
TET: Where do you see CHEWA in five years from now?
Our focus is on a medium sized developer maintaining a revenue of $ 5 billion per year.
About The Executive Q & A Series
The Executive Q & A Series is presented by ShareInvestor, Asia's leading international financial media company and the largest investor relations network in the region. The interview was conducted by Pon Van Compernolle. For more information, email [email protected]. Website: www.ShareInvestorThailand.com
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