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UPDATE 1-Thai SC Asset targets robust revenue growth on luxury home demand
May 14, 2015 / 8:47 AM / 3 years ago

UPDATE 1-Thai SC Asset targets robust revenue growth on luxury home demand

* Aims for revenue of 20 bln baht in 2019 vs 13.9 bln in 2015

* Rejection rate climbs to 7-8 pct, improvement expected (Recasts and adds comments on long term outlook)

By Khettiya Jittapong

BANGKOK, May 14 (Reuters) - Thai property developer SC Asset Corporation Pcl said it is aiming for revenue growth of at least 10 percent a year over the next five years, banking on strong demand for luxury homes.

SC Asset, 60 percent owned by the family of ousted former Prime Minister Thaksin Shinawatra, is targeting revenue of 20 billion baht ($600 million) in 2019, up from its goal of 13.9 billion baht this year.

Chief Executive Nuttaphong Kunakornwong also said the company hopes that profit growth will outpace climbs in revenue.

The bullish outlook comes after the firm on Wednesday reported a 38 percent rise in first-quarter revenue and a jump in net profit of 80 percent.

Nattaphong, Thaksin’s son-in-law who came to the helm in January, said SC Asset has seen its rejection rate, or the rate at which banks refuse loans for home buyers, rise to 7-8 percent from around 5-6 percent a year earlier. But he added that it was still lower than the overall industry.

“What’s challenging this year is rising household debt,” he said, adding that the rejection rate should improve later in the year as the pace of growth in household debt slows and the company undertakes risk management measures.

Thai household debt at record 85.9 percent of GDP helped cause a spike in bad loans last quarter, causing banks to become more cautious about extending loans.

But Nattaphong added that the rejection rate for luxury homes was zero. SC Asset is the sector leader in luxury houses priced at more than 10 million baht with an estimated market share of around 30 percent.

The company plans to launch seven new projects with a combined value of 14 billion baht this year, including high-end condominiums in prime locations in Bangkok. ($1 = 33.47 baht) (Reporting by Khettiya Jittapong; Editing by Edwina Gibbs)

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