A Smart Escape Route of ANAN amid Business Slowdown

Ananda Development Public Company Limited (ANAN), a property development company, is now on the path to focus more on creating recurring income just like what other property development company such as M.K. Real Estate Development Public Company Limited (MK), NUSA, PSH or RML are doing.

While other companies in the sector focus on creating recurring income from Health & Wellbeing business, ANAN is still somewhat in the same business field as the company decides to put its effort on developing serviced apartments, located on four strategic locations in central Bangkok which are Ratchadapisek, Sathorn, Sukhumvit Soi 59, and Sukhumvit Soi 8. The total value of these projects is THB 3,173 million.

This is ANAN’s first step to create a real and solid recurring income.

 

Moreover, ANAN had acquired 5% or 42,500,000 shares in Dusit Thani Public Company Limited (DTC) on February 5, 2019, from CPN.

At first, ANAN may only receive dividend yield from DTC, but in the long run, it will create a synergy for both companies. For example, if DTC has any plan for new hotels, ANAN can personally take the job in construction and interior design, seeing that the company may have more advantages over DTC as one of Thailand’s biggest property developers. Another point of ANAN’s advantage is valuable data of high-end customers that the company has from running a condominium branded Ashton for high-end customers.

It can be said that the acquisition of DTC’s shares is like killing two birds with one stone!

 

Some people may be curious about ANAN’s decision on creating recurring income as ANAN still outperforms other property developers as well as having more profit in each year. Looking back in 2015, ANAN booked THB 1,206 million of profit from THB 11,025 million in revenue. In 2016, the company recorded THB 1,501 million of profit from THB 12,345 million in revenue, and THB 1,328 million of profit in 2017 from THB 12,950 in revenue.

More importantly, ANAN reported a THB 1,708 million of profit with just only 9 months of operation in 2018 from THB 9,398 million in revenue.

 

However, let’s not forget that real estate business is stepping closer to a slowdown state, which means that anything can happen from now on. Perhaps, this year or the next year, ANAN’s house and condominium sales may go down unexpectedly. No one ever really knows for certain.

Amid this kind of uncertainty, it is wise of ANAN to take the initiative on adjusting its business before the time comes.
Many believe that from now on, ANAN will come up with more projects to boost its recurring income, and other property developers will do the same in order to escape from the possible business slowdown in real estate.