PREB Shapes Up to Add More Value in Property Business
PREB is shaping up its structure to strengthen the property business with the know-how from contractor business and the JV with CHAYO.
Pre-Built Public Company Limited (PREB) is a security that is off investors’ radar due to low stock’s liquidity and no significant development in the business, resulting in a dull trading session in the past.
Upon taking a look at PREB’s fundamentals, it turns out to be quite good. The company records consecutive net profit each year. PREB had 57 million baht of net profit in 1Q21, an increase from 40 million baht in the same period last year.
At the end of the first quarter of 2021, PREB had assets worth 6,039 million baht and liabilities of 3,790 million baht. Meanwhile, cash and cash equivalent was 606 million baht and unappropriated retained earnings was 1,618 million baht.
More importantly, PREB constantly handed out a dividend payment with a dividend yield around 9-10% per year, which could be a perfect opportunity for investors aiming for long-term investments.
Originally, PREB grew from a construction business, being one of the contractors in the Thai stock market. However, at the risk of being too dependent on others, the company diversified to new businesses. With its know-how in construction, the company shifted its structure from being a creator to a seller in property business instead. PREB took advantage of being a contractor, which caused the company to maintain its cost at a minimum compared to other property businesses.
Nevertheless, the income ratio from selling property is still considerably small, compared to its core business as a contractor.
In the meantime, the company joined hands with Chayo Group Public Company Limited (CHAYO) by holding a 5% stake in CHAYO’s asset management company, Chayo JV Asset Management Co.,Ltd., which could result in an opportunity to acquire vacant land, house or condominium at a cheaper price.
The good thing is that some projects might not need to start from scratch and could continue or develop existing projects, which could be a huge advantage on the company’s costs and margin.
This could be one of the pivotal points in strengthening PREB’s portfolio in the property business.