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TRIS Rating Co., Ltd. has affirmed the company rating of Preuksa Real Estate Co., Ltd. (PREUKSA) as well as the ratings of its Bt500 million senior debentures (PS069A) and its Bt220 million bills of exchange at "BBB". The ratings reflect the company's strong position in the low-priced residential market and its competitive construction cost. These strengths are partially offset by PREUKSA's higher financial leverage, which is the result of the company's aggressive expansion and its investment in a pre-cast factory, intensified competition in the single detached house (SDH) market and the cyclical nature of the residential property sector.
While the "stable" outlook reflects TRIS Rating's expectation that PREUKSA will continue to maintain its solid position in the low- to medium-income residential market. The new pre-cast factory is expected to strengthen its competitive advantage in managing the construction process and should alleviate the increasing pressure from rising trends in interest rates, oil prices and construction material costs.
TRIS Rating reported that the low cost of construction from its prefabrication technique and large scale production has made PREUKSA a market leader in the low-income townhouse market and it subsequently expanded into the SDH market to target upper income customer. For 2004 operations, the company continued to enjoy favorable profit margins, albeit at a decreasing rate. The Bt600 million investment in its new pre-cast factory will enable the company to build up to 3,600 SDH units a year. In 2005, PREUKSA plans to refocus more on low-cost housing by introducing housing priced less than Bt2 million and re-branding 'Baan Passorn' to create more awareness of its SDH products.-- End
Preuksa Real Estate Co., Ltd. (PREUKSA) Company Rating: BBB Issue Ratings: PS069A: Bt500 million senior debentures due 2006 BBB Bt120 million bills of exchange due 2005 BBB Bt100 million bills of exchange due 2007 BBB Rating Outlook: Stable
While the "stable" outlook reflects TRIS Rating's expectation that PREUKSA will continue to maintain its solid position in the low- to medium-income residential market. The new pre-cast factory is expected to strengthen its competitive advantage in managing the construction process and should alleviate the increasing pressure from rising trends in interest rates, oil prices and construction material costs.
TRIS Rating reported that the low cost of construction from its prefabrication technique and large scale production has made PREUKSA a market leader in the low-income townhouse market and it subsequently expanded into the SDH market to target upper income customer. For 2004 operations, the company continued to enjoy favorable profit margins, albeit at a decreasing rate. The Bt600 million investment in its new pre-cast factory will enable the company to build up to 3,600 SDH units a year. In 2005, PREUKSA plans to refocus more on low-cost housing by introducing housing priced less than Bt2 million and re-branding 'Baan Passorn' to create more awareness of its SDH products.-- End
Preuksa Real Estate Co., Ltd. (PREUKSA) Company Rating: BBB Issue Ratings: PS069A: Bt500 million senior debentures due 2006 BBB Bt120 million bills of exchange due 2005 BBB Bt100 million bills of exchange due 2007 BBB Rating Outlook: Stable