TRIS Rating Co., Ltd. has assigned the company rating of Hemaraj Land and Development PLC (Hemaraj) at "BBB+" with "stable" outlook. The rating reflects the company's proven record in industrial estate development, recurring income from utilities sales, and a satisfactory balance sheet. The rating also takes into consideration the fluctuation of industrial estate development, the company's diversification into the residential condominium market and substantial investments during the next 2-3 years.
The "stable" outlook reflects an expectation that Hemaraj will be able to maintain its strong position in industrial estate development to generate revenue from land sales and recurring income. Besides, the condominium project is expected to be completed and transferred to customers without a significant cost overrun and there are no unexpected capital expenditures other than those for completion of the condominium project and for industrial estate development. Though Hemaraj's leverage level may increase during the next 2-3 years due to its investment plan, the company is expected to maintain its debt-to-capitalization ratio not over 50% in the medium term.
TRIS Rating reported that Hemaraj is one of the leading industrial estate developers in Thailand. The company was originally established to complement the businesses of Horrungruang group which currently holds a 14.2% stake in Hemaraj. Currently, Hemaraj operates six industrial estate projects located in Rayong, Chonburi and Saraburi provinces. The total remaining salable area of approximately 10,000 rai is sufficient for future development given an average land sale of 500 rai per year during the last three years. For 2004 operations, revenue from industrial land sales accounted for 76% of total revenue while the remaining 24% came from utilities sales. Recurring income from utilities sales provides more reliable cash flow, enabling the company to withstand the fluctuations of industrial land sales. Hemaraj entered into residential market by launching its first high-end condominium project under "The Park" brand in February 2004. The project has received a good response from pre-sale customers, selling 60% of a total of 219 units as of June 2005 being favorable to budget and the construction is expected to be completed in the fourth quarter of 2006. However, the project is not completed, the success of the project remains to be seen. -- End
Hemaraj Land and Development PLC (Hemaraj) Company Rating: BBB+ Rating Outlook: Stable
The "stable" outlook reflects an expectation that Hemaraj will be able to maintain its strong position in industrial estate development to generate revenue from land sales and recurring income. Besides, the condominium project is expected to be completed and transferred to customers without a significant cost overrun and there are no unexpected capital expenditures other than those for completion of the condominium project and for industrial estate development. Though Hemaraj's leverage level may increase during the next 2-3 years due to its investment plan, the company is expected to maintain its debt-to-capitalization ratio not over 50% in the medium term.
TRIS Rating reported that Hemaraj is one of the leading industrial estate developers in Thailand. The company was originally established to complement the businesses of Horrungruang group which currently holds a 14.2% stake in Hemaraj. Currently, Hemaraj operates six industrial estate projects located in Rayong, Chonburi and Saraburi provinces. The total remaining salable area of approximately 10,000 rai is sufficient for future development given an average land sale of 500 rai per year during the last three years. For 2004 operations, revenue from industrial land sales accounted for 76% of total revenue while the remaining 24% came from utilities sales. Recurring income from utilities sales provides more reliable cash flow, enabling the company to withstand the fluctuations of industrial land sales. Hemaraj entered into residential market by launching its first high-end condominium project under "The Park" brand in February 2004. The project has received a good response from pre-sale customers, selling 60% of a total of 219 units as of June 2005 being favorable to budget and the construction is expected to be completed in the fourth quarter of 2006. However, the project is not completed, the success of the project remains to be seen. -- End
Hemaraj Land and Development PLC (Hemaraj) Company Rating: BBB+ Rating Outlook: Stable