Tuesday, September 2nd, 2025

Quality Houses Faces Earnings Pressure in 3Q24 Amid Limited Project Launches and Weak Presales

Date: October 29, 2024
Broker: UOB Kay Hian


3Q24 Earnings Performance

Quality Houses (QH) is projected to post a net profit of Bt582 million for the third quarter of 2024, reflecting an 8% year-on-year (yoy) decrease and a 6% quarter-on-quarter (qoq) decline. This drop in earnings is primarily driven by reduced transfer volumes, which are impacted by weak presales and a limited number of new project launches during the quarter.

Residential Gross Margin and Promotional Campaigns

QH’s residential gross margin is anticipated to decrease yoy and remain flat qoq, influenced by ongoing promotional campaigns. These campaigns, while necessary for maintaining sales momentum in a competitive market, have placed pressure on margins, contributing to the overall earnings decline.

Presales and Transfer Volume Challenges

Presales for QH were constrained in 3Q24, with the company not introducing any new low-rise projects. This lack of fresh developments has led to weaker presales, further limiting the volume of transfers. However, QH achieved additional sales of nearly Bt200 million through three units at its Q-Sukhumvit project, although not all units are expected to be transferred within the quarter.

Sector Context and Market Weight

In its analysis of the Thai property sector, UOB Kay Hian maintains a “Market Weight” stance, reflecting caution in a market with subdued consumer confidence and economic uncertainties. QH’s performance aligns with the broader sector challenges, as restricted purchasing power and limited new project activity continue to impact revenue growth.

Risks and Market Considerations

QH faces key risks in the form of prolonged promotional campaigns, which could further strain gross margins if continued. Additionally, the lack of new project launches may limit QH’s ability to expand its transfer volumes in the near term. The tightening of bank lending policies and elevated costs are additional factors that could pose challenges to QH’s growth trajectory in an uncertain market landscape.

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