KGI Securities noted in its report that Thailand’s property developers under their coverage delivered a weaker-than-expected financial performance in the first quarter of 2025. Combined net profit totaled THB 2.65 billion for the quarter, marking a decline of 33% year-on-year and 53% quarter-on-quarter—about 10% lower than earlier projections.
Firms primarily targeting the low- to mid-end segment, including LPN Development (LPN), Pruksa Holding (PSH), Origin Property (ORI) and Supalai (SPALI), posted lower-than-expected earnings, dragged down by disappointing revenue and softer profitability.
By contrast, results from AP Thailand (AP), Land and Houses (LH), Quality Houses (QH) were broadly in line with forecasts. The sector’s first-quarter earnings represent 15% of KGI’s full-year projection.
The analyst stated that April typically sees muted activity in the property sector due to the extended Songkran holiday, but this year’s slowdown was exacerbated by property damage caused by a major earthquake at the end of March.
Additionally, delays in sales and property transfers persisted as buyers and sellers awaited the implementation of the 100% loan-to-value program and the reduction in transfer and mortgage registration fees to 0.01%, measures set to take effect from May 1, 2025, through June 30, 2026.
Looking ahead, KGI foresees a modest recovery in sector earnings during 2Q25, underpinned by new condominium transfers and notable divestment gains. AP, ORI, and SPALI are expected to benefit from new condo transactions in the second half of 2Q25, while LH is anticipated to report additional gains related to the disposal of two U.S.-based apartments valued at THB 700 million before tax.
In contrast, earnings from LPN, PSH, and QH are likely to remain flat or shift marginally on a quarterly basis.
For the second half of 2025, Thai property developers are preparing an aggressive project launch to stimulate presales and earnings. The bulk of new condominium completions, and related revenue recognition, is set for the third and fourth quarters.
The analyst expressed optimism that further government incentives will help revive buyer sentiment and create positive momentum. Meanwhile, further divestment gains are also anticipated, with LH aiming to sell a U.S.-based apartment, and ORI expected to record proceeds from the sale of two joint-venture hotels and four warehouses.
Despite these efforts, sector-wide earnings are expected to contract for a third year running in 2025, with a projected 13% year-on-year drop, and only a modest 5% rebound forecast for 2026.
KGI maintains an ‘Underweight’ rating on the sector. AP, SPALI, and LH are rated ‘Neutral’, with target prices at THB 7.50, THB 14.60, and THB 4.40 per share, respectively. On the other hand, QH, LPN, PSH, and ORI are rated ‘Underperform’, with target prices at THB 1.32, THB 1.60, THB 3.80, and THB 1.42 per share, respectively.
Interim dividends on six-month earnings for SPALI and QH are expected to be announced and go ex-dividend in August. LH is anticipated to announce and distribute its interim dividends for nine-month earnings in November.
Additionally, most other developers are anticipated to declare final dividends in March or April of next year, with AP planning its final dividend payout in May 2026.
