Chewathai, Thailand’s leading developer of residential properties and ready-built factories for rent, is ready to offer its IPO shares for subscription on 30 and 31 March at THB 1.60 each. The stock is expected to start trading on the MAI on 5 April, having appointed RHB Securities (Thailand) and KTB Securities its co-lead underwriters. The management revealed its plan to ensure steady and stable income by tapping its Singapore partner’s expertise that will allow it to build residential low-rises and commercial properties in addition to condominiums and ready-built factories, and to become an outstanding player in Asean’s property development market. They also noted that 321 units from five projects have been sold and are awaiting transfer completion and revenue generation in 2016 and 2017, which will further improve its performance.

On 29 March 2016, Chewathai Plc (MAI: CHEWA) held a signing ceremony for the appointment of RHB Securities (Thailand) PCL and KTB Securities (Thailand) Co Ltd as its joint-lead underwriters for the initial public offering (IPO) of its capital-increase shares.

Mr Ratachai Teratanavat, Managing Director, RHB Securities (Thailand) PCL, as Financial Advisor and a joint-lead underwriter, announced the decision for Chewathai to offer its IPO shares for subscription at THB 1.60 each on 30 and 31 March, and expected the first trading day on the Market for Alternative Investment (MAI) to take place on 5 April.

Chewathai will offer 262 million IPO shares, which after the IPO will represent 34.93% of its total issued and outstanding shares. Its current authorised capital stands at THB 750 million, divided into 750 million shares with a par value of THB 1 each, and its paid-up capital at THB 488 million. The funds raised from the IPO will be used to finance projects development and repay loans, and as working capital.

Chewathai specialises in development of both high-rise and low-rise condominium projects in key districts with convenient transportation in Greater Bangkok, especially along the main roads and current and future rail routes. It also looks keenly for opportunities to build projects in major provincial cities and tourist sites.

The company also provides ready-built factories for rent in major industrial estates, especially those in the Eastern Seaboard zone, satisfying the demand from both local and international industrial firms. The business is in the process of being promoted by Thailand’s Board of Investment, and such promotion will be beneficial to its lessees.

Mr Chartchai Panichewa Chewathai’s Chairman, said that TEE Development Pte Ltd, a subsidiary of the SGX-listed TEE Land Ltd, is Chewathai’s strategic partner, holding 49% equity in Chewathai and having expertise in construction technology and real estate marketing. The partner, he added, will help enhance Chewathai’s competitiveness in the areas of condominiums and commercial properties and elevate its status to a leading player in the ASEAN property development market.

“To ensure a steady revenue stream and sustainable growth in the long term, we have adopted a policy to offer a more diverse range of products, adding, for example, single homes, duplexes and townhouses, to our product portfolio. We also seek to reduce construction time and accelerate revenue recognition by acquiring ongoing projects from other developers. This too will help direct us towards sustainability”, he noted.

Mr Boon Choon Kiat, Chewathai’s Managing Director, stated that, as of 31 December 2015, the company had a total of eight ongoing and completed projects, seven of which were condominium projects worth THB 6.870 billion in aggregate: six were completed and on sale (THB 5.830 billion), i.e. Chewathai Ratchaprarop (325 units / 99% sold), The Surawong (52 units / 79% sold), Chewathai Ramkhamhaeng (535 units / 93% sold), Hallmark Ngamwongwan (792 units / 53% sold), Hallmark Chaengwattana (427 units / 52% sold) and Chewathai Interchange (279 units / 82% sold / situated in a new prime area in close proximity to the Taopoon interchange station of MRT Purple Line and Blue Line, and to the Bang Sue Grand Station); and one was during construction, i.e. Chewathai Residence Bang Pho (172 units / 20% sold / THB 120,000 per sq.m. on average / project value at THB 1.040 billion / only a 100m distance from the Bang Pho Blue Line MRT Station).

In addition, Chewathai has a ten-unit ready-built factory project on a 26-rai plot in Amata City industrial estate, Pluak Daeng District, Rayong Province, with a total leasable space of 17,120sq.m., worth approximately THB 300 million. Forty per cent of the factories in this completed project have been leased.

In 2015, Chewathai recorded a total revenue of THB 1,429.94 billion, up 217.8% from THB 449.81 million in 2014, and a net profit of THB 83.22 million, up 92.5% from THB 43.21 million in 2014. The exponential growth rates were attributed to increased sales revenue and completion of transfers of condominium units.

The company is confident of continuing impressive annual growth rates in 2016. The backlog as of 31 December 2015 stood at 321 units, worth a total of THB 949 million, from five projects, namely, Chewathai Ramkhamhaeng, Chewathai Interchange, Hallmark Chaengwattana, Hallmark Ngamwongwan and Chewathai Residence Bang Pho, and will be converted into revenue in 2016 and 2017. And 680 condominium units have been built and are currently available for sale, which will generate revenue immediately upon completion of sale and transfer.

According to Chewathai’s managing director, the company will commence three new low-rise housing and commercial property projects worth a total of THB 2.322 billion: Chewarom Residence (81 units of single homes and duplexes on a 15-rai plot on Soi Rangsit-Nakhon Nayok 7 (Rangsit Khlong 1), priced on average at THB 5.15 million per unit / project value at THB 488 million / expected to begin construction in Q2/2016 / will become the company’s first low-rise housing project); Chewathai Phetkasem 27 (a THB 1.659 billion condominium project currently in the design phase, 480m from the Bang Wa BTS skytrain station, expected to have up to 31 floors and 560 units on a four-rai plot, to be priced on average at THB 75,000 per sq.m. and to enter the construction phase in 2016); and the second ready-built factory project (four units on a 13-rai plot in Amata City industrial estate, with total leasable space of 9,100 sq.m. worth about THB 175 million in aggregate, expected to enter the construction phase in Q3/2016). These new projects, he said, will help Chewathai in receiving stable income.