TTB Wealth cuts AWC's 2027-2029 profit forecasts by 18-13% after 48 billion baht asset sale

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Summary · why it matters

Analysts at TTB Wealth Securities have lowered their normalised profit forecasts for AWC by 18%, 14% and 13% for 2027-2029 after the company prepared to sell assets worth 48 billion baht, with a book value of 34 billion baht, into the AWC Lifestyle Properties real estate investment trust, or AWR, while investing 11 billion baht to hold a 28% stake in AWR. This will result in an extraordinary after-tax profit of 8 billion baht in 2027. The asset sale will cut total revenue forecasts from the hotel and commercial property businesses by 2.5-3.7 billion baht per year, with AWC set to earn management fees of 230-289 million baht per year, a share of profit from investments of 376-558 million baht per year, and interest savings of 330-583 million baht per year. The target price is therefore cut to 3.0 baht from 3.2 baht, split into 2.7 baht for the core hotel and commercial property business and 0.3 baht for the 28% stake in AWR, while the recommendation is maintained at "hold". AWC will set up a freehold REIT, aiming to list AWR on the stock exchange within the second quarter of 2027. AWR will issue up to 4.3 billion units at 10 baht per unit and borrow up to 18 billion baht to buy four hotels, namely Melia Koh Samui, Banyan Tree Samui, Banyan Tree Krabi and Pattaya Marriott Resort & Spa, as well as The Empire Bangkok, from AWC for at least 48 billion baht. AWC will lease the assets back to operate them and use part of the proceeds to buy the 28% stake in AWR, with the remainder used for its five-year investment plan worth 100 billion baht, debt repayment and dividend payments. Although this transaction will help reduce AWC's future debt burden, it will shrink its short-term profit base if AWC cannot quickly develop new assets that generate comparable profits to replace them.

Impact on assets 1

Real Estate▼
Asset World Corp Public Company Limited
AWC
▼ NegativeCapitalrelevance

TTB Wealth cut AWC's 2027-2029 profit forecasts by 18-13% and lowered its target price to 3.0 baht after the 48 billion baht asset sale into AWR.

Off-coverage companies 1

AWC Lifestyle Properties REITi
Private± MixedCapitalrelevance

AWR will issue up to 4.3 billion units at 10 baht and borrow up to 18 billion baht to buy five assets from AWC for at least 48 billion baht, with a planned Q2 2027 listing.