The price of shares in newly-listed Pace Development has dropped more than 44 percent since its debut on the Stock Exchange of Thailand on August 7.
A total of 600 million shares were sold at THB3.50 per share as part of the luxury developer’s Initial Public Offering (IPO) earlier this month. The share price stood at THB1.93 at the close of trading yesterday (August 19).
Dr. Kongkiat Opaswongkarn, Executive Chairman of Asia Plus Securities on behalf of the lead underwriter of the IPO, had previously said the company has received a warm welcome from investors, adding that his company was projecting a target price of THB5.20. He was subsequently quoted in local media that political uncertainties along with gloomy global market sentiment were also factors that dampened interest.
Asia Plus Securities did not respond to a request for comment about the drop in share price when contacted by DDproperty.com yesterday.
In a note to investors earlier this month, CIMB Thailand predicted that the developer’s net profits could drop as a result of a reduce backlog of units to sell ahead of the completion of its MahaNakorn project in 2015.
In a statement to the Stock Exchange of Thailand on August 14, Pace reported that its operating results for the three-month period ended 30 June 2013 showed a loss of THB83.77 million baht. This compared to the same three-month period ending 30 June, 2012, when the company recorded a profit of THB5.05 million.
The change, according to the company, was attributed to a decrease in revenue from the sale of residential condominium units and furniture decreased.
The transfer of units in its Saladaeng Residences, now almost complete, also contributed less profit, while sales expenses increased from THB17.09 million last year to THB79.63 million this year.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote
this story. To contact him about this or other stories email andrew@allproperty.com.sg
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