Expansion into Upcountry and Key Success Factors
AP focused on selecting prime locations in city centers, while deploying teams to conduct on-the-ground market studies to better understand customer behavior. The company then adapted house designs to align with real living needs, applying Bangkok-level standards and functionality to its home designs.
Gross Margin Outlook
Overall margin in the second half is expected to improve from 2Q, with potential to return to around 30%, supported by the commencement of transfers of JV projects, particularly Rhythm Charoennakorn Iconic, which should help underpin profitability.
Mortgage Rejection Rate and Mitigation Measures
Commercial banks are extremely cautious due to concerns over NPLs and NPAs. AP’s response is to move quickly and work closely with banks on a case-by-case screening basis every week. If a customer is rejected for financing, AP immediately re-markets the unit for resale.
Price Competition and Inventory Clearance
Intense price competition and discounting are mainly seen in the finished inventory segment, where pressure from cash flow and interest expense is highest. At the industry level, excess inventory is gradually easing as developers reduce production and new housing starts continue to decline.
Construction Cost Control and Procurement Policy
Construction costs remained relatively stable during the transition from 2Q to 3Q, as construction activity in the market has contracted, shifting bargaining power back to developers. AP has also introduced the “AP Buy” procurement system, under which it purchases construction materials directly from suppliers to strengthen negotiating power and reduce credit risk for contractors