Message from the chairman

Thanks to our careful and thorough analysis and advanced planning to cope with the situation both domestically and globally, now and in the future, in the past year the Company had an aggregate revenue of Baht 3,087 million representing an increase of 12% from the year 2015.

Dear Shareholders,

In light of the turbulence on global economic landscape, although Thailand’s economic growth in 2016 was higher than 2015 but for property development business the year 2016 was not really a good year. A notable contributing factor is the cessation of the government assisted policy on property transfer fees since April, which clearly suppressed the purchasing power of middle to lower market. Household debt figure stood high and financial institutions were cautious in granting loans for both operators and customers resulting in less liquidity in the economy and high level of property stock. Given the declining purchasing power among the consumers, price war among operators is inevitable. Therefore, in 2016 the operators faced difficulty both in terms of limited transactions and selling at a reduced profit margin.

However, thanks to our careful and thorough analysis and advanced planning to cope with the situation both domestically and globally, now and in the future, in the past year the Company had an aggregate revenue of Baht 3,087 million representing an increase of 12% from the year 2015. Property sales accounted for Baht 1,908 million, 60% of which was from Thew Talay project. This also included a portion from Thew Talay phase 3 (BLU) the transfer of which had been planned to be completed before the end of 2016.

In addition, we also successfully converted the Baht 2,000 million Sri panwa Property Fund into Real Estate Investment Trust before the end of 2016 which made it the first and only Property Fund to be set up within the timeframe of the Government’s promotion. That was a result of 3 years of preparation and working closely with various government authorities in order to bring this government’s policy to a successful completion.

We were able to sell phase 2 of Sri panwa hotel and a pool villa to the Sri panwa Hotel Real Estate Investment Trust at a combined value of Baht 1,300 million just in time for our target resulting in the Company’s profit from this transaction of approximately Baht 429 million which also increased the value of this trust to Baht 3,300 million. We have also planned to inject Baba Beach Club at Natai and Cha Am into this trust in the future.

Apart from that there was a revenue of Baht 531 million from Sri panwa hotel, revenue from rental and services of Baht 80 million and Baht 74 million from management fees which also included the fees baht 53.3 million from joint venture with Tienyuan Ltd. of China.

Construction of various projects made reasonable progress with slight delay in some projects due to design adjustment to make them more appealing, durable and suitable. The phase 1 of Baba Beach Club Cha Am which includes 18 units of seaside suites is expected to be operational in the third quarter of this year. In August 2016 the construction of the Baht 400 million Thew Talay Estate Villa was launched. Four Villas out of the total of 11 Villas had been sold at the approximate price of Baht 39 million each.

The Baba Beach Club at Natai, Phangha province which consists of 18 units of suites is expected to be operational around the coming new year. In addition, we sold a large 5 bedrooms Villa out of 6 at the price of Baht 128 million during the year. We have also started the construction of phase 2 which consists of 18 units of pool villas of which 3 have been sold.

In Bangkok, during the year 2016 revenue from sales of ISSI Condo and The Issara amounted to Baht 517 million and Baht 92 million respectively. In July, we launched Baan Issara Residence Rama 9, and Baan Issara Bangna with project value of Baht 1,820 and 2,600 million respectively.

In general, during 2016 the Company had managed its business reasonably well. For the foreseeable future property development business is expected to face difficulty continuing from 2016. The Company needs to operate with caution. New investment projects will have to be undertaken with care avoiding project types with too many competitors and projects targeting middle to low income groups. Take the example of the ISSI project, existing customers will need to be looked after. Sales and marketing plan will need to be readjusted. Sources of fund will have to be expanded and diversified. Budgetary planning will have to be carefully scrutinized taking care of weaknesses and strength. All these analyses have been important tools contributing to efficient operation all along. The expansion into hotel business, the establishment of Real Estate Investment Trust, and management of hotel operation have earned a sound and continued revenue in the long term. The Company’s revenue fluctuation which is a unique character of midsize property development company like ours has thereby been reduced as a result. In addition, we have started training business for service industry to pave way for development of hotel management school in conjunction with an overseas leading institution in the near future. Last September we signed an agreement with Loxley PCL for the feasibility study of generating power with organic fertilizer as a byproduct from community’s garbage in Phuket.

I wish to ensure our shareholders that no matter what the future will be, the Company will be determined to do its best by creating benefits, satisfaction and sustainable happiness to all stakeholders including the society and the country according to the teaching of His Majesty the late King Bhumibol Adulyadej who we have great respect for.

May I quote Dr. Santi Kiranand, Senior Executive Vice President Head of Issuer Marketing Division of the Stockof Exchange of Thailand who had made a speech on the first trading day of Sripanwa Hotel Real Estate Investment Trust on December 23, 2016 as follows: “ It is with honor both personally and for the Stock Exchange of Thailand that Charn Issara Group has deployed all available mechanisms in the capital market and is a leader in using a variety of tools in the capital market in operating its business which will result in business growth. It is also an honor for Thailand to have a business with such a long vision and capability to utilize financial tools to support and enable Thai business to compete at national and international level”.

I wish to thank everyone who has participated both physically and mentally to the best of their ability for the smooth operation of the Company’s business. May you all be happy. Yours sincerely,


( Mrs. Srivara Issara )
Chairperson Charn Issara Development PCL.