Nine property firms the analysts are monitoring should post combined second-half net profits of Bt16.3 billion, up by 8% from the same period last year and up 55% over the first half of 2012, thanks to the contracts in hand, which should translate into Bt78 billion in revenue in the second half of this year. Most of the condominium projects will be delivered in the current second half. Full-year net profits of Bt26.9 billion are expected for the group, an increase of 17%.

However, risk factors to be aware of include loan rejections, abandonment of down payments, continuing weakening of demand in the third quarter amid stiff competition, and intense sales promotions. New projects this year reflect both volume and value growth that should set 20-year records. Some property-development firms may postpone project openings from this year to next year because of the sluggish demand.

Maybank Kim Eng maintains the property sector's investment weight on par with the market, based on the 8-per-cent year-on-year net-profit growth and 55-per-cent half-on-half growth of this group of nine property firms. However, downside factors remain, such as a possible delay (including loan rejections) in delivering the backlogged contracts of the nine firms, worth Bt78 billion in revenue, which will be recorded in the second half of 2013.

Furthermore, the analysts foresee stiffer sales and promotion competition to generate sales, which will create downside risk from rising operating expenses. If sales do not pick up by the final quarter, the operational results of next year will be below the 16-per-cent growth target. For this group, the analysts still like Pruksa Real Estate and Quality Houses.

In the past two weeks, Raimon Land, Pruksa and Quality Houses have been ranked in the top three in which the stock prices rebounded.

Share prices of Land & Houses (LH) and LPN are recovering slightly. As for Sansiri and Asian Property Development, the share prices have slipped, and recovery is slow because of the lowest earnings-per-share ratios in the group.

LPN Development has the lowest debt-to-equity ratio, at only 0.82 time (as of the end of June), among the 14 property firms with assets of at least Bt10 billion. This reflects the financial strength of LPN during slow economic times amid stricter loan policies of commercial banks, the analysts said. LPN's low D/E ratio means it has a better chance of securing bank loans than rivals.

LH is ranked second in terms of D/E ratio at only 1.05 times, followed by third-ranked Supalai at 1.06 times, fourth-place Ananda at 1.25 times, and fifth-ranked Pruksa at 1.43 times.

Bualuang Securities said LPN had the strongest balance sheet, which would help it secure prime land locations and bank loans.