Business Model of Small Real Estate Companies Listed in Stock Exchange of Thailand: Adaptation after COVID-19 Pandemic in 2023

Abstract

This research aims to study the business models of small-sized real estate development companies listed on the Stock Exchange of Thailand (SET), totaling 24 companies. Data for 2023 was collected from the 56-1 One-Report. The methodology used was content analysis and financial data analysis.  The study found that the revenue structure consists of 12 categories, with real estate sales serving as approximately 81% of total income.  As the result of COVID-19 crisis, 33% of companies have adapted their business models into four key areas.  These include investing in assets that generate multiple income streams and expanding portfolios into various property types beyond residential sales.  Furthermore, these firms are expanding their geographic reach in BMA and potential tourism provinces, while also broadening their property across various price segments.  Regarding the 2023 operating results, only 50% of small-sized firms reported a positive net profit. Companies with revenues of 4 billion baht or more maintained positive gross and net profit margins, benefited from lower financing costs, and demonstrated a higher interest coverage ratio.  Meanwhile, firms with revenues below 2 billion baht faced high financing costs, leading to net losses. Notably, some firms in this lower revenue bracket that diversified their business for more than 50% of total income, many still experienced losses due to high financial costs.  The findings provide a deeper understanding of business adaptive strategies, and the financial factors impacting their performance.  These findings offer lessons learned that other firms can leverage to adapt their strategies in the future.