Message from the CEO

2017 marked a beginning of a new chapter for NVD. The vertical integration of NIRVANA and DAII combined strengths of the two companies and created multiple synergies for the company. Top priority in 2017 was to blend the two teams together and transfer the entire operations into the merged entity while ensuring smooth and seamless transition. Two different corporate cultures and business procedures must go through major realignments. We have made some good progress in 2017. Synergies and combined strengths are to be deployed in building Quality of Growth from 2018 onwards.

Synergies Begin

NIRVANA started the business as a residential property developer in 2005. Over the past decade, we had established a stronghold market with a portfolio of sophisticated-design products, specifically created for Bangkok’s high-end residential market. The merger with DAII was devised to immune NVD in the highly competitive residential property market while aiming to create synergistic values across the Group.

Benefits of having prefabrication manufacturing capability are two-pronged. First and foremost, the precast construction system enables NVD, not only in rolling out new projects more efficiently and cost-effective, but also allowing larger geographical coverage as well as providing individual home building services. NIRVANA’s DNA of high-end, modern design with sophisticated functionalities can be further enhanced by the unique characteristics of pre-stressed concrete panels and can be appreciated both in NIRVANA’s development projects as well as on customer’s own piece of land.

Secondly, the exposure to prefabricated resort constructions for Group companies will provide NVD with income streams outside the residential property development markets. With a sharp rise in land acquisition costs, especially in urban areas, NVD conceives prefabricated construction service business, i.e. prefabricated home & resort building services, to help stabilize income streams and lessen the volatile impacts of the real estate sales revenues, instead of diversifying into lower-margin, mid-to-low property market.

Quality of Growth

NVD’s business is structured to contain business and financial risks. In the market situation where 40-50% of the market share is dominated by big-name developers, NVD strategically chooses to focus on its distinctive, yet profitable and sizable mid-to-high products rather than competing in the lower-margin segments. While business risk is managed by product mix and segmentation, financial risk is contained by the business model.

Most of NIRVANA homes are made to order and purchased under two contracts. First contract is for land purchase which is paid soon after the contract signing and approval of customer’s post-financing loan (if not immediately by cash). Second contract is for the house purchase which is paid upon the construction completion progress. Roughly at 50% sales of total units, NVD’s project loan is fully paid back (on an average of about 2.5 years) by the inflows of the customers’ land-purchase contracts. Given the relatively high speed of project loan repayments, i.e. less interests burden, financial leverage is accordingly maintained within suitable range. The first aspect of Quality of Growth is about containing risks.

Another aspect of Quality of Growth is about creating a business portfolio with multiple revenue streams and recurring incomes for earnings stability. NVD’s first revenues stream is from NIRVANA’s original business of Property Development for Sales. The second stream is from DAII’s business of Prefabricated Home Builder. An official relaunch is planned during the first half of 2018. DAII’s construction technology will also be catered for Prefabricated Construction Services for other business sectors both domestically and internationally. In 2018, we will also begin new businesses of Property Development for Rents and Property Development to Manage. Both of which will be constructed using prefabricated construction system for recurring income streams.

Thus, Quality of Growth is to sustain earnings growth with risks well-managed.

Re-define Living Solution

NVD’s vision is to Re-define Living Solution. Businesses and implied products in the Quality of Growth portfolio above will touch on many lives, not only customers of residential property sales. NVD is missioned to be at the forefront in living integration, inspired by holistic values in achieving new and unique living solutions. Quality of Growth portfolio will sustain by integrating new products and living solutions into our business portfolio, while fostering a creative organization that does not compromise on customer experiences. We strongly commit to business practices by co-existing with the environment and the surrounding communities under good corporate governance, while upholding the satisfaction of our stakeholders.

On behalf of Management of NVD, we wish to express sincere gratitude to Shareholders, the Board of Directors, Jointventure Partners, Business Partners, Customers, Employees, Financial Institutions, and other relevant parties for their trusts and continued supports for NVD. We will put in all our efforts to achieve our goals in maximizing shareholders’ value and the Quality of Growth in upcoming years.

Mr. Sornsak Somwattana

Chief Executive Officer