Thailand's Quality Houses (QH): 2Q08 will be a strong quarter.

Section: Stocks - QH's 2Q08 results are expected to be very strong with profit jumping 83% y-o-y and 45% q-o-q to Bt446m. This would be led by (i) surge in revenue from housing sales as some homebuyers delayed title transfers from 1Q08 to wait for the tax-cut package to take effect, (ii) tax savings from the government's tax-cut package that should result in lower SGA expenses.

QH has launched 6 projects YTD and plans to launch 5 more in 2H08. Although QH seems to have been less affected by falling consumer confidence, mounting inflation and a slowing economy YTD, we are concerned about industry prospects in 2H08. Buyers of high-end properties are less sensitive to …