Here is an excerpt from the bank’s latest note on Tecnisa‘s results:

“Last Friday Tecnisa reported its preliminary data for launches and pre-sales in 1Q12, which were weak in our opinion. The company decided to not launch any projects this quarter, but we believe that this can be attributed mainly to a larger volume launched in 4Q11 and the fact that the first quarter is usually weaker in terms of operational figures, which leads Tecnisa to focus on inventory sales in the period. On the sales side, sales speed from inventories was a negative highlight and remained low at 11.6% (vs. 12.6% last quarter). All in, we expect a negative market reaction

Tecnisa did not launch any projects in 1Q12… we believe that Tecnisa decided to focus on inventory sales this period. Contracted sales … shrinking 37% quarter over quarter and 54% year over year. Sales speed from inventories was the main negative highlight and was weak at 11.6% (vs.12.6% in 4Q11). 

We maintain our market-perform recommendation on the company with a YE12 fair value of BRL 16.2/share. Although we acknowledge that Tecnisa’s shares have been underperforming its sector peers YTD, we maintain our more conservative stance on the stock…”

And here is their views on Cyrela‘s results:

“Last Friday Cyrela was the second large homebuilder to disclose its pre-operational numbers for 1Q12. The company achieved only 11% of our full-year estimates for launches, but this is somewhat in line with the 10%-15% average that we expect for the industry as a whole, given that the first quarter tends to be softer on the operational side. On the sales front, although sales speed was a bit weak at 16.2% (vs. 27.6% in 4Q11 and 17.5% in 1Q11), Cyrela had already achieved 18% of the bottom of its sales guidance for the year. All in, we expect a neutral market reaction

Launches … falling 73% quarter over quarter and 23% year over year… Although Cyrela had attained only 11% of our 2012 estimates, we reiterate that the first quarter tends to be softer on the operational side and therefore we expect a pick-up over the next few quarters. Pre-sales … 49% lower than 4Q11 but increasing 22% compared with 1Q11. 

We maintain our market-perform recommendation on CYRE3 shares with a YE12 fair value of BRL 18.0/share…”

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