Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

Delta Electronics Thailand  / Equity Bottom-Up

Delta Electronics (Thailand) PCL designs and manufactures electronic equipment. The Company produces power systems for telecommunications, medical equipment, and industrial automation.  Delta also produces fans, electromagnetic interference filters, and solenoids.

<ul><li>Delta International Holding Limited (DIH), a subsidiary of Delta Electronics (Taiwan) and a 14.7% shareholder in DELTA, plans to issue zero-coupon exchangeable bonds worth USD525mn to enhance working capital and support future expansion.</li><li>The bonds have a maturity date in 2030 and can be converted into DELTA shares at an initial price of Bt187.6/share (calculated at the reference price plus 40%, implying a reference price of Bt134), which may be subject to adjustment according to the terms and conditions of the bonds.</li><li>The aforementioned transaction regarding the issuance of bonds by DIH has no effect on DELTA's current policies or business operations.</li></ul>

Delta International Holding Limited (DIH), a subsidiary of Delta Electronics (Taiwan) and a 14.7% shareholder in DELTA, plans to issue zero-coupon exchangeable bonds worth USD525mn to enhance working capital and support future expansion.The bonds have a maturity date in 2030 and can be converted into DELTA shares at an initial price of Bt187.6/share (calculated at the reference price plus 40%, implying a reference price of Bt134), which may be subject to adjustment according to the terms and conditions of the bonds.The aforementioned transaction regarding the issuance of bonds by DIH has no effect on DELTA's current policies or business operations.

DELTA TB - Shareholders (DIH) Issued Convertible Bonds Exchangeable for DELTA Shares

Airports of Thailand Public Company Ltd. operates the Bangkok International Airport (Don Muang) and the New Bangkok International Airport (Suvarnabhumi).. The Company also operates provincial airports in Chiang Mai, Chiang Rai, Hat Yai, and Phuket.

<ul><li>We expect core profit in 1QFY25E and FY2025E to grow significantly, driven by an increase in passenger movements and the full-year benefit of the 3rd runway operations.</li><li>We maintain an Outperform recommendation with a 12-month forward fair value of Bt71.75, based on an earnings yield of 2.3%.</li><li>KTXs valuation metrics indicate a Buy recommendation on the back of the fundamentals, with 27% upside from the fair value. </li></ul>

We expect core profit in 1QFY25E and FY2025E to grow significantly, driven by an increase in passenger movements and the full-year benefit of the 3rd runway operations.We maintain an Outperform recommendation with a 12-month forward fair value of Bt71.75, based on an earnings yield of 2.3%.KTXs valuation metrics indicate a Buy recommendation on the back of the fundamentals, with 27% upside from the fair value. 

Airports of Thailand - Expect Strong 1QFY25E Earnings Growth...

Dohome Public Company Limited operates as a furnishing store. The Company retails hardware, tools, agricultural machinery, furniture, hvac equipment, and other related products. Dohome serves customers in Thailand.

<ul><li>4Q24E and 2024E core profit are expected to grow by 8% and 22% YoY, respectively, driven by the SSSG recovery and improving gross profit margins.</li><li>The core profit outlook for the next two years remains strong, with expected annual growth at a CAGR of 21%, supported by a turnaround in SSSG to +3% and further improvements in the gross profit margin.</li><li>The valuation metrics present a strong outlook for the long-term trends while maintaining a neutral view from a tactical perspective. </li></ul>

4Q24E and 2024E core profit are expected to grow by 8% and 22% YoY, respectively, driven by the SSSG recovery and improving gross profit margins.The core profit outlook for the next two years remains strong, with expected annual growth at a CAGR of 21%, supported by a turnaround in SSSG to +3% and further improvements in the gross profit margin.The valuation metrics present a strong outlook for the long-term trends while maintaining a neutral view from a tactical perspective. 

Dohome - 4Q24E Core Profit to Grow YoY and QoQ; 2Y Growth to Continue

Sri Trang Agro Industry / Equity Bottom-Up

Sri Trang Agro-Industry Public Company Limited produces and markets smoked sheet rubber.  The Company sells its products to tire manufacturers as primary market, and exports to Japan, China, Korea, and Taiwan as secondary market.

<ul><li>We initiate our coverage on STA with an Outperform rating and a 2025E fair value (FV) of Bt20.12, based on a required return of 6.58%, reflecting the target PER of 15.2x.</li><li>The valuation metrics indicate that the current stock price is attractive with 18% upside to our fair price; the earnings growth is steady at a 18% CAGR in 2024-26E; and the tactical parameters are neutral.</li><li>STA is a global player in the natural rubber and medical glove industry.</li></ul>

We initiate our coverage on STA with an Outperform rating and a 2025E fair value (FV) of Bt20.12, based on a required return of 6.58%, reflecting the target PER of 15.2x.The valuation metrics indicate that the current stock price is attractive with 18% upside to our fair price; the earnings growth is steady at a 18% CAGR in 2024-26E; and the tactical parameters are neutral.STA is a global player in the natural rubber and medical glove industry.

Sri Trang Agro-Industry - Stands to Benefit from Trump 2.0 Trade Policy

Thematic (Sector/Industry)

<ul><li>The overall 4Q24E performance of the six banks under our coverage is not bad, with a combined net profit of Bt39.2bn, up 6.9% YoY due to a decline in provisioning.</li><li>However, the figure is expected to have fallen 10.3% QoQ, pressured by a reduction in NIM. Among the banks, KKP is expected to post the most notable YoY profit growth, driven by a significant drop in provisioning, while KBANK may have been the only bank likely to see provisioning decline both YoY and QoQ.</li><li>Looking ahead to 2025E, we prefer banks with a higher proportion of retail and SME loans. </li></ul>

The overall 4Q24E performance of the six banks under our coverage is not bad, with a combined net profit of Bt39.2bn, up 6.9% YoY due to a decline in provisioning.However, the figure is expected to have fallen 10.3% QoQ, pressured by a reduction in NIM. Among the banks, KKP is expected to post the most notable YoY profit growth, driven by a significant drop in provisioning, while KBANK may have been the only bank likely to see provisioning decline both YoY and QoQ.Looking ahead to 2025E, we prefer banks with a higher proportion of retail and SME loans. 

Banking: The Overall Profit Outlook for the Banking Sector in 4Q24E Is Not Bad