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

<ul>
<li>We maintain an Underperform rating, as AH remains unattractive from a fundamental valuation perspective.</li>
<li>The stock has approximately 8% downside risk from the fair value (FV) of Bt16.30, based on a required return of 19.9%.</li>
<li>In addition, the long-term growth outlook may be downgraded due to a sharper-than-expected decline in Thai auto production in 9M24.</li>
</ul>


We maintain an Underperform rating, as AH remains unattractive from a fundamental valuation perspective.
The stock has approximately 8% downside risk from the fair value (FV) of Bt16.30, based on a required return of 19.9%.
In addition, the long-term growth outlook may be downgraded due to a sharper-than-expected decline in Thai auto production in 9M24.


Aapico Hitech - 3Q24 Earnings Pressured by Weak Business in Thailand

Thematic (Sector/Industry)

<ul><li>Auto production in August 2024 continued to slow down YoY for the 13th consecutive month, pressured by weak domestic demand, with domestic car sales having reached a three-year low amid export challenges.</li><li>We maintain an Underweight rating on the automotive sector due to weak recovery signals, which may pose downside risk to our 2024E auto production forecast.</li><li>Meanwhile, stock valuations remain tight. Signs of economic recovery and easing pressure on NPLs could present potential entry points for the sector.</li></ul>

Auto production in August 2024 continued to slow down YoY for the 13th consecutive month, pressured by weak domestic demand, with domestic car sales having reached a three-year low amid export challenges.We maintain an Underweight rating on the automotive sector due to weak recovery signals, which may pose downside risk to our 2024E auto production forecast.Meanwhile, stock valuations remain tight. Signs of economic recovery and easing pressure on NPLs could present potential entry points for the sector.

Industry Update: Automotive - SEPTEMBER 25, 2024

<ul><li>We switch our rating to Underperform (from Neutral).</li><li>The valuation metrics suggest a more optimistic view on the earnings growth prospects (due to the low base in 2024E), but the valuation is unattractive both in terms of the fundamentals and the tactical view.</li><li>Our 12M forward fair value, based on the earnings yield method, has been revised down to Bt16.30 (vs. Bt23.60) due to downward revisions to our earnings estimates and an increase in the required return as the discount rate to 19.9% (from 19.5% previously).</li></ul>

We switch our rating to Underperform (from Neutral).The valuation metrics suggest a more optimistic view on the earnings growth prospects (due to the low base in 2024E), but the valuation is unattractive both in terms of the fundamentals and the tactical view.Our 12M forward fair value, based on the earnings yield method, has been revised down to Bt16.30 (vs. Bt23.60) due to downward revisions to our earnings estimates and an increase in the required return as the discount rate to 19.9% (from 19.5% previously).

Aapico Hitech - 2H24E Earnings to Accelerate, but Valuation Stretched

<ul><li>Sluggish auto production continued to put downward pressure on the revenue and core profit of the three auto firms under our coverage both YoY and QoQ in 2Q24.</li><li>Although operating performances may potentially rebound QoQ due to seasonal factors, they are still likely to contract YoY given the gradual pace of auto production recovery.</li><li>Meanwhile, these three companies have outperformed the SET in the past month (+9.0% vs. the SET at +4.8%), narrowing the upside to their fair values, which implies that the potential earnings recovery in 2H24E may be largely priced in. </li></ul>

Sluggish auto production continued to put downward pressure on the revenue and core profit of the three auto firms under our coverage both YoY and QoQ in 2Q24.Although operating performances may potentially rebound QoQ due to seasonal factors, they are still likely to contract YoY given the gradual pace of auto production recovery.Meanwhile, these three companies have outperformed the SET in the past month (+9.0% vs. the SET at +4.8%), narrowing the upside to their fair values, which implies that the potential earnings recovery in 2H24E may be largely priced in. 

Automotive - Potential Recovery in 2H24E Performance Already Priced In

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<ul>
<li>Tong Yang Industry is now seeing record profit in FY23 and this appears to be in place to continue during FY24</li>
<li>The automobile and motorcycle parts manufacturing company is seeing strong growth in the US market</li>
<li>Electric vehicle parts R&amp;D is well underway and this should support continued growth in coming years</li>
</ul>


Tong Yang Industry is now seeing record profit in FY23 and this appears to be in place to continue during FY24
The automobile and motorcycle parts manufacturing company is seeing strong growth in the US market
Electric vehicle parts R&amp;D is well underway and this should support continued growth in coming years


Tong Yang Industry - Record Profit With Improving Financial Position

Thailand

Aapico Hitech Public Company Limited manufactures car assembly jigs and stamping dies used for manufacturing automobiles in assembly plants. The Company also manufactures OEM automotive parts and operates automobile dealership business.

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Aapico Hitech (AH TB)

Aapico Hitech - 3Q24 Earnings Pressured by Weak Business in Thailand

We maintain an Underperform rating, as AH remains unattractive from a fundamental valuation perspective. The stock has approximately 8% downside...

Krungthai XSpring

Industry Update: Automotive - SEPTEMBER 25, 2024

We maintain an Underweight rating on the automotive sector due to weak recovery signals, which may pose downside risk to our 2024E auto production...

Krungthai XSpring

Aapico Hitech - 2H24E Earnings to Accelerate, but Valuation Stretched

We switch our rating to Underperform (from Neutral). The valuation metrics suggest a more optimistic view on the earnings growth prospects (due to...

Krungthai XSpring

Automotive - Potential Recovery in 2H24E Performance Already Priced In

Sluggish auto production continued to put downward pressure on the revenue and core profit of the three auto firms under our coverage both YoY and...

Krungthai XSpring

Tong Yang Industry - Record Profit With Improving Financial Position

Strong 2Q24 results just out: NTD1.04bn vs NTD758m net profit. Continues to shows ongoing earnings strength, even after exceptional 1Q24.

Daniel Tabbush

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