Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

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Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

We came out with a positive tone after yesterday analyst meeting driven by MK’SSSG recovery rapidly after lockdown easing.<ul>
<li>We expect COVID-19 vaccine’s progression in 1H21 to limit downside risk to earnings.</li>
<li>We expect rapid SSSG recovery in 2H20 after lockdown easing. We assume MK’SSSG in 2H20 at roughly -10% to -15% from its bottom at -56% in 2Q20.</li>
<li>We still like M for its long-term prospect on the backs of; (1) established position in chain restaurant in Thailand with 737 branches coverage nationwide, (2) franchise expansion plan to oversea under Laem Charoen Seafood brand, (3) upside from new product launch.</li>
</ul>We maintain HOLD rating with a target price of Bt50 based on 25xPE’21E, closed to the Asia ex-Japan consumer staple sector. We expect the company’s earnings to turn profit in 3Q20 onwards.

We came out with a positive tone after yesterday analyst meeting driven by MK’SSSG recovery rapidly after lockdown easing.
We expect COVID-19 vaccine’s progression in 1H21 to limit downside risk to earnings.
We expect rapid SSSG recovery in 2H20 after lockdown easing. We assume MK’SSSG in 2H20 at roughly -10% to -15% from its bottom at -56% in 2Q20.
We still like M for its long-term prospect on the backs of; (1) established position in chain restaurant in Thailand with 737 branches coverage nationwide, (2) franchise expansion plan to oversea under Laem Charoen Seafood brand, (3) upside from new product launch.
We maintain HOLD rating with a target price of Bt50 based on 25xPE’21E, closed to the Asia ex-Japan consumer staple sector. We expect the company’s earnings to turn profit in 3Q20 onwards.

M: Rapid SSSG Recovery with Potential Growth from Seafood Restaurant

We initiate coverage on M with a BUY rating, based on a target price of Bt96 and derived from 31xPE’18E, which is the +2SD of three-year average trading range.The story:<ul><li>Brand portfolio strategy to support sales and margin expansion</li><li>Consumption recovery and marketing activities to boost SSSG</li><li>Expansion of nationwide outlet network is ramping up</li><li>Upside from spin-off of logistics business</li></ul>Risks:  <ul><li>Raw-material procurement</li><li>Increasing staff costs</li></ul>Background: The M story starts in 1962, when Thongkam Mekto took over the small MK shop house restaurant in Siam Square, Bangkok from former owner Makong King Yee, a Hong Kong businessman, hence the “MK” name. Around 1986, Thongkam opened her first MK branch at the Central Department Store complex in Ladprao. The chain grew, and in 1989, MK Restaurant Group Public Company Limited (M) was established. Its core business is to operate suki, Japanese, Thai restaurants, and coffee shops, led by 638 outlets under its flagship MK brand. M has sold the MK Suki franchise to operators in Japan, Vietnam and Laos and further offshore expansion came with a joint-venture company to operate restaurant business in Singapore in 2011.

We initiate coverage on M with a BUY rating, based on a target price of Bt96 and derived from 31xPE’18E, which is the +2SD of three-year average trading range.The story:Brand portfolio strategy to support sales and margin expansionConsumption recovery and marketing activities to boost SSSGExpansion of nationwide outlet network is ramping upUpside from spin-off of logistics businessRisks:  Raw-material procurementIncreasing staff costsBackground: The M story starts in 1962, when Thongkam Mekto took over the small MK shop house restaurant in Siam Square, Bangkok from former owner Makong King Yee, a Hong Kong businessman, hence the “MK” name. Around 1986, Thongkam opened her first MK branch at the Central Department Store complex in Ladprao. The chain grew, and in 1989, MK Restaurant Group Public Company Limited (M) was established. Its core business is to operate suki, Japanese, Thai restaurants, and coffee shops, led by 638 outlets under its flagship MK brand. M has sold the MK Suki franchise to operators in Japan, Vietnam and Laos and further offshore expansion came with a joint-venture company to operate restaurant business in Singapore in 2011.

M: Big-Three Chain Restaurant Giant Ramps up Brands and Networks

Thailand

After You PCL operates a chain of cafeterias. The Company provides beverages, pastries, cakes, buns, and other bakery products. After You serves customers in Thailand.

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After You PCL (AU TB)

M: Rapid SSSG Recovery with Potential Growth from Seafood Restaurant

We came out with a positive tone after yesterday analyst meeting driven by MK’SSSG recovery rapidly after lockdown easing. We expect COVID-19...

Pi Securities PCL, Thailand

M: Big-Three Chain Restaurant Giant Ramps up Brands and Networks

We initiate coverage on M with a BUY rating, based on a target price of Bt96 and derived from 31xPE’18E, which is the +2SD of three-year average...

Pi Securities PCL, Thailand

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