Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>HK reopening is debatable and seems to be very hard to predict as the Chinese government is keen to keep zero COVID stands although recent quarantine time reduction is positive. </li>
<li>The number of passengers remains weak although the shorter quarantine reduction could provide short-term relief to the share price. </li>
<li>Valuation looks undemanding compared to the peers although the outlook is more uncertain. Stay out for now. </li>
</ul>


HK reopening is debatable and seems to be very hard to predict as the Chinese government is keen to keep zero COVID stands although recent quarantine time reduction is positive. 
The number of passengers remains weak although the shorter quarantine reduction could provide short-term relief to the share price. 
Valuation looks undemanding compared to the peers although the outlook is more uncertain. Stay out for now. 


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

Pi Research

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

Bangkok Expressway and Metro / Equity Bottom-Up

<ul>
<li>We expect the company to report net profit of Bt400m in 1Q22. (+1%QoQ+31%YoY), the highest level in the past five quarters.YoY expansion will be due to effective operating cost management</li>
<li>Expect daily ridership to reach 70% of pre-COVID19 level by 3Q22, under assumption that there will be no major restriction measures induced by the virus outbreak. Furthermore, we expect ridership </li>
<li>Earlier-Than-Expected bidding for Orange line will be the re-rating catalyst (previously expected to take place within 1H22). We estimate upsides from this project at Bt1.90 per share.</li>
</ul>


We expect the company to report net profit of Bt400m in 1Q22. (+1%QoQ+31%YoY), the highest level in the past five quarters.YoY expansion will be due to effective operating cost management
Expect daily ridership to reach 70% of pre-COVID19 level by 3Q22, under assumption that there will be no major restriction measures induced by the virus outbreak. Furthermore, we expect ridership 
Earlier-Than-Expected bidding for Orange line will be the re-rating catalyst (previously expected to take place within 1H22). We estimate upsides from this project at Bt1.90 per share.


BEM: Expect to Report Five-Quarter High Net Profit in 1Q22

<ul>
<li>We maintain BEM with a BUY rating and a target price of Bt10.30 derived from SOTP methodology, which is equivalent to 51.5xPE’22E.</li>
<li>We expect the company to report net profit of Bt290m in 4Q21. (+168%QoQ -49%YoY), the highest level in the past three quarters.</li>
<li>YoY contraction will be mainly due to impact from 3rd wave of COVID-19 widespread, which trimmed down average daily toll traffic to 984k trips/day(-13%YoY +47%QoQ) and MRT ridership to 175k </li>
</ul>


We maintain BEM with a BUY rating and a target price of Bt10.30 derived from SOTP methodology, which is equivalent to 51.5xPE’22E.
We expect the company to report net profit of Bt290m in 4Q21. (+168%QoQ -49%YoY), the highest level in the past three quarters.
YoY contraction will be mainly due to impact from 3rd wave of COVID-19 widespread, which trimmed down average daily toll traffic to 984k trips/day(-13%YoY +47%QoQ) and MRT ridership to 175k 


BEM: Expect 4Q21 Earnings to Recover Strongly and Onward to 2022

<p>Low ridership and reopening have presented a dilemma to investors whether it is time to start building positions in the mass transport operator <a href="https://www.smartkarma.com/entities/bangkok-expressway-and-metro-68c0c1b3-af0c-4380-a380-f3dc7ba5d5ac" target="_blank" data-smartkarma-citation="entities:22849:1" rel="noopener">Bangkok Expressway and Metro (BEM TB)</a> . On one hand, the low ridership presents room for improvement which means recovery of net income, therefore, a lower forward PE multiple. On the other hand, the reopening is yet to happen and how much is the increase in ridership is unclear. </p>
<p>With the reopening date is set, coming back to school, and the support from the Thai government to jump-start the tourism sector by having a grandiose New Year celebration with no less than sending an invite to the world-renown Andrea Bocelli to perform,  the mass transport ridership is set to increase from both the domestic reopening as well as from the increase in tourists arrival.</p>
<p>Compared to <a href="https://www.smartkarma.com/entities/airports-of-thailand-pcl" target="_blank" data-smartkarma-citation="entities:239:1" rel="noopener">Airports of Thailand (AOT TB)</a> which trades at 8x book value, BEM (at 3.6x book value) does not look expensive.  BEM'share price is trailing behind <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-index" target="_blank" data-smartkarma-citation="entities:22915:1" rel="noopener">Thailand SET Index (SET INDEX)</a> in the recovery from COVID-19.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/236/285/original/image_21721413921634706788909.png?1634706789" class="editor-image img-responsive" data-smartkarma-image-id="236285"></figure>
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<div class="content-remarks">
<p>source: Reuters</p>
</div>

Low ridership and reopening have presented a dilemma to investors whether it is time to start building positions in the mass transport operator Bangkok Expressway and Metro (BEM TB) . On one hand, the low ridership presents room for improvement which means recovery of net income, therefore, a lower forward PE multiple. On the other hand, the reopening is yet to happen and how much is the increase in ridership is unclear. 
With the reopening date is set, coming back to school, and the support from the Thai government to jump-start the tourism sector by having a grandiose New Year celebration with no less than sending an invite to the world-renown Andrea Bocelli to perform,  the mass transport ridership is set to increase from both the domestic reopening as well as from the increase in tourists arrival.
Compared to Airports of Thailand (AOT TB) which trades at 8x book value, BEM (at 3.6x book value) does not look expensive.  BEM'share price is trailing behind Thailand SET Index (SET INDEX) in the recovery from COVID-19.



source: Reuters


Bangkok Expressway (BEM): Ridership Increase

<p><strong>We maintain BEM with a BUY rating while roll over target price to Bt10.30 (previous TP: Bt9.90) derived from SOTP methodology, which is equivalent to 51.5xPE’22E.</strong></p><div>• We expect the company to report net profit of Bt21m in 3Q21. (-90%QoQ -97%YoY), the lowest level in our available data. QoQ and YoY contraction will be mainly due to impact from 3rd wave of COVID-19 widespread, which trimmed down average daily toll traffic to 670k trips/day (-13%QoQ -41%YoY) and MRT ridership to 80k trips per day (-33%QoQ -72%YoY)</div><div></div><div>• Earnings from core business operation will be under break-even point in 3Q21, but will alleviate with dividend incomes from TTW (We estimate dividend income in 2Q21 at Bt221m)</div><div></div><div>• Recent rally in stock price factored in expectation that recovery in toll and MRT traffic number will be strong in 4Q21 after lockdown measures have eased. We expect MRT Orange-line (Bt1.9 per share upside) bidding to proceed by December’21 or latest in 1Q22. Earlier-than-expected announcement will be the key catalyst to support stock price in short-term.</div>

We maintain BEM with a BUY rating while roll over target price to Bt10.30 (previous TP: Bt9.90) derived from SOTP methodology, which is equivalent to 51.5xPE’22E.• We expect the company to report net profit of Bt21m in 3Q21. (-90%QoQ -97%YoY), the lowest level in our available data. QoQ and YoY contraction will be mainly due to impact from 3rd wave of COVID-19 widespread, which trimmed down average daily toll traffic to 670k trips/day (-13%QoQ -41%YoY) and MRT ridership to 80k trips per day (-33%QoQ -72%YoY)• Earnings from core business operation will be under break-even point in 3Q21, but will alleviate with dividend incomes from TTW (We estimate dividend income in 2Q21 at Bt221m)• Recent rally in stock price factored in expectation that recovery in toll and MRT traffic number will be strong in 4Q21 after lockdown measures have eased. We expect MRT Orange-line (Bt1.9 per share upside) bidding to proceed by December’21 or latest in 1Q22. Earlier-than-expected announcement will be the key catalyst to support stock price in short-term.

BEM: Expect 3Q21 Earnings to Be Bottom of This Year

Thailand

Bangkok Expressway and Metro Public Company Limited is a Thai public transportation company that constructs, operates, and manages expressways and rapid rail transit systems. The company also engages in commercial development, including retail space rental, advertising, and telecommunication services within its transportation networks. It was formed in 2015 through the merger of Bangkok Expressway Public Company Limited and Bangkok Metro Public Company Limited, and is headquartered in Bangkok, Thailand.

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Bangkok Expressway and Metro (BEM-R TB)

MTR (66): Open or Closed?

The Chinese government is to reduce the quarantine period may bring some positive sentiment to MTR but the border between China and HK remains...

Henry Soediarko

BEM: Expect to Report Five-Quarter High Net Profit in 1Q22

We expect the company to report net profit of Bt400m in 1Q22. (+1%QoQ +31%YoY), the highest level in the past five quarters. YoY expansion will be...

Pi Securities PCL, Thailand

BEM: Expect 4Q21 Earnings to Recover Strongly and Onward to 2022

We maintain BEM with a BUY rating and a target price of Bt10.30 derived from SOTP methodology, which is equivalent to 51.5xPE’22E.

Pi Securities PCL, Thailand

Bangkok Expressway (BEM): Ridership Increase

the reopening date is set, and with the support from the Thai government to jump-start the tourism sector, the MRT ridership is set to increase....

Henry Soediarko

BEM: Expect 3Q21 Earnings to Be Bottom of This Year

We maintain BEM with a BUY rating while roll over target price to Bt10.30 (previous TP: Bt9.90) derived from SOTP methodology, which is equivalent...

Pi Securities PCL, Thailand

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