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.

Thematic (Sector/Industry)

<ul><li>KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.</li><li>This surplus was achieved with imports declining by 1.7% YoY, driven by reduced imports of EVs.</li><li>Concurrently, exports surged to a 14-month high, rising by 7.2% YoY, buoyed by global trade volume trends expected to grow by 2.6% YoY due to easing inflationary pressures.</li></ul>

KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.This surplus was achieved with imports declining by 1.7% YoY, driven by reduced imports of EVs.Concurrently, exports surged to a 14-month high, rising by 7.2% YoY, buoyed by global trade volume trends expected to grow by 2.6% YoY due to easing inflationary pressures.

Economic Update – Exports & Imports - June 24, 2024

<ul><li>The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.</li><li>In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.</li><li>Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. </li></ul>

The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. 

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

Equity Bottom-Up

<ul><li>KTX maintains our Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%).</li><li>Our valuation metrics suggest a strong earnings outlook in the long term, with an expected earnings turnaround.</li><li>Meanwhile, the fundamental and tactical views are neutral.</li></ul>

KTX maintains our Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%).Our valuation metrics suggest a strong earnings outlook in the long term, with an expected earnings turnaround.Meanwhile, the fundamental and tactical views are neutral.

Betagro - Expected a Core Loss in 1Q24E Before an Earnings Turnaround in 2H24E

<ul><li>The Thai swine industry is anticipated to face continued challenges this year, though not as severe as the difficulties encountered in 2023.</li><li>During that period, major operators experienced losses due to rising costs and declining prices, exacerbated by an influx of illegal swine supply and further compounded by sluggish consumption.</li><li>In 1H24E, domestic swine supply is projected to stabilize, with excess supply gradually diminishing.</li></ul>

The Thai swine industry is anticipated to face continued challenges this year, though not as severe as the difficulties encountered in 2023.During that period, major operators experienced losses due to rising costs and declining prices, exacerbated by an influx of illegal swine supply and further compounded by sluggish consumption.In 1H24E, domestic swine supply is projected to stabilize, with excess supply gradually diminishing.

Meat Sector – Thai Swine Prices to Recover in 2H24E

<ul><li>The firm reported losses in 4Q23 and 2023, but the 2024E earnings are forecast to turn around to profit.</li><li>The GPM is expected to improve clearly in 2H24E. However, the recovery outlook in 1H24E is still at risk, as swine prices may remain stable or weaken.</li><li>KTX maintains a Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%).</li></ul>

The firm reported losses in 4Q23 and 2023, but the 2024E earnings are forecast to turn around to profit.The GPM is expected to improve clearly in 2H24E. However, the recovery outlook in 1H24E is still at risk, as swine prices may remain stable or weaken.KTX maintains a Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%).

Thailand

Betagro Public Company Limited manufactures agricultural food products. The Company offers animal feed, raises livestock, produces animal health products, and markets meat products for human consumption. Betagro serves customers worldwide.

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Betagro (BTG TB)

Economic Update – Exports & Imports - June 24, 2024

KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.

Krungthai XSpring

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits

Krungthai XSpring

Betagro - Expected a Core Loss in 1Q24E Before an Earnings Turnaround in 2H24E

KTX maintains our Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%). Our valuation metrics suggest a...

Krungthai XSpring

Meat Sector – Thai Swine Prices to Recover in 2H24E

The Thai swine industry is anticipated to face continued challenges this year, though not as severe as the difficulties encountered in 2023.

Krungthai XSpring

Betagro -In- Line 4Q23 and 2023 Earnings

The GPM is expected to improve clearly in 2H24E. However, the recovery outlook in 1H24E is still at risk, as swine prices may remain stable or weaken.

Krungthai XSpring

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