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 have a positive view on the 4Q24E outlook, expecting earnings to have increased QoQ and turned profitable YoY, driven by higher sales and improved margins YoY and QoQ.</li><li>Business momentum is expected to continue recovering in 1Q25E, with a turnaround from the loss of Bt124mn in 1Q24.</li><li>The valuation metrics have been adjusted, with an upgrade of the short-term fundamental view to buy (previously neutral) alongside a revision of the long-term growth outlook to steady (previously strong). </li></ul>

We have a positive view on the 4Q24E outlook, expecting earnings to have increased QoQ and turned profitable YoY, driven by higher sales and improved margins YoY and QoQ.Business momentum is expected to continue recovering in 1Q25E, with a turnaround from the loss of Bt124mn in 1Q24.The valuation metrics have been adjusted, with an upgrade of the short-term fundamental view to buy (previously neutral) alongside a revision of the long-term growth outlook to steady (previously strong). 

Betagro - 4Q24E Core Profit to Have Increased 4% QoQ

<ul><li>The 3Q24 performance improved YoY and QoQ, exceeding expectations by 6%, and it is likely to be the best quarter of the year.</li><li>Although the 4Q24E profit is expected to decline QoQ due to seasonality, it should turn around from the loss in 4Q23.</li><li>The valuation metrics continue to show a strong outlook for long- term growth, with two-year profit growth projected at a CAGR of 34%, driven by a projected 4% annual increase in sales and a 70 bps rise in the gross profit margin per year.</li></ul>

The 3Q24 performance improved YoY and QoQ, exceeding expectations by 6%, and it is likely to be the best quarter of the year.Although the 4Q24E profit is expected to decline QoQ due to seasonality, it should turn around from the loss in 4Q23.The valuation metrics continue to show a strong outlook for long- term growth, with two-year profit growth projected at a CAGR of 34%, driven by a projected 4% annual increase in sales and a 70 bps rise in the gross profit margin per year.

Betagro - Better 3Q24 Earnings YoY and QoQ, 6% Above Estimate

<ul><li>We have a neutral outlook on the 3Q24E performance, expecting profit to have increased QoQ and recovered from a loss YoY.</li><li>However, we hold a slightly negative view on the 3Q24E gross margin, which is expected to have remained stable QoQ (previously we anticipated it to have improved).</li><li>KTX maintains a Neutral rating, but we revise down the fair value to Bt20.60 using the earnings yield method with a required return of 5.4% (from Bt24.14 with a required return of 4.1% previously). </li></ul>

We have a neutral outlook on the 3Q24E performance, expecting profit to have increased QoQ and recovered from a loss YoY.However, we hold a slightly negative view on the 3Q24E gross margin, which is expected to have remained stable QoQ (previously we anticipated it to have improved).KTX maintains a Neutral rating, but we revise down the fair value to Bt20.60 using the earnings yield method with a required return of 5.4% (from Bt24.14 with a required return of 4.1% previously). 

Betagro - 3Q24E Core Profit to Have Increased 36% QoQ

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>Couple of weeks from the start of the review period for the December rebalance of <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">SET 50 Index</a>, we see four potential index changes.</li>
<li>There are a few stocks that are close to the inclusion zone and there could be a reordering among the non-constituents as stock prices move around.</li>
<li>The potential adds have outperformed the potential deletes since the start of the year with most of the outperformance coming over the last 6 weeks.</li>
</ul>


Couple of weeks from the start of the review period for the December rebalance of SET 50 Index, we see four potential index changes.
There are a few stocks that are close to the inclusion zone and there could be a reordering among the non-constituents as stock prices move around.
The potential adds have outperformed the potential deletes since the start of the year with most of the outperformance coming over the last 6 weeks.


SET50 Index Rebalance Preview: Four Changes & A Few Close Names

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).</li>
<li>In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in December 2024.</li>
<li>At present, we see 3 ADDs and 3 DELs but since the reference period is yet to start, the rankings can fluctuate significantly before the base date.</li>
</ul>


The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in December 2024.
At present, we see 3 ADDs and 3 DELs but since the reference period is yet to start, the rankings can fluctuate significantly before the base date.


Quiddity Leaderboard SET50 Dec 24: 3 Changes Likely; INTUCH-GULF Merger Should Be Monitored

Thailand

Betagro is a leading integrated agro-industrial and food company in Thailand. Its core businesses include animal feed production, livestock farming, animal health products, and the production and distribution of meat, eggs, fish, and processed foods, including pet food. The company is headquartered in Bangkok, Thailand, and was founded in 1967.

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Betagro (BTG TB)

Betagro - 4Q24E Core Profit to Have Increased 4% QoQ

We have a positive view on the 4Q24E outlook, expecting earnings to have increased QoQ and turned profitable YoY, driven by higher sales and...

Krungthai XSpring

Betagro - Better 3Q24 Earnings YoY and QoQ, 6% Above Estimate

The valuation metrics continue to show a strong outlook for long- term growth, with two-year profit growth projected at a CAGR of 34%, driven by a...

Krungthai XSpring

Betagro - 3Q24E Core Profit to Have Increased 36% QoQ

We have a neutral outlook on the 3Q24E performance, expecting profit to have increased QoQ and recovered from a loss YoY.

Krungthai XSpring

SET50 Index Rebalance Preview: Four Changes & A Few Close Names

There are 4 potential changes for the SET50 in Dec. There are some other stocks that could make the cut. The adds have outperformed the deletes....

Brian Freitas

Quiddity Leaderboard SET50 Dec 24: 3 Changes Likely; INTUCH-GULF Merger Should Be Monitored

Although there are only three changes expected right now, there are multiple names just outside the border requiring small relative price changes...

Janaghan Jeyakumar, CFA

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