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>KTX switches to a Buy rating (vs. Outperform previously), with a 12M FV of Bt62.17, based on the earnings yield and a required return of 4.6%, reflecting the PER target of 22x.</li><li>This FV implies upside of around 10%.  The valuation metrics suggest a more positive view on the fundamentals, and the tactical downside risk is limited.</li><li>Meanwhile, the long-term growth prospects are strong, with the three-year earnings expected to achieve a 22% CAGR.</li></ul>

KTX switches to a Buy rating (vs. Outperform previously), with a 12M FV of Bt62.17, based on the earnings yield and a required return of 4.6%, reflecting the PER target of 22x.This FV implies upside of around 10%.  The valuation metrics suggest a more positive view on the fundamentals, and the tactical downside risk is limited.Meanwhile, the long-term growth prospects are strong, with the three-year earnings expected to achieve a 22% CAGR.

Cp All - 2Q24E Core Profit to Grow 30% YoY but Fall 3% QoQ

Technical Analysis

<ul><li>The SET initially declined before swiftly improving as the market shifted its focus to the economic stimulus measures set to be unveiled next week and significantly increased export figures.</li><li>The index may not have shown a reversal signal, but it was able to consistently remain above the support at 1,288 points, indicating that it has created a solid base for a rebound.</li><li>The index is likely to keep rising but needs to quickly adjust upward with heavy volume to confirm the positive signal.</li></ul>

The SET initially declined before swiftly improving as the market shifted its focus to the economic stimulus measures set to be unveiled next week and significantly increased export figures.The index may not have shown a reversal signal, but it was able to consistently remain above the support at 1,288 points, indicating that it has created a solid base for a rebound.The index is likely to keep rising but needs to quickly adjust upward with heavy volume to confirm the positive signal.

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cp-axtra-pcl" target="_blank" data-smartkarma-citation="entities:5577:1" rel="noopener">CP Axtra (CPAXT TB)</a> is a merger upon a merger combining the Makro wholesale business and the Lotus hypermarket and supermarket businesses, along with a hybrid mall operation. </li>
<li>The combined entity continues to realise operational synergies in sourcing and logistics, with a strong B2B element. Omnichannel makes up more than 16% of sales and is growing rapidly.</li>
<li>
<a href="https://www.smartkarma.com/entities/cp-axtra-pcl" target="_blank" data-smartkarma-citation="entities:5577:1" rel="noopener">CP Axtra (CPAXT TB)</a> provides an alternative retail exposure to its parent <a href="https://www.smartkarma.com/entities/cp-all-pcl" target="_blank" data-smartkarma-citation="entities:13889:1" rel="noopener">CP ALL (CPALL TB)</a> with ongoing restructuring benefits still to be realised. Valuations look attractive relative to growth.  </li>
</ul>



CP Axtra (CPAXT TB) is a merger upon a merger combining the Makro wholesale business and the Lotus hypermarket and supermarket businesses, along with a hybrid mall operation. 
The combined entity continues to realise operational synergies in sourcing and logistics, with a strong B2B element. Omnichannel makes up more than 16% of sales and is growing rapidly.

CP Axtra (CPAXT TB) provides an alternative retail exposure to its parent CP ALL (CPALL TB) with ongoing restructuring benefits still to be realised. Valuations look attractive relative to growth.  


<ul><li>We initiate our coverage on CPALL with an Outperform rating (FV: Bt60.94) based on a required rate of return of 4.23%, reflecting a PER target of 23.7x.</li><li>KTX’s valuation metrics suggest that the share price is below the fair value, while the long-term outlook is strong, with an expected 22% CAGR in the next three years.</li><li>The tactical view is neutral.</li></ul>

We initiate our coverage on CPALL with an Outperform rating (FV: Bt60.94) based on a required rate of return of 4.23%, reflecting a PER target of 23.7x.KTX’s valuation metrics suggest that the share price is below the fair value, while the long-term outlook is strong, with an expected 22% CAGR in the next three years.The tactical view is neutral.

Cpall - Quality Earnings; Strong Financial Position; Attractive Valuation

<ul><li>Trading Economics expects better growth at +0.4% QoQ and 0% YoY (vs. 4Q23 at -0.3% QoQ and -0.2% YoY) and forecasts economic growth in 2Q-4Q24E at +0.4% QoQ, +0.3% QoQ and +0.4% QoQ, respectively.</li><li>The consensus expects the University of Michigan Consumer Sentiment Index to drop to 76 (vs. April at 77.2) and continue to decline to 75.0 at the end of 2Q24E.</li><li>We recommend stocks with positive news stories: TQM, TKN and CPN.</li></ul>

Trading Economics expects better growth at +0.4% QoQ and 0% YoY (vs. 4Q23 at -0.3% QoQ and -0.2% YoY) and forecasts economic growth in 2Q-4Q24E at +0.4% QoQ, +0.3% QoQ and +0.4% QoQ, respectively.The consensus expects the University of Michigan Consumer Sentiment Index to drop to 76 (vs. April at 77.2) and continue to decline to 75.0 at the end of 2Q24E.We recommend stocks with positive news stories: TQM, TKN and CPN.

University of Michigan Consumer Sentiment Index & UK's 1Q24 GDP

Thailand

CP ALL Public Company Limited operates 7-Eleven convenience stores as the sole licensee in Thailand, offering a wide range of food and non-food products. The company also engages in wholesale and retail businesses, including Makro, and provides related services such as bill payments, food production, and retail equipment. CP ALL was founded in 1988 and is headquartered in Bangkok, Thailand.

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CP ALL (CPALL-R TB)

Cp All - 2Q24E Core Profit to Grow 30% YoY but Fall 3% QoQ

KTX switches to a Buy rating (vs. Outperform previously), with a 12M FV of Bt62.17, based on the earnings yield and a required return of 4.6%,...

Krungthai XSpring

Recommendation: Brief Speculation

The SET initially declined before swiftly improving as the market shifted its focus to the economic stimulus measures set to be unveiled next week...

Krungthai XSpring

CP Axtra (CPAXT TB) - Symbiotic Alliance

CP Axtra (CPAXT TB) provides an alternative retail exposure to its parent CP ALL (CPALL TB) with ongoing restructuring benefits still to be...

Angus Mackintosh

Cpall - Quality Earnings; Strong Financial Position; Attractive Valuation

We initiate our coverage on CPALL with an Outperform rating (FV: Bt60.94) based on a required rate of return of 4.23%, reflecting a PER target of...

Krungthai XSpring

University of Michigan Consumer Sentiment Index & UK's 1Q24 GDP

Trading Economics expects better growth at +0.4% QoQ and 0% YoY (vs. 4Q23 at -0.3% QoQ and -0.2% YoY) and forecasts economic growth in 2Q-4Q24E at...

Krungthai XSpring

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