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

Equity Bottom-Up

<p><strong>We upgrade from HOLD to BUY rating with a target price of Bt28 derived from 35xPE’22E, which is close to the major listed home-improvement players in Thailand. An upgrade reflects 1) stronger 2021-23 earnings growth relative to industry peer, 2) strong earnings momentum among COVID-19 outbreak, and 3) widen upside to our target price.</strong></p><div>• We expect DOHOME to report 3Q21 net profit of Bt380m (+103%YoY, -37%QoQ), YoY growth will be supported by (1) a solid SSSG at +14.5%, and (2) gross profit margin expansion from increasing bargaining power against suppliers, DC cross-dock strategies and an increase in profit margin from steel products (roughly 25% of total sales). The QoQ drop in earnings will be due to lower revenue from low-season quarter in 3Q as it is a rainy season and soften profit margin QoQ from a lower revenue contribution from high margin products.</div><div></div><div>• We expect DOHOME earnings to increase QoQ and YoY in 4Q21 supported by demand from home renovation after a flood, and YoY growth in construction materials demand on the back of solid SSSG at roughly 30% QTD.</div>

We upgrade from HOLD to BUY rating with a target price of Bt28 derived from 35xPE’22E, which is close to the major listed home-improvement players in Thailand. An upgrade reflects 1) stronger 2021-23 earnings growth relative to industry peer, 2) strong earnings momentum among COVID-19 outbreak, and 3) widen upside to our target price.• We expect DOHOME to report 3Q21 net profit of Bt380m (+103%YoY, -37%QoQ), YoY growth will be supported by (1) a solid SSSG at +14.5%, and (2) gross profit margin expansion from increasing bargaining power against suppliers, DC cross-dock strategies and an increase in profit margin from steel products (roughly 25% of total sales). The QoQ drop in earnings will be due to lower revenue from low-season quarter in 3Q as it is a rainy season and soften profit margin QoQ from a lower revenue contribution from high margin products.• We expect DOHOME earnings to increase QoQ and YoY in 4Q21 supported by demand from home renovation after a flood, and YoY growth in construction materials demand on the back of solid SSSG at roughly 30% QTD.

DOHOME: Expect Solid 3Q21 Earnings as Limited Impact from Lockdown

Pan-Asia Equity Bottom-up, Wickhams Hill

Lloyd Moffatt

Pan-Asia Equity Bottom-up

<ul>
<li>Singapore listed MM2 Asia Ltd (MM2 SP) looks to be the most immediately actionable<br>of the 7 stocks added to our list of fallen angels.</li>
<li>Keeping in Singapore, luxury watch retailer Hour Glass (HG SP) has recently<br>commenced repurchases under a 10% buyback mandate.</li>
<li>Across to Indonesia, Bundamedik (BMHS IJ) is the latest hospital to list on the IDX.<br>They’re a premium women and children's hospital with leading IVF clinics.</li>
</ul>


Singapore listed MM2 Asia Ltd (MM2 SP) looks to be the most immediately actionable of the 7 stocks added to our list of fallen angels.
Keeping in Singapore, luxury watch retailer Hour Glass (HG SP) has recently commenced repurchases under a 10% buyback mandate.
Across to Indonesia, Bundamedik (BMHS IJ) is the latest hospital to list on the IDX. They’re a premium women and children's hospital with leading IVF clinics.


Wickhams Hill Research | Under-The-Radar Issue 1

<p><strong>We maintain a HOLD rating with a new target price of Bt28 (+6% from Previous TP at 26.5) derived from 35xPE’22E, which is close to the major listed home-improvement players in Thailand.</strong></p><div>• We expect DOHOME to report 2Q21 net profit of Bt600m (+310%YoY, +11%QoQ) supported by (1) solid SSSG at 25%YoY from the low base in 2Q20 ,(2) strong revenue from four new stores expansion in the past 12 months, (3) gross profit margin expansion from increasing bargaining power against suppliers, DC cross-dock strategies and an increase in profit margin from steel products (roughly 40% of total sales).</div><div></div><div>• DOHOME announced the Stock Exchange of Thailand on 8th July 2021 to raise capital by Bt1.98bn through Private Placement (PP) with additional 75.5 million shares at the transaction price of Bt26.25 per share, causing a dilution effect by 3.1%. We have positive view toward the transaction as the company will benefit from a decrease in financial cost along with cleaner balance sheet. In addition, there will be no concern on capital raising for 360 days except ESOP warrant and stock dividends.</div>

We maintain a HOLD rating with a new target price of Bt28 (+6% from Previous TP at 26.5) derived from 35xPE’22E, which is close to the major listed home-improvement players in Thailand.• We expect DOHOME to report 2Q21 net profit of Bt600m (+310%YoY, +11%QoQ) supported by (1) solid SSSG at 25%YoY from the low base in 2Q20 ,(2) strong revenue from four new stores expansion in the past 12 months, (3) gross profit margin expansion from increasing bargaining power against suppliers, DC cross-dock strategies and an increase in profit margin from steel products (roughly 40% of total sales).• DOHOME announced the Stock Exchange of Thailand on 8th July 2021 to raise capital by Bt1.98bn through Private Placement (PP) with additional 75.5 million shares at the transaction price of Bt26.25 per share, causing a dilution effect by 3.1%. We have positive view toward the transaction as the company will benefit from a decrease in financial cost along with cleaner balance sheet. In addition, there will be no concern on capital raising for 360 days except ESOP warrant and stock dividends.

DOHOME: Expect 2Q21 Earnings to Hit the Record High

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

Asset World Corporation / Index Rebalance

<p>Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> with the changes taking effect after the close of trading on 30 June.</p><p><a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a>, <a href="https://www.smartkarma.com/entities/kce-electronics-pcl" target="_blank" data-smartkarma-citation="entities:1892:1" rel="noopener">KCE Electronics PCL (KCE TB)</a>, <a href="https://www.smartkarma.com/entities/sri-trang-agro-industry-pcl" target="_blank" data-smartkarma-citation="entities:2759:1" rel="noopener">Sri Trang Agro Industry (STA TB)</a> and <a href="https://www.smartkarma.com/entities/sri-trang-gloves-thailand-public-company-limited" target="_blank" data-smartkarma-citation="entities:29141:1" rel="noopener">Sri Trang Gloves (Thailand) Public Company Limited (STGT TB)</a> have been added to the index, replacing <a href="https://www.smartkarma.com/entities/asset-world-corp-pcl" target="_blank" data-smartkarma-citation="entities:28136:1" rel="noopener">Asset World Corporation (AWC TB)</a>, <a href="https://www.smartkarma.com/entities/bangkok-commercial-asset-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:28442:1" rel="noopener">Bangkok Commercial Asset Management (BAM TB)</a>, <a href="https://www.smartkarma.com/entities/toa-paint-thailand-pcl" target="_blank" data-smartkarma-citation="entities:24235:1" rel="noopener">TOA Paint (Thailand) (TOA TB)</a> and <a href="https://www.smartkarma.com/entities/vgi-pcl" target="_blank" data-smartkarma-citation="entities:12409:1" rel="noopener">VGI PCL (VGI TB)</a>.</p><p><a href="https://www.smartkarma.com/entities/asset-world-corp-pcl" target="_blank" data-smartkarma-citation="entities:28136:1" rel="noopener">Asset World Corporation (AWC TB)</a> and <a href="https://www.smartkarma.com/entities/toa-paint-thailand-pcl" target="_blank" data-smartkarma-citation="entities:24235:1" rel="noopener">TOA Paint (Thailand) (TOA TB)</a> are deletes on liquidity. We had <a href="https://www.smartkarma.com/entities/asset-world-corp-pcl" target="_blank" data-smartkarma-citation="entities:28136:1" rel="noopener">Asset World Corporation (AWC TB)</a> just about passing the liquidity test, while the SET sees it as failing the test.</p><p><a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a> was deleted from the index at the December 2020 rebalance and has gained 8.6% since then, while <a href="https://www.smartkarma.com/entities/bangkok-commercial-asset-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:28442:1" rel="noopener">Bangkok Commercial Asset Management (BAM TB)</a> was included in the index at the same review and has lost 11.4% since then.</p><p>One-way turnover for the rebalance is 2.86%. The impact of passive fund trading on the deletions is expected to be a lot higher than that on the inclusions.</p><p>With <a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a> shareholders meeting for their EGM on 25 June, the tender offer for <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a> should be approved. <a href="https://www.smartkarma.com/entities/banpu-public-co-ltd" target="_blank" data-smartkarma-citation="entities:15363:1" rel="noopener">Banpu Public (BANPU TB)</a> is the frontrunner to join the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> once the <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a> tender offer is complete and the free float drops below 20%.</p>

Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) with the changes taking effect after the close of trading on 30 June.IRPC PCL (IRPC TB), KCE Electronics PCL (KCE TB), Sri Trang Agro Industry (STA TB) and Sri Trang Gloves (Thailand) Public Company Limited (STGT TB) have been added to the index, replacing Asset World Corporation (AWC TB), Bangkok Commercial Asset Management (BAM TB), TOA Paint (Thailand) (TOA TB) and VGI PCL (VGI TB).Asset World Corporation (AWC TB) and TOA Paint (Thailand) (TOA TB) are deletes on liquidity. We had Asset World Corporation (AWC TB) just about passing the liquidity test, while the SET sees it as failing the test.IRPC PCL (IRPC TB) was deleted from the index at the December 2020 rebalance and has gained 8.6% since then, while Bangkok Commercial Asset Management (BAM TB) was included in the index at the same review and has lost 11.4% since then.One-way turnover for the rebalance is 2.86%. The impact of passive fund trading on the deletions is expected to be a lot higher than that on the inclusions.With Gulf Energy Development Public Company (GULF TB) shareholders meeting for their EGM on 25 June, the tender offer for Intouch Holdings (INTUCH TB) should be approved. Banpu Public (BANPU TB) is the frontrunner to join the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) once the Intouch Holdings (INTUCH TB) tender offer is complete and the free float drops below 20%.

SET50 June Index Rebalance: Four Changes Announced; One More Coming Up Soon

<p><strong>DOHOME share price surged 90%YTD to trade at 55x trailing PE (+2S.D.) or 37xPE’21E as we believe it has already priced in near-term positive factors, and thus we maintain a HOLD rating with a target price of Bt26.5, based on 35xPE’22E, which is close to major listed home-improvement players in Thailand.</strong></p><div>• We foresee DOHOME’s SSSG at +22%YoY in 2Q21, (SSSG at +60% in April and roughly +25%YoY in May) supported by 1.) proactive management strategy to promote sales on E-commerce platform and deploy direct sales team, and, 2.) solid demand for construction materials especially in steel products  (construction materials contributed 44% of total sales).</div><div></div><div>• We still like DOHOME for its 1) its store locations that aim to tap high spending customers, 2) store network expansion plan with +25%CAGR in the next two years, and, 3) an ample room to improve its margin.</div>

DOHOME share price surged 90%YTD to trade at 55x trailing PE (+2S.D.) or 37xPE’21E as we believe it has already priced in near-term positive factors, and thus we maintain a HOLD rating with a target price of Bt26.5, based on 35xPE’22E, which is close to major listed home-improvement players in Thailand.• We foresee DOHOME’s SSSG at +22%YoY in 2Q21, (SSSG at +60% in April and roughly +25%YoY in May) supported by 1.) proactive management strategy to promote sales on E-commerce platform and deploy direct sales team, and, 2.) solid demand for construction materials especially in steel products  (construction materials contributed 44% of total sales).• We still like DOHOME for its 1) its store locations that aim to tap high spending customers, 2) store network expansion plan with +25%CAGR in the next two years, and, 3) an ample room to improve its margin.

Thailand

Dohome Public Company Limited operates as a furnishing store. The Company retails hardware, tools, agricultural machinery, furniture, hvac equipment, and other related products. Dohome serves customers in Thailand.

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Dohome PCL (DOHOME TB)

DOHOME: Expect Solid 3Q21 Earnings as Limited Impact from Lockdown

We upgrade from HOLD to BUY rating with a target price of Bt28 derived from 35xPE’22E, which is close to the major listed home-improvement players...

Pi Securities PCL, Thailand

Wickhams Hill Research | Under-The-Radar Issue 1

Singapore listed MM2 Asia Ltd (MM2 SP) looks to be the most immediately actionableof the 7 stocks added to our list of fallen angels.

Lloyd Moffatt

DOHOME: Expect 2Q21 Earnings to Hit the Record High

We maintain a HOLD rating with a new target price of Bt28 (+6% from Previous TP at 26.5) derived from 35xPE’22E, which is close to the major listed...

Pi Securities PCL, Thailand

SET50 June Index Rebalance: Four Changes Announced; One More Coming Up Soon

There are 4 changes to the SET50 index with IRPC, KCE, STA & STGT replacing AWC, BAM, TOA & VGI. BANPU could be included in the next couple of...

Brian Freitas

DOHOME: Trading on High Valuation Zone

DOHOME share price surged 90%YTD to trade at 55x trailing PE (+2S.D.) or 37xPE’21E as we believe it has already priced in near-term positive...

Pi Securities PCL, Thailand

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