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

Electricity Generating / Equity Bottom-Up

<ul>
<li>The analyst meeting came out in a positive tone.The solid 2022 earnings outlook, decent dividend yield and lowering ESG concerns from transition to clean energy should support the stock performance.</li>
<li>Expect 2Q recurring profit to remain weak and recover thereafter, following seasonality of Paju ES, (49% stake, 1.8GWe).</li>
<li>The 2022 outlook looks solid from normalizing power plant operation (recovering demand)after COVID1-19 impact. Also,we see upside from new project acquisition as the company target to add 1.0GWe to portfolio</li>
</ul>


The analyst meeting came out in a positive tone.The solid 2022 earnings outlook, decent dividend yield and lowering ESG concerns from transition to clean energy should support the stock performance.
Expect 2Q recurring profit to remain weak and recover thereafter, following seasonality of Paju ES, (49% stake, 1.8GWe).
The 2022 outlook looks solid from normalizing power plant operation (recovering demand)after COVID1-19 impact. Also,we see upside from new project acquisition as the company target to add 1.0GWe to portfolio


EGCO: Clean Energy Transition to Relegate ESG Concerns

<ul>
<li>Yesterday analyst meeting came out in a positive tone.We maintain the BUY call based on a target price of Bt220.0 derived using DCF methodology (WACC 9.8%, TG 1%), implying 11.0xPE’22E.</li>
<li>Expect the 1Q22 recurring profit to improve YoY and QoQ on the back of profit recognition from investments in Linden, APEX (USA, 2Q-4Q21). Moreover, seasonal better electricity sales should offset</li>
<li>The company maintains the CAPEX plan of Bt30bn for 2022, targeting new renewable energy project additions. We expect EGCO to add around 1,000MW to portfolio in 2022 </li>
</ul>


Yesterday analyst meeting came out in a positive tone.We maintain the BUY call based on a target price of Bt220.0 derived using DCF methodology (WACC 9.8%, TG 1%), implying 11.0xPE’22E.
Expect the 1Q22 recurring profit to improve YoY and QoQ on the back of profit recognition from investments in Linden, APEX (USA, 2Q-4Q21). Moreover, seasonal better electricity sales should offset
The company maintains the CAPEX plan of Bt30bn for 2022, targeting new renewable energy project additions. We expect EGCO to add around 1,000MW to portfolio in 2022 


EGCO: Undemanding Valuation and Bright 2022 Outlook

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>The market cap review period for the June rebalance 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> starts in a couple of weeks.</li>
<li>Using the last close, we see <a href="https://www.smartkarma.com/entities/jmt-network-services-pcl" target="_blank" data-smartkarma-citation="entities:8581:1" rel="noopener">JMT Network Services (JMT)</a> and <a href="https://www.smartkarma.com/entities/bangkok-life-assurance-pcl" target="_blank" data-smartkarma-citation="entities:16237:1" rel="noopener">Bangkok Life Assurance (BLA)</a> as potential inclusions, replacing <a href="https://www.smartkarma.com/entities/ratch-group-pcl" target="_blank" data-smartkarma-citation="entities:15338:1" rel="noopener">Ratch Group PCL (RATCH TB)</a> and <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>.</li>
<li>
<a href="https://www.smartkarma.com/entities/ratch-group-pcl" target="_blank" data-smartkarma-citation="entities:15338:1" rel="noopener">Ratch Group PCL</a> is the lowest ranked index constituent and needs to move 15% higher to avoid deletion. Passive trackers will need to sell nearly 4 days of ADV.</li>
</ul>


The market cap review period for the June rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) starts in a couple of weeks.
Using the last close, we see JMT Network Services (JMT) and Bangkok Life Assurance (BLA) as potential inclusions, replacing Ratch Group PCL (RATCH TB) and KCE Electronics PCL (KCE TB).

Ratch Group PCL is the lowest ranked index constituent and needs to move 15% higher to avoid deletion. Passive trackers will need to sell nearly 4 days of ADV.


SET50 Index Rebalance Preview (June): Two Changes, Maybe Three

<ul>
<li>Yesterday analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt220.0 derived using DCF methodology (WACC 9.8% and TG 1%)</li>
<li>Expect the 4Q21 recurring profit to improve YoY on the back of profit recognition from Linden gas power plant (USA) added in 2Q21. While soften QoQ due to seasonal </li>
<li>The company has set an investment budget of Bt30bn for 2022 (with in the framework of Bt150bn for 2021-25), which will focus on new renewable energy project acquisitions.We expect EGCO</li>
</ul>


Yesterday analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt220.0 derived using DCF methodology (WACC 9.8% and TG 1%)
Expect the 4Q21 recurring profit to improve YoY on the back of profit recognition from Linden gas power plant (USA) added in 2Q21. While soften QoQ due to seasonal 
The company has set an investment budget of Bt30bn for 2022 (with in the framework of Bt150bn for 2021-25), which will focus on new renewable energy project acquisitions.We expect EGCO


EGCO: Targets 15% Growth from New M&A’s in 2022

<p><strong>Yesterday analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt220.0 derived using DCF methodology (WACC 9.8% and TG 1%), implying 11x PE’22E.</strong></p><div>• Expect the 3Q21 recurring profit to improve YoY and QoQ on the back of solid domestic electricity sales, full quarter equity income recognition from Linden cogen power plant (USA) added in 2Q21, and improving contribution from XPCL due to better water inflow.</div><div></div><div>• The 4Q21 earnings should improve YoY, while drop QoQ due to seasonal weak domestic electricity sales, and hydro power plant operations (XPCL).</div><div></div><div>• Target 1.0GWe power plant capacity addition in 2021 (+16% growth from present 6.0GWe). 27% of target achieved in 2Q21 by acquiring minority stake in Linden cogen power plant (The USA). We expect remaining to be filled with new M&amp;A’s in 2H21.</div>

Yesterday analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt220.0 derived using DCF methodology (WACC 9.8% and TG 1%), implying 11x PE’22E.• Expect the 3Q21 recurring profit to improve YoY and QoQ on the back of solid domestic electricity sales, full quarter equity income recognition from Linden cogen power plant (USA) added in 2Q21, and improving contribution from XPCL due to better water inflow.• The 4Q21 earnings should improve YoY, while drop QoQ due to seasonal weak domestic electricity sales, and hydro power plant operations (XPCL).• Target 1.0GWe power plant capacity addition in 2021 (+16% growth from present 6.0GWe). 27% of target achieved in 2Q21 by acquiring minority stake in Linden cogen power plant (The USA). We expect remaining to be filled with new M&amp;A’s in 2H21.

Thailand

Electricity Generating Public Company Limited is an electric utility holding company.  The Company, through its two major subsidiaries, produces and supplies electricity to the Electricity Generating Authority of Thailand (EGAT), under long term power purchase agreements of 20 and 15 years.  It also operates energy related businesses through joint ventures.

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Electricity Generating (EGCO TB)

EGCO: Clean Energy Transition to Relegate ESG Concerns

The analyst meeting came out in a positive tone. The solid 2022 earnings outlook, decent dividend yield and lowering ESG concerns from transition...

Pi Securities PCL, Thailand

EGCO: Undemanding Valuation and Bright 2022 Outlook

Yesterday analyst meeting came out in a positive tone. We maintain the BUY call based on a target price of Bt220.0 derived using DCF methodology...

Pi Securities PCL, Thailand

SET50 Index Rebalance Preview (June): Two Changes, Maybe Three

JMT and BLA could replace RATCH and KCE in the SET50 index at the June rebalance. There could be an adhoc change if the DTAC/TRUE merger is...

Brian Freitas

EGCO: Targets 15% Growth from New M&A’s in 2022

Yesterday analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt220.0 derived using DCF...

Pi Securities PCL, Thailand

EGCO: Positive 2H21 Earnings Outlook

Yesterday analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt220.0 derived using DCF...

Pi Securities PCL, Thailand

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