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>The SET Index is expected to gain, with the resistance at 1,630/1,640 points and the support at 1,611/1,605 points.</li><li>We recommend trading buy on KBANK, MINT and ERW.</li><li>Technically, the index remains in an uptrend, with the key resistance at 1,650 points and 1,680 points, respectively.</li></ul>

The SET Index is expected to gain, with the resistance at 1,630/1,640 points and the support at 1,611/1,605 points.We recommend trading buy on KBANK, MINT and ERW.Technically, the index remains in an uptrend, with the key resistance at 1,650 points and 1,680 points, respectively.

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

<ul>
<li>Analyst meeting came out with positive tone regarding 22E outlook.We maintain BUY rating with TP Bt4.20 derived from DCF valuation (WACC=7% &amp; Terminal growth= 2%) implying 10% discount to 23.1xPE’23.</li>
<li>The company reported net loss of Bt313m in 1Q22 compared to net loss of Bt492m in 1Q21 and net loss of Bt246 in 4Q21 in line with our expectation.</li>
<li>Excluding extra ordinary items, the operational losses declined YoY and QoQ to Bt313m since revenue almost doubled YoY  and increased 4% QoQ to Bt646m after bottoming out in 3Q21.</li>
</ul>


Analyst meeting came out with positive tone regarding 22E outlook.We maintain BUY rating with TP Bt4.20 derived from DCF valuation (WACC=7% &amp; Terminal growth= 2%) implying 10% discount to 23.1xPE’23.
The company reported net loss of Bt313m in 1Q22 compared to net loss of Bt492m in 1Q21 and net loss of Bt246 in 4Q21 in line with our expectation.
Excluding extra ordinary items, the operational losses declined YoY and QoQ to Bt313m since revenue almost doubled YoY  and increased 4% QoQ to Bt646m after bottoming out in 3Q21.


ERW: Operational Losses Continued to Decline in 1Q22

<ul>
<li>We upgrade to BUY rating from SELL rating and raise TP by +75% to Bt4.2 derived from DCF valuation (WACC=7% &amp; Terminal growth= 2%) implying 10% discount to 23.1xPE’23. </li>
<li>We expect ERW to post net loss of Bt296m  against loss of Bt492m in 1Q21 and Bt246 in 4Q21 despite strong  revenue growth.</li>
<li>Strong revenue growth is underpinned by the growth in domestic and international tourism due to the introduction of Test and go scheme and ‘Rao Tiew Duay Kan phase-4’ in 1Q22</li>
</ul>


We upgrade to BUY rating from SELL rating and raise TP by +75% to Bt4.2 derived from DCF valuation (WACC=7% &amp; Terminal growth= 2%) implying 10% discount to 23.1xPE’23. 
We expect ERW to post net loss of Bt296m  against loss of Bt492m in 1Q21 and Bt246 in 4Q21 despite strong  revenue growth.
Strong revenue growth is underpinned by the growth in domestic and international tourism due to the introduction of Test and go scheme and ‘Rao Tiew Duay Kan phase-4’ in 1Q22


ERW: Spike in International Tourists Will Speed up the Recovery

<ul>
<li>Excluding extraordinary items, ERW’s 4Q21 normalized loss was at Bt371m, the eighth consecutive quarter loss, due to operations under EBIT breakeven.</li>
<li>4Q21 negative EBITDA declined to -Bt29m compared to -Bt30m in 4Q20 and -Bt243m in 3Q21 backed by recovering overall hotel operation.</li>
<li>Lockdown easing and launching ‘Rao Tiew Duay Kan phase 3’ program during 4Q21 resulted in improving occupancy rate (ex. Hop INN segment) to 30%  up from 25% in 4Q20 </li>
</ul>


Excluding extraordinary items, ERW’s 4Q21 normalized loss was at Bt371m, the eighth consecutive quarter loss, due to operations under EBIT breakeven.
4Q21 negative EBITDA declined to -Bt29m compared to -Bt30m in 4Q20 and -Bt243m in 3Q21 backed by recovering overall hotel operation.
Lockdown easing and launching ‘Rao Tiew Duay Kan phase 3’ program during 4Q21 resulted in improving occupancy rate (ex. Hop INN segment) to 30%  up from 25% in 4Q20 


<ul>
<li>ERW reported 3Q21 net loss of Bt623m, the seventh consecutive quarter loss due to operation under EBIT breakeven.</li>
<li>Partial lockdown measures caused a reduction in inter-provincial travel and resulted in an unprofitable occupancy rate.</li>
<li>The company recorded negative EBITDA of Bt243m, which was the sixth-consecutive quarter of negative EBITDA.</li>
</ul>


ERW reported 3Q21 net loss of Bt623m, the seventh consecutive quarter loss due to operation under EBIT breakeven.
Partial lockdown measures caused a reduction in inter-provincial travel and resulted in an unprofitable occupancy rate.
The company recorded negative EBITDA of Bt243m, which was the sixth-consecutive quarter of negative EBITDA.


ERW: The Seventh Consecutive Quarter Loss in 3Q21

Thailand

The Erawan Group is a Thai hospitality company that invests in, develops, and operates hotels across luxury, midscale, economy, and budget segments, primarily in Thailand, the Philippines, and Japan. The company also engages in building rental and management, including commercial retail properties and office buildings. It was founded in 1982 and is headquartered in Bangkok, Thailand.

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Erawan Group (ERW TB)

Market Outlook

The SET Index is expected to gain, with the resistance at 1,630/1,640 points and the support at 1,611/1,605 points. We recommend trading buy on...

Krungthai XSpring

ERW: Operational Losses Continued to Decline in 1Q22

Analyst meeting came out with positive tone regarding 22E outlook. We maintain BUY rating with TP Bt4.20 derived from DCF valuation (WACC=7% &...

Pi Securities PCL, Thailand

ERW: Spike in International Tourists Will Speed up the Recovery

We upgrade to BUY rating from SELL rating and raise TP by +75% to Bt4.2 derived from DCF valuation (WACC=7% & Terminal growth= 2%) implying 10%...

Pi Securities PCL, Thailand

ERW: Expect Continued Losses in 2022

Excluding extraordinary items, ERW’s 4Q21 normalized loss was at Bt371m, the eighth consecutive quarter loss, due to operations under EBIT breakeven.

Pi Securities PCL, Thailand

ERW: The Seventh Consecutive Quarter Loss in 3Q21

ERW reported 3Q21 net loss of Bt623m, the seventh consecutive quarter loss due to operation under EBIT breakeven. We maintain SELL rating with a...

Pi Securities PCL, Thailand

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