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

GFPT Public Company Limited / Equity Bottom-Up

<ul><li>The 1Q24 core profit beat the forecast by 20% due to a better- than-expected profit contribution from affiliates on the back of increased exports of processed chicken.</li><li>We therefore maintain our Neutral rating (FV = Bt12.17, based on a required rate of return of 9.51%).</li><li>The valuation metrics suggest neutral views on the short-term fundamentals and long-term growth prospects. Meanwhile, the tactical upside to the share price is limited.</li></ul>

The 1Q24 core profit beat the forecast by 20% due to a better- than-expected profit contribution from affiliates on the back of increased exports of processed chicken.We therefore maintain our Neutral rating (FV = Bt12.17, based on a required rate of return of 9.51%).The valuation metrics suggest neutral views on the short-term fundamentals and long-term growth prospects. Meanwhile, the tactical upside to the share price is limited.

GFPT -1Q24 Core Profit Grew 86% YoY and 9% QoQ, Better than Expected

Thematic (Sector/Industry)

<ul><li>Technically, the SET Index is expected to test the resistance at 1,366/1,374 points (10-day EMA/25-day EMA), with the support at 1,350/1,340 points.</li><li>Overall, the index has been moving in the downchannel range of 1,320-1,410 points. In the short term, the index is rebounding after a sharp four-day decline of over 80 points last week.</li><li>A sell signal could emerge if the index fails to break through the resistance at 1,366/1,374 points. </li></ul>

Technically, the SET Index is expected to test the resistance at 1,366/1,374 points (10-day EMA/25-day EMA), with the support at 1,350/1,340 points.Overall, the index has been moving in the downchannel range of 1,320-1,410 points. In the short term, the index is rebounding after a sharp four-day decline of over 80 points last week.A sell signal could emerge if the index fails to break through the resistance at 1,366/1,374 points. 

<ul><li>KTX maintains a Neutral rating (FV = Bt12.17, based on a required return of 9.51%).</li><li>The valuation metrics suggest a neutral view on the short-term fundamentals and the long-term growth prospects, while the tactical upside is limited.</li><li>Among meat operators, we view that GFPT’s sole broiler business is more <span style="font-size: var(--content-font-size);">attractive compared to those who are exposed to downside risk </span>from the swine business, which has been pressured by weak swine prices. We expect GFPT’s 1Q24E earnings to grow YoY.</li></ul>

KTX maintains a Neutral rating (FV = Bt12.17, based on a required return of 9.51%).The valuation metrics suggest a neutral view on the short-term fundamentals and the long-term growth prospects, while the tactical upside is limited.Among meat operators, we view that GFPT’s sole broiler business is more attractive compared to those who are exposed to downside risk from the swine business, which has been pressured by weak swine prices. We expect GFPT’s 1Q24E earnings to grow YoY.

GFPT -Stable Broiler Price, Lower Costs; 1Q24E Earnings Growth at 55% YoY

<ul><li>The Thai swine industry is anticipated to face continued challenges this year, though not as severe as the difficulties encountered in 2023.</li><li>During that period, major operators experienced losses due to rising costs and declining prices, exacerbated by an influx of illegal swine supply and further compounded by sluggish consumption.</li><li>In 1H24E, domestic swine supply is projected to stabilize, with excess supply gradually diminishing.</li></ul>

The Thai swine industry is anticipated to face continued challenges this year, though not as severe as the difficulties encountered in 2023.During that period, major operators experienced losses due to rising costs and declining prices, exacerbated by an influx of illegal swine supply and further compounded by sluggish consumption.In 1H24E, domestic swine supply is projected to stabilize, with excess supply gradually diminishing.

Meat Sector – Thai Swine Prices to Recover in 2H24E

<ul><li>In January 2024, Thai export value demonstrated significant growth, surpassing expectations with a YoY increase of 10%.</li><li>This robust performance contrasts with December 2023's growth of 4.7% YoY and the NESDC’s export growth projection for this year at 2.9%.</li><li>The healthy growth can be attributed to stronger-than-anticipated demand from trading partners, both in the primary markets — such as the US, which experienced a YoY increase of 13.7% compared to 0.3% in December — and secondary markets like Hong Kong and Russia. </li></ul>

In January 2024, Thai export value demonstrated significant growth, surpassing expectations with a YoY increase of 10%.This robust performance contrasts with December 2023's growth of 4.7% YoY and the NESDC’s export growth projection for this year at 2.9%.The healthy growth can be attributed to stronger-than-anticipated demand from trading partners, both in the primary markets — such as the US, which experienced a YoY increase of 13.7% compared to 0.3% in December — and secondary markets like Hong Kong and Russia. 

Thailand

GFPT Public Company Limited produces frozen chicken parts and distributes its products under GFPT, Common Food, and Nichirei Core.  The Company sells its products to domestic and export markets.

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GFPT Public Company Limited (GFPT TB)

GFPT -1Q24 Core Profit Grew 86% YoY and 9% QoQ, Better than Expected

The 1Q24 core profit beat the forecast by 20% due to a better- than-expected profit contribution from affiliates on the back of increased exports...

Krungthai XSpring

KTX Zoom - APRIL 24, 2024

Technically, the SET Index is expected to test the resistance at 1,366/1,374 points (10-day EMA/25-day EMA), with the support at 1,350/1,340 points.

Krungthai XSpring

GFPT -Stable Broiler Price, Lower Costs; 1Q24E Earnings Growth at 55% YoY

The valuation metrics suggest a neutral view on the short-term fundamentals and the long-term growth prospects, while the tactical upside is limited.

Krungthai XSpring

Meat Sector – Thai Swine Prices to Recover in 2H24E

The Thai swine industry is anticipated to face continued challenges this year, though not as severe as the difficulties encountered in 2023.

Krungthai XSpring

Economic Update – Exports & Imports

This robust performance contrasts with December 2023's growth of 4.7% YoY and the NESDC’s export growth projection for this year at 2.9%.

Krungthai XSpring

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