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>HANA saw a YoY and QoQ rebound in core earnings in 1Q24.</li><li>The results were slightly below our expectations, but we still believe they point to a positive direction in terms of HANA’s gross margin recovery in FY2024E.</li><li>We maintain our fair value of Bt42.00 but downgrade our recommendation to Outperform, after the share price rose by roughly 6% since our last report. </li></ul>

HANA saw a YoY and QoQ rebound in core earnings in 1Q24.The results were slightly below our expectations, but we still believe they point to a positive direction in terms of HANA’s gross margin recovery in FY2024E.We maintain our fair value of Bt42.00 but downgrade our recommendation to Outperform, after the share price rose by roughly 6% since our last report. 

Hana Microelectronics - Upside Priced in for FY2024 but Remain Bullish for FY2025

<ul><li>We initiate our coverage on HANA with a Buy rating and a FY2024E fair value of Bt42.00, based on a required rate of return of 5.83%.</li><li>We expect that the 2024E core earnings will stand at Bt2.2bn (+23% YoY, +14% YoY in terms of core EPS, after factoring in dilution), mainly driven by gross margin recovery from improvements in its Korean PMS operations and a slightly better utilization rate.</li><li>HANA’s core earnings should grow from the current low base at a 21% CAGR between 2023-26E on an overall demand upswing in its PCBA and IC businesses, increasing silicon carbide (SiC) sales, and an improving margin profile.</li></ul>

We initiate our coverage on HANA with a Buy rating and a FY2024E fair value of Bt42.00, based on a required rate of return of 5.83%.We expect that the 2024E core earnings will stand at Bt2.2bn (+23% YoY, +14% YoY in terms of core EPS, after factoring in dilution), mainly driven by gross margin recovery from improvements in its Korean PMS operations and a slightly better utilization rate.HANA’s core earnings should grow from the current low base at a 21% CAGR between 2023-26E on an overall demand upswing in its PCBA and IC businesses, increasing silicon carbide (SiC) sales, and an improving margin profile.

Hana Microelectronics - Improved Operations to Lead to a Core Earnings Rebound

Cross Asset Strategy

<ul><li>Although many Asian bourses bounced up, the SET sank sharply amid concerns that the Fed would maintain interest rates at a high level, alongside the surge of US bond yields, the posting of XD and escalating tensions in the Middle East.</li><li>As a result, a selling force quickly targeted large cap stocks, and foreign investors kept selling heavily, causing the index to get closer to the previous low at 1,350  points.</li><li>The index reverted to its previous sideways movement, opening a gap down and forming two consecutive black candlesticks.</li></ul>

Although many Asian bourses bounced up, the SET sank sharply amid concerns that the Fed would maintain interest rates at a high level, alongside the surge of US bond yields, the posting of XD and escalating tensions in the Middle East.As a result, a selling force quickly targeted large cap stocks, and foreign investors kept selling heavily, causing the index to get closer to the previous low at 1,350  points.The index reverted to its previous sideways movement, opening a gap down and forming two consecutive black candlesticks.

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>We downgrade to HOLD and lower our TP to Bt47.75(-9% from previous TP),based on 18.4xPE’23E (average of 5-year trading history). Analyst meeting came with a slightly positive tone. Management expects</li>
<li>Analyst meeting details Management remains cautious of the recession further impacting the mobile.WhileRFID and automotive segments are currently stable they expect high interest rates will impact demand in those segments</li>
<li>However,management believes that the additional capacity in their U.S.factory and the new Korean factory will help offset the downturn from the recession as production will begin to ramp-up by 1Q23.</li>
</ul>


We downgrade to HOLD and lower our TP to Bt47.75(-9% from previous TP),based on 18.4xPE’23E (average of 5-year trading history). Analyst meeting came with a slightly positive tone. Management expects
Analyst meeting details Management remains cautious of the recession further impacting the mobile.WhileRFID and automotive segments are currently stable they expect high interest rates will impact demand in those segments
However,management believes that the additional capacity in their U.S.factory and the new Korean factory will help offset the downturn from the recession as production will begin to ramp-up by 1Q23.


HANA : Recession Should Impact 23E Earnings

<ul>
<li>We maintain BUY with TP of Bt52.50 based on 21.3xPE’1H23E (+1S.D. of 10-year trading history).3Q22 earnings was at Bt417m(-26% YoY, +71% QoQ)due to large FX and derivative losses worth Bt423m</li>
<li>3Q22 net profit suffered but core remains intact Its 3Q22 earnings was at Bt417m (-26% YoY,+71% QoQ) due to large FX and derivative losses worth Bt423m. These losses are likely </li>
<li>Stripping out FX and derivative losses, core profit stood at Bt840m (+20% YoY, +41% QoQ).Both YoY and QoQ increase was led by revenue growth, but QoQ growth was further supported</li>
</ul>


We maintain BUY with TP of Bt52.50 based on 21.3xPE’1H23E (+1S.D. of 10-year trading history).3Q22 earnings was at Bt417m(-26% YoY, +71% QoQ)due to large FX and derivative losses worth Bt423m
3Q22 net profit suffered but core remains intact Its 3Q22 earnings was at Bt417m (-26% YoY,+71% QoQ) due to large FX and derivative losses worth Bt423m. These losses are likely 
Stripping out FX and derivative losses, core profit stood at Bt840m (+20% YoY, +41% QoQ).Both YoY and QoQ increase was led by revenue growth, but QoQ growth was further supported


HANA : 3Q22 Earnings Impacted by FX Items

Thailand

Hana Microelectronics Public Company Limited is an electronics manufacturing service company.  The Company manufactures electronic components on behalf of its customers for shipment to them or their customers.

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Hana Microelectronics (HANA TB)

Hana Microelectronics - Upside Priced in for FY2024 but Remain Bullish for FY2025

The results were slightly below our expectations, but we still believe they point to a positive direction in terms of HANA’s gross margin recovery...

Krungthai XSpring

Hana Microelectronics - Improved Operations to Lead to a Core Earnings Rebound

We initiate our coverage on HANA with a Buy rating and a FY2024E fair value of Bt42.00, based on a required rate of return of 5.83%.

Krungthai XSpring

Technical Analysis - APRIL 18, 2024

Although many Asian bourses bounced up, the SET sank sharply amid concerns that the Fed would maintain interest rates at a high level, alongside...

Krungthai XSpring

HANA : Recession Should Impact 23E Earnings

We downgrade to HOLD and lower our TP to Bt47.75 (-9% from previous TP), based on 18.4xPE’23E (average of 5-year trading history). Analyst meeting...

Pi Securities PCL, Thailand

HANA : 3Q22 Earnings Impacted by FX Items

We maintain BUY with TP of Bt52.50 based on 21.3xPE’1H23E (+1S.D. of 10-year trading history). 3Q22 earnings was at Bt417m (-26% YoY, +71% QoQ) due...

Pi Securities PCL, Thailand

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