External broker reports(aggregated public sources), Emkay Global Financial Services Limited

Emkay

External broker reports(aggregated public sources)

Emkay Global Financial Services Limited

Emkay Global Financial Services Ltd. is a leader in the financial services sector, actively creating wealth for our clients for over two decades. 

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Equity Bottom-Up

<ul><li>Honasa remains our favored pick in the sector, on better execution supporting a healthy revenue growth trend/margin expansion; this would lead to valuation re-rating.</li><li>We retain BUY on the stock, with Jun-25E TP of Rs525/sh, on 6x Jun26 sales.</li><li>The stock saw an 11% up-move last week which is likely owing to gradual comfort in the business. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Honasa remains our favored pick in the sector, on better execution supporting a healthy revenue growth trend/margin expansion; this would lead to valuation re-rating.We retain BUY on the stock, with Jun-25E TP of Rs525/sh, on 6x Jun26 sales.The stock saw an 11% up-move last week which is likely owing to gradual comfort in the business. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Honasa Consumer - Play on Execution; Re-Rating on Expected Lines

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.

<ul><li>We expect the company's 2H2OE earnings to remain weak, with the cyclical coal prices and gas price as the primary risks, creating possible downside to our earnings estimate.</li><li>Despite its deep valuation, currently trading at 0.5x 2020E PBV (-1.5 S.D.), we see no positive catalysts; thus, our Hold rating is maintained.</li><li>The company showed a poor performance in 1H20, reporting a core loss of Bt3.1bn and a net loss of Bt802mn.</li></ul>

We expect the company's 2H2OE earnings to remain weak, with the cyclical coal prices and gas price as the primary risks, creating possible downside to our earnings estimate.Despite its deep valuation, currently trading at 0.5x 2020E PBV (-1.5 S.D.), we see no positive catalysts; thus, our Hold rating is maintained.The company showed a poor performance in 1H20, reporting a core loss of Bt3.1bn and a net loss of Bt802mn.

Challenging Earnings Amid Cyclical Prices

<ul><li>We expect fading momentum for the company's earnings in 2H20E, weighed down by Hongsa (due to the extended major overhaul at unit #3 and the planned major overhaul at unit #2), along with the normal low quarter in 4Q.</li><li>BPP reported a 2Q20 NP of Bt680mn (-40% YoY, -30% QoQ).</li><li>The company marked a declining profit contribution from affiliates at Bt806mn in 2Q20 (-41% YoY, -27% QoQ), attributed to 1) a smaller profit contribution from Hongsa (to Bt407mn, -60% YoY and -64% QoQ given the temporary halt to the operation of unit #3 for an extended overhaul (late Apr-Aug); and 2) the loss contribution from Banpu NEXT (engaging in renewable business and energy technology business) of Bt90mn during the early stage of the development phase.</li></ul>

We expect fading momentum for the company's earnings in 2H20E, weighed down by Hongsa (due to the extended major overhaul at unit #3 and the planned major overhaul at unit #2), along with the normal low quarter in 4Q.BPP reported a 2Q20 NP of Bt680mn (-40% YoY, -30% QoQ).The company marked a declining profit contribution from affiliates at Bt806mn in 2Q20 (-41% YoY, -27% QoQ), attributed to 1) a smaller profit contribution from Hongsa (to Bt407mn, -60% YoY and -64% QoQ given the temporary halt to the operation of unit #3 for an extended overhaul (late Apr-Aug); and 2) the loss contribution from Banpu NEXT (engaging in renewable business and energy technology business) of Bt90mn during the early stage of the development phase.

<ul><li>Although the company's earnings growth will be unexciting in 2020-21E, its long-term growth story remains intact for both the core power business (with some deals likely to be concluded within 2Q-4Q20E) and diversified investments in infrastructure systems.</li><li>RATCH reported a 1Q20 NP of Bt1.36bn (-22% YoY, +50% QoQ), including forex loss at the consolidated line (-Bt623mn), forex gain at the affiliates' line (+Bt232mn) and gain from derivatives (+Bt350mn).</li><li>Excluding extraordinary items, the company delivered a core profit of Bt1.4bn (-24% YoY, +129% QoQ), with a stronger profit contribution from affiliates YoY and QoQ, against a fading performance YoY by RATCH itself.</li></ul>

Although the company's earnings growth will be unexciting in 2020-21E, its long-term growth story remains intact for both the core power business (with some deals likely to be concluded within 2Q-4Q20E) and diversified investments in infrastructure systems.RATCH reported a 1Q20 NP of Bt1.36bn (-22% YoY, +50% QoQ), including forex loss at the consolidated line (-Bt623mn), forex gain at the affiliates' line (+Bt232mn) and gain from derivatives (+Bt350mn).Excluding extraordinary items, the company delivered a core profit of Bt1.4bn (-24% YoY, +129% QoQ), with a stronger profit contribution from affiliates YoY and QoQ, against a fading performance YoY by RATCH itself.

Unexciting Earnings Growth; but Potential Growth Ahead

<ul><li>The company's stronger 1Q20 NP was driven by huge forex gain, against a core loss.</li><li>We expect the 2Q20E core earnings to remain weak, weighed down by low coal and gas prices.</li><li>Apart from the coal price as the long-term threat, the gas price will be the primary short-term challenge to BANPU's core earnings, possibly causing the gas business to be a drag on earnings rather than a driver in 2020E.</li></ul>

The company's stronger 1Q20 NP was driven by huge forex gain, against a core loss.We expect the 2Q20E core earnings to remain weak, weighed down by low coal and gas prices.Apart from the coal price as the long-term threat, the gas price will be the primary short-term challenge to BANPU's core earnings, possibly causing the gas business to be a drag on earnings rather than a driver in 2020E.

India

Honasa Consumer is a digital-first beauty and personal care company in India, operating a house-of-brands model that includes Mamaearth, The Derma Co., Aqualogica, and BBlunt. The company offers products across baby care, skincare, haircare, and color cosmetics, utilizing a digital-native approach to reach millennial consumers and expanding into omnichannel distribution. Honasa Consumer is headquartered in Gurugram, India, and was founded in 2016.

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Honasa Consumer (HONASA IN)

Honasa Consumer - Play on Execution; Re-Rating on Expected Lines

Honasa remains our favored pick in the sector, on better execution supporting a healthy revenue growth trend/margin expansion; this would lead to...

Emkay

Challenging Earnings Amid Cyclical Prices

We expect the company's 2H2OE earnings to remain weak, with the cyclical coal prices and gas price as the primary risks, creating possible...

Krungthai XSpring

Challenging Earnings and Growth

We expect fading momentum for the company's earnings in 2H20E, weighed down by Hongsa (due to the extended major overhaul at unit #3 and the...

Krungthai XSpring

Unexciting Earnings Growth; but Potential Growth Ahead

Although the company's earnings growth will be unexciting in 2020-21E, its long-term growth story remains intact for both the core power business...

Krungthai XSpring

Challenging Earnings Amid Cyclical Prices

The company's stronger 1Q20 NP was driven by huge forex gain, against a core loss. We expect the 2Q20E core earnings to remain weak, weighed down...

Krungthai XSpring

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