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>We expect KCE to report a 2Q25E net profit of Bt221mn (-65% YoY, +23% QoQ), recovering from a low base in the previous quarter but still showing a sharp YoY decline due to the stronger baht and continued weakness in sales.</li><li>We maintain an Underperform rating on KCE, with a fair value of Bt13.50 based on a required return of 8.18%, equivalent to a P/E ratio of 13.6x (-1.5 S.D.).</li><li>We believe KCE’s share price has risen excessively relative to its future risks</li></ul>

We expect KCE to report a 2Q25E net profit of Bt221mn (-65% YoY, +23% QoQ), recovering from a low base in the previous quarter but still showing a sharp YoY decline due to the stronger baht and continued weakness in sales.We maintain an Underperform rating on KCE, with a fair value of Bt13.50 based on a required return of 8.18%, equivalent to a P/E ratio of 13.6x (-1.5 S.D.).We believe KCE’s share price has risen excessively relative to its future risks

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>Two thirds of the way through the review period, we see one change for 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">SET 50 Index</a> in December with <a href="https://www.smartkarma.com/entities/kce-electronics-pcl" target="_blank" data-smartkarma-citation="entities:1892:1" rel="noopener">KCE Electronics (KCE TB)</a> replacing <a href="https://www.smartkarma.com/entities/ngern-tid-lor-pcl" target="_blank" data-smartkarma-citation="entities:31103:1" rel="noopener">Ngern Tid Lor (TIDLOR TB)</a>. </li>
<li>There is one close change where <a href="https://www.smartkarma.com/entities/i-tail-corp-pcl" target="_blank" data-smartkarma-citation="entities:36428:1" rel="noopener">I-TAIL (ITC TB)</a> could replace <a href="https://www.smartkarma.com/entities/srisawad-corp-pcl" target="_blank" data-smartkarma-citation="entities:9480:1" rel="noopener">Srisawad Power 1979 (SAWAD TB)</a> in the index.</li>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand (DELTA TB)</a> is unlikely to be deleted while <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> fails liquidity and is unlikely to be added.</li>
</ul>


Two thirds of the way through the review period, we see one change for the SET 50 Index in December with KCE Electronics (KCE TB) replacing Ngern Tid Lor (TIDLOR TB). 
There is one close change where I-TAIL (ITC TB) could replace Srisawad Power 1979 (SAWAD TB) in the index.

Delta Electronics Thailand (DELTA TB) is unlikely to be deleted while Berli Jucker (BJC TB) fails liquidity and is unlikely to be added.


SET50 Index Rebalance Preview: One High Probability Change; Another One Is Close

<ul><li>KCE reported a 1Q25 core profit of Bt180mn (-57% YoY, -29% QoQ), the lowest in five years and 38% below market expectations, due to the lowest gross profit margin (GPM) in 14 years.</li><li>In the near term, we believe the significantly weaker-than-expected performance may put pressure on the share price over the next two weeks.</li><li>We are currently reviewing our earnings projection, rating, and target price for KCE.</li></ul>

KCE reported a 1Q25 core profit of Bt180mn (-57% YoY, -29% QoQ), the lowest in five years and 38% below market expectations, due to the lowest gross profit margin (GPM) in 14 years.In the near term, we believe the significantly weaker-than-expected performance may put pressure on the share price over the next two weeks.We are currently reviewing our earnings projection, rating, and target price for KCE.

<ul><li>We downgrade our rating to Neutral (previously Buy).</li><li>The stock’s valuation attractiveness in terms of the fundamentals, with the stock price implying 25.3% upside to its fair value, is overshadowed by weaker profit growth compared to peers.</li><li>Meanwhile, the tactical view remains neutral.</li></ul>

We downgrade our rating to Neutral (previously Buy).The stock’s valuation attractiveness in terms of the fundamentals, with the stock price implying 25.3% upside to its fair value, is overshadowed by weaker profit growth compared to peers.Meanwhile, the tactical view remains neutral.

KCE Electronics - 4Q24 Core Profit Remained Slow

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The SET50 index tracks the performance of the top 50 largest and most liquid names listed in the Stock Exchange of Thailand (SET). </li>
<li>In this insight, we take a look at the potential ADDs/DELs for SET during the index rebal event in June 2024.</li>
<li>There could be three ADDs and three DELs as things stand. There are a couple of names lurking close to the border too.</li>
</ul>


The SET50 index tracks the performance of the top 50 largest and most liquid names listed in the Stock Exchange of Thailand (SET). 
In this insight, we take a look at the potential ADDs/DELs for SET during the index rebal event in June 2024.
There could be three ADDs and three DELs as things stand. There are a couple of names lurking close to the border too.


Quiddity Leaderboard SET50 Jun 24: Multiple Changes Possible

Thailand

KCE Electronics Public Company Limited and its subsidiaries manufacture and export single-layered, multi-layered, and double-sided printed circuit boards (PCBs) under its KCE trademark.  Multi-layered PCBs are used mainly in high technology equipment and high precision instruments.  Double-sided PCBs are used largely in telecommunication and computing equipment.

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KCE Electronics PCL (KCE TB)

KCE Electronics - High Risk, High Return

We expect KCE to report a 2Q25E net profit of Bt221mn (-65% YoY, +23% QoQ), recovering from a low base in the previous quarter but still showing a...

Krungthai XSpring

SET50 Index Rebalance Preview: One High Probability Change; Another One Is Close

KCE could replace TIDLOR in the SET50 in Dec. ITC is a close add and could replace SAWAD. The impact on the stocks is big given the index is...

Brian Freitas

KCE Electronics - GPM Marks 14-Year-Low

KCE reported a 1Q25 core profit of Bt180mn (-57% YoY, -29% QoQ), the lowest in five years and 38% below market expectations, due to the lowest...

Krungthai XSpring

KCE Electronics - 4Q24 Core Profit Remained Slow

The stock’s valuation attractiveness in terms of the fundamentals, with the stock price implying 25.3% upside to its fair value, is overshadowed by...

Krungthai XSpring

Quiddity Leaderboard SET50 Jun 24: Multiple Changes Possible

Ngern Tid Lor, I-TAIL, and Bangkok Chain Hospital could be added and Com7, Srisawad Corp , and KCE Electronics could be deleted according to the...

Janaghan Jeyakumar, CFA

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