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.

Thematic (Sector/Industry)

<ul><li>We recommend buying MEGA and MAJOR.</li><li>MEGA’s share price has rebounded by more than 5% over the past two weeks on the market’s expectations for a limited impact from Myanmar’s government ordering the suspension of loan repayments in foreign currencies.</li><li>The firm’s 2022E earnings are forecast to grow 8.68% YoY to Bt2,116mn, driven by the depreciation of the baht, the development of new projects and expansion to new markets with low competition.</li></ul>

We recommend buying MEGA and MAJOR.MEGA’s share price has rebounded by more than 5% over the past two weeks on the market’s expectations for a limited impact from Myanmar’s government ordering the suspension of loan repayments in foreign currencies.The firm’s 2022E earnings are forecast to grow 8.68% YoY to Bt2,116mn, driven by the depreciation of the baht, the development of new projects and expansion to new markets with low competition.

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

Equity Bottom-Up

<ul>
<li>Maintain BUY rating for MAJOR with target price of Bt23.70. We expect the company to post Bt95m core profit in 2Q22,(vs. losses of Bt83m in 1Q22 and Bt240m in 2Q21)</li>
<li>Impressive recovery in profit in 2Q22 Expect the company to report2Q22net profit at Bt165m,four-quarter high.Stripping out extra gain from fire insurance claim recognized in 2Q22,core profit should be at Bt95m   </li>
<li>Revenue is expected to hit 10-quarter high at Bt1.6bn following an increase in traffic at theatres(estimated at around 5.5 million vs. 2.8 million in 1Q22 and 0.9 million in 2Q21)</li>
</ul>


Maintain BUY rating for MAJOR with target price of Bt23.70. We expect the company to post Bt95m core profit in 2Q22,(vs. losses of Bt83m in 1Q22 and Bt240m in 2Q21)
Impressive recovery in profit in 2Q22 Expect the company to report2Q22net profit at Bt165m,four-quarter high.Stripping out extra gain from fire insurance claim recognized in 2Q22,core profit should be at Bt95m   
Revenue is expected to hit 10-quarter high at Bt1.6bn following an increase in traffic at theatres(estimated at around 5.5 million vs. 2.8 million in 1Q22 and 0.9 million in 2Q21)


<ul>
<li>We expect the company’s operating performance to improve gradually from the bottom in 3Q21as there are number of quality movies to be released after been postponed upon restricted measures induced </li>
<li>Expect the company to report Bt47m net profit in 4Q21, seven-quarter high in terms of core business operation</li>
<li>EBITDA in 4Q21 is expected to turn positive as it driven by pent-up demand after lockdown together with impressive ticket sales from Spider-Man: No Way Home.</li>
</ul>


We expect the company’s operating performance to improve gradually from the bottom in 3Q21as there are number of quality movies to be released after been postponed upon restricted measures induced 
Expect the company to report Bt47m net profit in 4Q21, seven-quarter high in terms of core business operation
EBITDA in 4Q21 is expected to turn positive as it driven by pent-up demand after lockdown together with impressive ticket sales from Spider-Man: No Way Home.


MAJOR: Expect EBITDA to Turn Positive from 4Q21 and Onward to 2022

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>According to the <a href="https://investor.majorcineplex.com/en/business-characteristics/strategic-invesments" target="_blank" rel="noopener">website</a> of Thailand's largest cinema operator <a href="https://www.smartkarma.com/entities/major-cineplex-group-pcl" target="_blank" data-smartkarma-citation="entities:16662:1" rel="noopener">Major Cineplex Group (MAJOR TB)</a>'s<a href="https://investor.majorcineplex.com/en/business-characteristics/strategic-invesments" target="_blank" rel="noopener"></a>, the rationale for its investment in shopping mall operator <a href="https://www.smartkarma.com/entities/siam-future-development-pcl" target="_blank" data-smartkarma-citation="entities:4373:1" rel="noopener">Siam Future Development (SF TB)</a> (SFD) was synergistic. SFD "<em>is an anchor tenant that generates traffic to the lifestyle malls</em>". </p>
<p>MAJOR initially acquired 77.8mn shares in SFD in 2003 at Bt1.70/share. MAJOR held <a href="https://investor.siamfuture.com/misc/ar/20170308-sf-ar2016-en-01.pdf" target="_blank" rel="noopener">24.89%</a> (422.2mn shares) in 2016 ahead of a Tender Offer (at <a href="http://capital.sec.or.th/webapp/corp_fin/datafile/TO/0676000048247-42016-12-20e01.pdf?ts=1499458214" target="_blank" rel="noopener">Bt6.20/share</a>), <a href="https://investor.siamfuture.com/misc/ar/20190311-sf-ar2018-en.pdf" target="_blank" rel="noopener">26.25%</a> in 2017, 28.09% in 2018 &amp; 2019, and 29.13% as at the 31 Dec <a href="https://investor.siamfuture.com/misc/ar/20210525-sp-ar2020-en.pdf" target="_blank" rel="noopener">2020</a>. It currently holds 647.158mn shares or 30.36%.</p>
<p>On the 5 July, MAJOR's board <a href="https://major.listedcompany.com/newsroom/050720211745440725E.pdf" target="_blank" rel="noopener">approved</a> the entering of a MOU with <a href="https://www.smartkarma.com/entities/central-pattana-pcl-0b7fb113-16e1-4535-be8b-02dce5bbcd92" target="_blank" data-smartkarma-citation="entities:17188:1" rel="noopener">Central Pattana Pub (CPN TB)</a> in relation to its shares in SFD, at a price of Bt12/share.</p>
<p>An IFA was appointed to assess the sale and its opinion on the <a href="https://major.listedcompany.com/newsroom/060820211832280109E.pdf" target="_blank" rel="noopener">19 July</a>, concluded the "<em>Transaction is reasonable with price and conditions that are fair</em>".</p>
<p>A SPA was <a href="https://major.listedcompany.com/newsroom/250820211847500685E.pdf" target="_blank" rel="noopener">entered into</a> yesterday with an expected completion on the 30 August. </p>
<p>In Thailand, the obligation to make a mandatory offer is triggered when an acquirer obtains shares of the target company of more than 25%, 50%, or 75% of the total voting rights of the target company. </p>
<p>Therefore CPN is required to make a tender offer for the remaining shares in SFD at the same price of Bt12/each upon the completion of the SPA.  <strong>A mandatory tender offer must be unconditional. </strong></p>
<p>SFD shares gained ~40% in the month prior to the 5 July announcement, on evident news leakage. Bt12/share is also a lifetime high. I would not be surprised if the tender offer leads to a subsequent delisting offer from CPN.</p>
<p>More below the fold.</p>
</div>


According to the website of Thailand's largest cinema operator Major Cineplex Group (MAJOR TB)'s, the rationale for its investment in shopping mall operator Siam Future Development (SF TB) (SFD) was synergistic. SFD "is an anchor tenant that generates traffic to the lifestyle malls". 
MAJOR initially acquired 77.8mn shares in SFD in 2003 at Bt1.70/share. MAJOR held 24.89% (422.2mn shares) in 2016 ahead of a Tender Offer (at Bt6.20/share), 26.25% in 2017, 28.09% in 2018 &amp; 2019, and 29.13% as at the 31 Dec 2020. It currently holds 647.158mn shares or 30.36%.
On the 5 July, MAJOR's board approved the entering of a MOU with Central Pattana Pub (CPN TB) in relation to its shares in SFD, at a price of Bt12/share.
An IFA was appointed to assess the sale and its opinion on the 19 July, concluded the "Transaction is reasonable with price and conditions that are fair".
A SPA was entered into yesterday with an expected completion on the 30 August. 
In Thailand, the obligation to make a mandatory offer is triggered when an acquirer obtains shares of the target company of more than 25%, 50%, or 75% of the total voting rights of the target company. 
Therefore CPN is required to make a tender offer for the remaining shares in SFD at the same price of Bt12/each upon the completion of the SPA.  A mandatory tender offer must be unconditional. 
SFD shares gained ~40% in the month prior to the 5 July announcement, on evident news leakage. Bt12/share is also a lifetime high. I would not be surprised if the tender offer leads to a subsequent delisting offer from CPN.
More below the fold.


Siam Future Development (SF TB): Central Pattana MGO As MAJOR Cineplex Exits

<p><strong>We maintain HOLD rating with new 1H23E target price at Bt19.80/share, from Bt25.50/share (-22%), derived from 19.9x PE’1H23E, which is its 5-year trading average.</strong></p><div>• MAJOR had net losses in 2Q21 at B218m, better than net losses of Bt475m in 2Q20 but worse than net losses of Bt120m in 1Q21.</div><div></div><div>• Well expenses control buoyed overall performance from Covid lockdown.</div><div></div><div>• The losses should still incur in 3Q21 given the lockdown situation before recover in 4Q21 on the expectation of cinemas reopening</div><div></div><div>• MAJOR will diversify business to content creator, serving to streaming platform.</div><div></div><div>• We revised down 2021E recurring earnings to losses and cut net profit forecast in 22-23E by 33% and 17%, respectively</div>

We maintain HOLD rating with new 1H23E target price at Bt19.80/share, from Bt25.50/share (-22%), derived from 19.9x PE’1H23E, which is its 5-year trading average.• MAJOR had net losses in 2Q21 at B218m, better than net losses of Bt475m in 2Q20 but worse than net losses of Bt120m in 1Q21.• Well expenses control buoyed overall performance from Covid lockdown.• The losses should still incur in 3Q21 given the lockdown situation before recover in 4Q21 on the expectation of cinemas reopening• MAJOR will diversify business to content creator, serving to streaming platform.• We revised down 2021E recurring earnings to losses and cut net profit forecast in 22-23E by 33% and 17%, respectively

Thailand

Major Cineplex Group Public Company Limited operates movie theater chain under Major Cineplex name, and bowling alley chain under Major Bowl name. The Company also provides theater advertising services and concession stand rentals in its movie and bowling complexes.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Major Cineplex Group (MAJOR TB)

Big Cap Tactical Picks - Aug 3, 2022

MEGA’s share price has rebounded by more than 5% over the past two weeks on the market’s expectations for a limited impact from Myanmar’s government

Krungthai XSpring

MAJOR : Still in Recovery Path

Maintain BUY rating for MAJOR with target price of Bt23.70. We expect the company to post Bt95m core profit in 2Q22, (vs. losses of Bt83m in 1Q22...

Pi Securities PCL, Thailand

MAJOR: Expect EBITDA to Turn Positive from 4Q21 and Onward to 2022

We expect the company’s operating performance to improve gradually from the bottom in 3Q21 as there are number of quality movies to be released...

Pi Securities PCL, Thailand

Siam Future Development (SF TB): Central Pattana MGO As MAJOR Cineplex Exits

This is a done deal. Just a question of timing. At Bt11.70/share, you're looking at a gross/annualised spread of 20.6%/10.9%, assuming late...

David Blennerhassett

MAJOR: Taking Longer to Recover

We maintain HOLD rating with new 1H23E target price at Bt19.80/share, from Bt25.50/share (-22%), derived from 19.9x PE’1H23E, which is its 5-year...

Pi Securities PCL, Thailand

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)