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>We recommend BUY for M supported by three main reason:1) a strong earnings recovery outlook in 2022-24,2) net cash position with upside from new M&amp;A deal and LCS franchise fees</li>
<li>Earnings is expected to turn positive and strongly QoQ improvement in 2Q22 We expect 2Q22 net profit to be at Bt444m (+64%QoQ), recovery from a loss of Bt99m in 2Q21</li>
<li>Rising food costs are manageable   Most of costs are raw material costs and the major portion of food cost are pork and poultry.</li>
</ul>


We recommend BUY for M supported by three main reason:1) a strong earnings recovery outlook in 2022-24,2) net cash position with upside from new M&amp;A deal and LCS franchise fees
Earnings is expected to turn positive and strongly QoQ improvement in 2Q22 We expect 2Q22 net profit to be at Bt444m (+64%QoQ), recovery from a loss of Bt99m in 2Q21
Rising food costs are manageable   Most of costs are raw material costs and the major portion of food cost are pork and poultry.


<ul>
<li>We reiterate our BUY rating for M with a target price of Bt61.0 based on 25xPE’22E, Asia ex-Japan consumer staple sector.</li>
<li>We expect M to report net profit of Bt393m in 1Q22 (+343%YoY, -2%QoQ) driven by a positive same-store-sales-growth (SSSG) in three main brands (MK, Yayoi, and Laem Charoen Seafood) </li>
<li>We forecast earnings to bounce back to Bt2.2bn in 2022 and continue to grow at 14%CAGR(2023-24) supported by 1) solid recovery in SSSG after resuming dine-in services together with restoring </li>
</ul>


We reiterate our BUY rating for M with a target price of Bt61.0 based on 25xPE’22E, Asia ex-Japan consumer staple sector.
We expect M to report net profit of Bt393m in 1Q22 (+343%YoY, -2%QoQ) driven by a positive same-store-sales-growth (SSSG) in three main brands (MK, Yayoi, and Laem Charoen Seafood) 
We forecast earnings to bounce back to Bt2.2bn in 2022 and continue to grow at 14%CAGR(2023-24) supported by 1) solid recovery in SSSG after resuming dine-in services together with restoring 


M: Expect Strong Earnings Recovery in 1Q22

<ul>
<li>Yesterday analyst meeting came out with a positive tone. We reiterate our BUY rating for M with a target price of Bt61.0 based on 25xPE’22E,Asia ex-Japan consumer staple sector average</li>
<li>Management target same-stores-sales-growth (SSSG) at above 30% in 2022 from -15% in 2021.SSSG has strongly recovered at +15% in Jan-Feb 2022 supported by resuming dine-in services together with restoring consumer </li>
<li>After resuming dine-in services,GPM recovered to 66.9% in 4Q21.We believe GPM to increase to 66% in 2022E from 64.1% in 2021 supported by a higher revenue contribution from dine-in service</li>
</ul>


Yesterday analyst meeting came out with a positive tone. We reiterate our BUY rating for M with a target price of Bt61.0 based on 25xPE’22E,Asia ex-Japan consumer staple sector average
Management target same-stores-sales-growth (SSSG) at above 30% in 2022 from -15% in 2021.SSSG has strongly recovered at +15% in Jan-Feb 2022 supported by resuming dine-in services together with restoring consumer 
After resuming dine-in services,GPM recovered to 66.9% in 4Q21.We believe GPM to increase to 66% in 2022E from 64.1% in 2021 supported by a higher revenue contribution from dine-in service


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>Dominus Capital has lobbed a voluntary conditional cash offer of S$0.77 per share. The offer price represents a 15.8% premium to the unaffected price of A$0.665 (28 December).</li>
<li>The offer is conditional on the offeror and concert parties hold not less than 90% of the voting rights. Irrecovables represent 77.41% of outstanding shares.</li>
<li>56% of shareholders ex. irrecovables are required to accept the offer to meet the 90% threshold. While the offer is a modest premium to historical share prices, it is feasible. </li>
</ul>


Dominus Capital has lobbed a voluntary conditional cash offer of S$0.77 per share. The offer price represents a 15.8% premium to the unaffected price of A$0.665 (28 December).
The offer is conditional on the offeror and concert parties hold not less than 90% of the voting rights. Irrecovables represent 77.41% of outstanding shares.
56% of shareholders ex. irrecovables are required to accept the offer to meet the 90% threshold. While the offer is a modest premium to historical share prices, it is feasible. 


Koufu’s Voluntary Conditional Offer by Founding Shareholders

<ul>
<li>We anticipate strong earnings recovery along with slowdown in number of COVID-19 cases.We reiterate BUY rating for M with a target price of Bt61.0 based on 25xPE’22E Asia ex-Japan consumer</li>
<li>We expect M to report net profit of Bt224m (-36%YoY) in 4Q21 from a loss in 2Q21-3Q21 supported by 1) recovery in SSSG after lockdown while resuming dine-in services together </li>
<li>Same-Stores-Sales-Growth (SSSG) in three main brands are likely to recover in 4Q21.</li>
</ul>


We anticipate strong earnings recovery along with slowdown in number of COVID-19 cases.We reiterate BUY rating for M with a target price of Bt61.0 based on 25xPE’22E Asia ex-Japan consumer
We expect M to report net profit of Bt224m (-36%YoY) in 4Q21 from a loss in 2Q21-3Q21 supported by 1) recovery in SSSG after lockdown while resuming dine-in services together 
Same-Stores-Sales-Growth (SSSG) in three main brands are likely to recover in 4Q21.


M: Expect 4Q21 Performance to Turn Profit

Thailand

MK Restaurant Group Public Company Limited engages in the sale of food and beverages through restaurants, primarily operating sukiyaki and Japanese restaurants under brands like MK, Yayoi, Miyazaki, and Hakata. The company also provides training services and manufactures and distributes food products. It was founded in 1962 and is headquartered in Bangkok, Thailand.

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MK Restaurant Group (M TB)

M : Time to Harvest

We recommend BUY for M supported by three main reason: 1) a strong earnings recovery outlook in 2022-24, 2) net cash position with upside from new...

Pi Securities PCL, Thailand

M: Expect Strong Earnings Recovery in 1Q22

We reiterate our BUY rating for M with a target price of Bt61.0 based on 25xPE’22E, Asia ex-Japan consumer staple sector.

Pi Securities PCL, Thailand

M: Positive Outlook for 2022-24 Earnings

Yesterday analyst meeting came out with a positive tone. We reiterate our BUY rating for M with a target price of Bt61.0 based on 25xPE’22E, Asia...

Pi Securities PCL, Thailand

Koufu’s Voluntary Conditional Offer by Founding Shareholders

Koufu has received a voluntary conditional cash offer of S$0.77 per share. The offer is conditional meeting the 90% voting threshold. Despite the...

Arun George

M: Expect 4Q21 Performance to Turn Profit

We anticipate strong earnings recovery along with slowdown in number of COVID-19 cases. We reiterate BUY rating for M with a target price of Bt61.0...

Pi Securities PCL, Thailand

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