Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

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Thai Equity - Bottom-up - Equities

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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 recommendation for M with a target price of Bt64. A strong earnings recovery outlook in restaurant with an additional catalyst from international tourist arrivals.</li>
<li>Solid SSSG amid rising inflation SSSG in three main brands remain solid at +170%YoY in July 2022 and SSSG is discount at 10-15% from pre-COVID level in Aug 2022 supported </li>
<li>Insignificant impact from minimum wage adjustment The restaurant business is a labor-intensive industry which depends very much on employees. Cost of employee accounted for 48%-52% of operating expense during 2019-2021.</li>
</ul>


Maintain BUY recommendation for M with a target price of Bt64. A strong earnings recovery outlook in restaurant with an additional catalyst from international tourist arrivals.
Solid SSSG amid rising inflation SSSG in three main brands remain solid at +170%YoY in July 2022 and SSSG is discount at 10-15% from pre-COVID level in Aug 2022 supported 
Insignificant impact from minimum wage adjustment The restaurant business is a labor-intensive industry which depends very much on employees. Cost of employee accounted for 48%-52% of operating expense during 2019-2021.


<ul>
<li>Maintain BUY recommendation for M with a target price of Bt64. M’s 2Q22 net profit came in at Bt439m (+62%QoQ) and recovery from a loss of Bt99m in 2Q21</li>
<li>Solid earnings amid rising food costs M reported a net profit of Bt439m in 2Q22 (+62%QoQ) and recovery from a loss of Bt99m in 2Q21.The 1H22 result accounted for 56% </li>
<li>The YoY recovery in earnings supported by top-line recovery and GPM expansion YoY from resuming dine-in services.</li>
</ul>


Maintain BUY recommendation for M with a target price of Bt64. M’s 2Q22 net profit came in at Bt439m (+62%QoQ) and recovery from a loss of Bt99m in 2Q21
Solid earnings amid rising food costs M reported a net profit of Bt439m in 2Q22 (+62%QoQ) and recovery from a loss of Bt99m in 2Q21.The 1H22 result accounted for 56% 
The YoY recovery in earnings supported by top-line recovery and GPM expansion YoY from resuming dine-in services.


<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


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 : Bright Earnings Outlook in 2022-24

Maintain BUY recommendation for M with a target price of Bt64. A strong earnings recovery outlook in restaurant with an additional catalyst from...

Pi Securities PCL, Thailand

M : Solid 2Q22 Earnings as Expected

Maintain BUY recommendation for M with a target price of Bt64. M’s 2Q22 net profit came in at Bt439m (+62%QoQ) and recovery from a loss of Bt99m in...

Pi Securities PCL, Thailand

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

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