Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

Equity Bottom-Up

<p>We have visited many of two interesting companies recently, namely Singha Hotels (SHR) and PTG Energy, the country's second largest gas station operator.</p><ul>
<li>
<strong>Singha Hotels</strong>' losses in H1'20 widened over six-fold YoY to Bt946m as revenues dropped 34% to just Bt1.5bn, and the company expects earnings to be flat in H2'20. The company could not cut costs as aggressively as Minor did, bleeding Bt120/month on fixed cash costs alone.</li>
<li>Management clarified that most of their investments would be organic (refurbishment and improvements) rather than M&amp;A due to the tougher operating conditions. In the long-run, UK based hotels would fall from 74% to 21% of portfolio, and homegrown, own-managed hotels would rise to 48% of the portfolio.</li>
<li>
<strong>PTG Energy</strong> reported H1'20 earnings of Bt717m, down 24% YoY, on the back of a 15% revenue decline to Bt51.4bn during the same period. The company put up a brave face talking about its strong MKM (marketing margin) even as volumes plunged more than 30% for key categories.</li>
<li>We are rather bearish on the company, which appears to focus more on market share than profitability during this precarious period. They are investing some Bt3.5bn in capex and hoping to move up the rankings against key rivals.</li>
</ul>

We have visited many of two interesting companies recently, namely Singha Hotels (SHR) and PTG Energy, the country's second largest gas station operator.

Singha Hotels' losses in H1'20 widened over six-fold YoY to Bt946m as revenues dropped 34% to just Bt1.5bn, and the company expects earnings to be flat in H2'20. The company could not cut costs as aggressively as Minor did, bleeding Bt120/month on fixed cash costs alone.
Management clarified that most of their investments would be organic (refurbishment and improvements) rather than M&amp;A due to the tougher operating conditions. In the long-run, UK based hotels would fall from 74% to 21% of portfolio, and homegrown, own-managed hotels would rise to 48% of the portfolio.

PTG Energy reported H1'20 earnings of Bt717m, down 24% YoY, on the back of a 15% revenue decline to Bt51.4bn during the same period. The company put up a brave face talking about its strong MKM (marketing margin) even as volumes plunged more than 30% for key categories.
We are rather bearish on the company, which appears to focus more on market share than profitability during this precarious period. They are investing some Bt3.5bn in capex and hoping to move up the rankings against key rivals.


Small Cap Diary: Singha Hotels, PTG Energy

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

<p><strong>Yesterday analyst meeting came out with a positive tone. Oil business remains healthy in 3Q20, adding with gradual growth in non-oil segment and palm complex in 2H20.</strong></p><ul>
<li>We expect PTG to continue its growth in 3Q20 on the back of i) outstanding marketing margin ii) increasing sales volume and iii) growth in non-oil segment.</li>
<li>PTG reported a solid sales volume at 1,205 mL(flat YoY, -1%QoQ) amid a weakness in country oil consumption during the pandemic. Meanwhile, net profit soared to Bt510m in 2Q20 (19%YoY, 151%QoQ)</li>
</ul><p><strong>We reiterate our ‘BUY’ rating with a target price of Bt21.6, derived from 19.9xPE’21E which is the World Consumer Discretionary sector.</strong></p>

Yesterday analyst meeting came out with a positive tone. Oil business remains healthy in 3Q20, adding with gradual growth in non-oil segment and palm complex in 2H20.
We expect PTG to continue its growth in 3Q20 on the back of i) outstanding marketing margin ii) increasing sales volume and iii) growth in non-oil segment.
PTG reported a solid sales volume at 1,205 mL(flat YoY, -1%QoQ) amid a weakness in country oil consumption during the pandemic. Meanwhile, net profit soared to Bt510m in 2Q20 (19%YoY, 151%QoQ)
We reiterate our ‘BUY’ rating with a target price of Bt21.6, derived from 19.9xPE’21E which is the World Consumer Discretionary sector.

<p><strong>We reiterate BUY rating with a new 2021E target price of Bt21.6, from Bt16, derived from 19.9xPE’21E which equal to World Consumer Discretionary sector.</strong></p><div>• We expect a net profit of Bt436m in 2Q20E (2%YoY, 114%QoQ), supported by higher marketing margin at Bt1.9 per litre.</div><div>• Meanwhile, actual sales volume drops -1%YoY and -2%QoQ to 1,192 mL.</div><div>• We expect its sales volume to continue to grow both YoY and QoQ in 3Q20E, driven by easing of lockdown policy and tourism stimulus package while market margin is expected to remain healthy at Bt1.8 per litre.</div><div>• Tourism stimulus package in 2H20E and palm oil recovery also deliver upside risk to our forecast.</div>

We reiterate BUY rating with a new 2021E target price of Bt21.6, from Bt16, derived from 19.9xPE’21E which equal to World Consumer Discretionary sector.• We expect a net profit of Bt436m in 2Q20E (2%YoY, 114%QoQ), supported by higher marketing margin at Bt1.9 per litre.• Meanwhile, actual sales volume drops -1%YoY and -2%QoQ to 1,192 mL.• We expect its sales volume to continue to grow both YoY and QoQ in 3Q20E, driven by easing of lockdown policy and tourism stimulus package while market margin is expected to remain healthy at Bt1.8 per litre.• Tourism stimulus package in 2H20E and palm oil recovery also deliver upside risk to our forecast.

PTG: Healthy Outlook to Continue in 3Q20E

<p><strong>Analyst meeting held yesterday came out with a positive tone for the remaining quarters. From 2Q20 onwards, we expect marketing margin to improve while sales volume is also expected to come back to normal.</strong></p><p>Key takeaway:</p><div>• Expects a recovery in 2Q20, led by an improved in marketing margin</div><div>• Sales volume to continue growing in 2H20, after lockdown easing</div><div></div><p><strong>We maintain a BUY rating with a target price of Bt16.0, derived from 17.5xPE’20E, which equal to the World Consumer Discretionary sector.</strong></p>

Analyst meeting held yesterday came out with a positive tone for the remaining quarters. From 2Q20 onwards, we expect marketing margin to improve while sales volume is also expected to come back to normal.Key takeaway:• Expects a recovery in 2Q20, led by an improved in marketing margin• Sales volume to continue growing in 2H20, after lockdown easingWe maintain a BUY rating with a target price of Bt16.0, derived from 17.5xPE’20E, which equal to the World Consumer Discretionary sector.

<p><strong>We initiate coverage of PTG with a BUY rating and a 2020E target price of Bt16.0, derived from 17.5xPE’20E, which the mean of the World Consumer Discretionary sector.</strong></p><p>The story:</p><div>• Strong and growing position in oil retail business</div><div>• LPG business to be new growth driver</div><div>• Palm complex to add roughly 8% to profit in 2020E</div><div>• EPS growth at 16% CAGR during 2020-22E</div><div>
<br>
</div><p>Risks:</p><div>• Oil price fluctuation</div><div>• Highly competitive market</div>

We initiate coverage of PTG with a BUY rating and a 2020E target price of Bt16.0, derived from 17.5xPE’20E, which the mean of the World Consumer Discretionary sector.The story:• Strong and growing position in oil retail business• LPG business to be new growth driver• Palm complex to add roughly 8% to profit in 2020E• EPS growth at 16% CAGR during 2020-22E
 
Risks:• Oil price fluctuation• Highly competitive market

PTG: The No. 3 Player with a Growing Market Share

Thailand

PTG Energy Public Company Limited is a leading integrated energy and lifestyle platform company in Thailand, primarily engaged in the distribution of petroleum and LPG products through a nationwide network of PT service stations. The company also operates non-oil businesses including convenience stores (Max Mart), coffee shops (Punthai Coffee), auto care centers, and provides services such as e-Money and logistics. PTG Energy was founded in 1988 and is headquartered in Bangkok, Thailand.

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PTG Energy (PTG TB)

Small Cap Diary: Singha Hotels, PTG Energy

<p>We have visited many of the country's top three hotel operators. In this review, we checked two smaller ones, namely Singha Hotels and Dusit...

Athaporn Arayasantiparb, CFA

PTG: Marketing Margin Is Still Going Up

Yesterday analyst meeting came out with a positive tone. Oil business remains healthy in 3Q20, adding with gradual growth in non-oil segment and...

Pi Securities PCL, Thailand

PTG: Healthy Outlook to Continue in 3Q20E

We reiterate BUY rating with a new 2021E target price of Bt21.6, from Bt16, derived from 19.9xPE’21E which equal to World Consumer Discretionary...

Pi Securities PCL, Thailand

PTG: Marketing Margin to Improve in 2Q20

Analyst meeting held yesterday came out with a positive tone for the remaining quarters. From 2Q20 onwards, we expect marketing margin to improve...

Pi Securities PCL, Thailand

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Small Cap Diary: Singha Hotels, PTG Energy

<p>We have visited many of the country's top three hotel operators. In this review, we checked two smaller ones, namely Singha Hotels and Dusit...

Athaporn Arayasantiparb, CFA

PTG: Marketing Margin Is Still Going Up

Yesterday analyst meeting came out with a positive tone. Oil business remains healthy in 3Q20, adding with gradual growth in non-oil segment and...

Pi Securities PCL, Thailand

PTG: Healthy Outlook to Continue in 3Q20E

We reiterate BUY rating with a new 2021E target price of Bt21.6, from Bt16, derived from 19.9xPE’21E which equal to World Consumer Discretionary...

Pi Securities PCL, Thailand

PTG: Marketing Margin to Improve in 2Q20

Analyst meeting held yesterday came out with a positive tone for the remaining quarters. From 2Q20 onwards, we expect marketing margin to improve...

Pi Securities PCL, Thailand

PTG: The No. 3 Player with a Growing Market Share

We initiate coverage of PTG with a BUY rating and a 2020E target price of Bt16.0, derived from 17.5xPE’20E, which the mean of the World Consumer...

Pi Securities PCL, Thailand