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

PTT Oil & Retail Business  / Equity Bottom-Up

<ul>
<li>We expect the 3Q22net profit to fall 64% QoQ to Bt2.4bn,levelling off from an all-time high in 2Q22,due to stock loss and dip in oil marketing margin to low base </li>
<li>Oil marketing margin to plunge in 3Q22We expect 3Q22earnings to fall 64%QoQ to Bt2.4bn dragged by weak contribution from mobility business owing to lower sales volume and oil marketing margin.</li>
<li>The oil sales volume is expected to be at 6.3bn liters (+21% YoY, -8% QoQ), improving YoY on the back of economy reopening. While drop QoQ due to seasonality (rain).</li>
</ul>


We expect the 3Q22net profit to fall 64% QoQ to Bt2.4bn,levelling off from an all-time high in 2Q22,due to stock loss and dip in oil marketing margin to low base 
Oil marketing margin to plunge in 3Q22We expect 3Q22earnings to fall 64%QoQ to Bt2.4bn dragged by weak contribution from mobility business owing to lower sales volume and oil marketing margin.
The oil sales volume is expected to be at 6.3bn liters (+21% YoY, -8% QoQ), improving YoY on the back of economy reopening. While drop QoQ due to seasonality (rain).


OR : 3Q22 Earnings to Be Hit by Weak Marketing Margin

<ul>
<li>We remain positive on OR’s non-oil segment (mainly café amazon) growth outlook in 2022 and ahead after the site visit at Café amazon concept store and Amazon inspiring campus</li>
<li>Oil &amp; retail business model a wise strategy The non-oil businesses have proven to be successful and contributed to 21% to total EBITDA with more than 25%EBITDA margin in 2022</li>
<li>We expect the EBITDA contribution from non-oil business segment continue to grow from café-Amazon store expansion and higher profitability.The non-oil revenue is projected to grow at 8.5% CAGR during 2022-25E</li>
</ul>


We remain positive on OR’s non-oil segment (mainly café amazon) growth outlook in 2022 and ahead after the site visit at Café amazon concept store and Amazon inspiring campus
Oil &amp; retail business model a wise strategy The non-oil businesses have proven to be successful and contributed to 21% to total EBITDA with more than 25%EBITDA margin in 2022
We expect the EBITDA contribution from non-oil business segment continue to grow from café-Amazon store expansion and higher profitability.The non-oil revenue is projected to grow at 8.5% CAGR during 2022-25E


OR : Enhanced Profitability from Non-Oil Business

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>I-Tail Corporation, an original equipment manufacturer (OEM) in the wet pet food category, aims to list in Thailand in 4Q22. ITC is a subsidiary of <a href="https://www.smartkarma.com/entities/thai-union-group-pcl" target="_blank" data-smartkarma-citation="entities:161:1" rel="noopener">Thai Union Group (TU TB)</a>. </li>
<li>As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.</li>
<li>In this note, we talk about the positive aspects of the deal.</li>
</ul>


I-Tail Corporation, an original equipment manufacturer (OEM) in the wet pet food category, aims to list in Thailand in 4Q22. ITC is a subsidiary of Thai Union Group (TU TB). 
As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.
In this note, we talk about the positive aspects of the deal.


I-Tail Corporation Pre-IPO - The Positives - For the Pampered Pets

<ul>
<li>We upgrade the recommendation to BUY from HOLD based on a revised up target price of Bt30.0(11%up from previous Bt27.0)on the back of 10 to 36% earnings revision for 2022-23E</li>
<li>Higher marketing margin drove 2Q22 profit The 2Q22 net profit grew to an all-time high of Bt6.6bn (+104% YoY, +71% QoQ). The result came out better than our expectation </li>
<li>Oil business EBITDA rose to Bt8.3bn (+98%YoY,+73%QoQ), on the back of spike in gross profit/unit to Bt1.6/Liter (+31%YoY, +41%QoQ) from easing of diesel price cap and higher jet fuel sales.</li>
</ul>


We upgrade the recommendation to BUY from HOLD based on a revised up target price of Bt30.0(11%up from previous Bt27.0)on the back of 10 to 36% earnings revision for 2022-23E
Higher marketing margin drove 2Q22 profit The 2Q22 net profit grew to an all-time high of Bt6.6bn (+104% YoY, +71% QoQ). The result came out better than our expectation 
Oil business EBITDA rose to Bt8.3bn (+98%YoY,+73%QoQ), on the back of spike in gross profit/unit to Bt1.6/Liter (+31%YoY, +41%QoQ) from easing of diesel price cap and higher jet fuel sales.


OR : Revamping Oil Marketing Margin and Undemanding Valuation

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Thailand's state-owned energy firm <strong><a href="https://www.smartkarma.com/entities/ptt-pcl" target="_blank" data-smartkarma-citation="entities:197:1" rel="noopener">PTT (PTT TB)</a></strong> recently announced a ~67% and ~13% increase yoy in 1H22 revenue and net profit, buoyed by higher average selling prices and sales volume.</li>
<li>Earlier this month PTT also announced the divestment of its Indonesian coal mining business as the company transitions towards clean energy.</li>
<li>PTT's goal is to make Thailand a liquified natural gas hub in Asia. The market appears to be fully pricing in this ambitious roadmap.</li>
</ul>


Thailand's state-owned energy firm PTT (PTT TB) recently announced a ~67% and ~13% increase yoy in 1H22 revenue and net profit, buoyed by higher average selling prices and sales volume.
Earlier this month PTT also announced the divestment of its Indonesian coal mining business as the company transitions towards clean energy.
PTT's goal is to make Thailand a liquified natural gas hub in Asia. The market appears to be fully pricing in this ambitious roadmap.


PTT (PTT TB): Asset Sales And Solid Results

Thailand

PTT Oil and Retail Business Public Company Limited distributes petroleum products. The Company offers oil, gas, fuels, LPG, lubricants, and other related items. PTT Oil and Retail Business serves customers in Thailand.

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PTT Oil & Retail Business (OR TB)

OR : 3Q22 Earnings to Be Hit by Weak Marketing Margin

We expect the 3Q22 net profit to fall 64% QoQ to Bt2.4bn, levelling off from an all-time high in 2Q22, due to stock loss and dip in oil marketing...

Pi Securities PCL, Thailand

OR : Enhanced Profitability from Non-Oil Business

We remain positive on OR’s non-oil segment (mainly café amazon) growth outlook in 2022 and ahead after the site visit at Café amazon concept store...

Pi Securities PCL, Thailand

I-Tail Corporation Pre-IPO - The Positives - For the Pampered Pets

I-Tail Corporation, an original equipment manufacturer (OEM) in the wet pet food category, aims to list in Thailand in 4Q22. ITC is a subsidiary of...

Sumeet Singh

OR : Revamping Oil Marketing Margin and Undemanding Valuation

We upgrade the recommendation to BUY from HOLD based on a revised up target price of Bt30.0 (11% up from previous Bt27.0) on the back of 10 to 36%...

Pi Securities PCL, Thailand

PTT (PTT TB): Asset Sales And Solid Results

PTT's goal is to make Thailand a liquified natural gas hub in Asia. The market appears to be fully pricing in this ambitious roadmap.

David Blennerhassett

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