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.

Cross Asset Strategy

<ul><li>We suggest taking profit on BAFS, M, SIS and LST (with the returns since they were added at +7.7%, +1.5%, +6.6% and +1.0%, respectively) because they have fallen out of our top rankings.</li><li>We recommend replacing them with AMANAH and KSL.</li><li>AMANAH’s 2022E net profit is expected to remain flat YoY at Bt309mn, based on our conservative assumption for loan portfolio growth of +10.0% YoY.</li></ul>

We suggest taking profit on BAFS, M, SIS and LST (with the returns since they were added at +7.7%, +1.5%, +6.6% and +1.0%, respectively) because they have fallen out of our top rankings.We recommend replacing them with AMANAH and KSL.AMANAH’s 2022E net profit is expected to remain flat YoY at Bt309mn, based on our conservative assumption for loan portfolio growth of +10.0% YoY.

Small Cap Top Picks - Changes in Recommended List

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>RS reports 3Q22 net profit at Bt82m,the highest level in the past six quarter,which is 46% above market estimate.Impressive earnings resulted mainly supported by solid recovery in multi-platform commerce (MPC)</li>
<li>3Q22 profit recovered from bottom quarter in 2Q22 RS reported 3Q22 net profit at Bt82m (+528%QoQ turnaround from loss of Bt0.3m in 3Q21).YoY and QoQ improvement in earnings mainly supported</li>
<li>However, equity income fell to the lowest level at Bt6m (-81%YoY -38%QoQ) due to weak performance for debt collection business under Chase Asia. (35% holding stake) amid sluggish domestic economy.</li>
</ul>


RS reports 3Q22 net profit at Bt82m,the highest level in the past six quarter,which is 46% above market estimate.Impressive earnings resulted mainly supported by solid recovery in multi-platform commerce (MPC)
3Q22 profit recovered from bottom quarter in 2Q22 RS reported 3Q22 net profit at Bt82m (+528%QoQ turnaround from loss of Bt0.3m in 3Q21).YoY and QoQ improvement in earnings mainly supported
However, equity income fell to the lowest level at Bt6m (-81%YoY -38%QoQ) due to weak performance for debt collection business under Chase Asia. (35% holding stake) amid sluggish domestic economy.


RS : 3Q22 Earnings Show Sign of Positive Recovery

<ul>
<li>We downgrade RS to HOLD while trim down target price to Bt15.0 (Previous TP:Bt20) after revise down earnings in 2022-23E by 41-52%in order to factor in disappointed revenue from multi-platform </li>
<li>2Q22 should be the bottom quarter   RS reported 2Q22 net profit at Bt13m (-76%YoY -76%QoQ), significantly below our expectation. YoY drop in earnings pressured by weak performance for MPC </li>
<li>QoQ fall in profit dragged down by an increase in expense from ULife (acquired in May’22), which resulted in increasing SG&amp;A to sales ratio to 45.8% (vs.41.4% in 1Q22). Meanwhile</li>
</ul>


We downgrade RS to HOLD while trim down target price to Bt15.0 (Previous TP:Bt20) after revise down earnings in 2022-23E by 41-52%in order to factor in disappointed revenue from multi-platform 
2Q22 should be the bottom quarter   RS reported 2Q22 net profit at Bt13m (-76%YoY -76%QoQ), significantly below our expectation. YoY drop in earnings pressured by weak performance for MPC 
QoQ fall in profit dragged down by an increase in expense from ULife (acquired in May’22), which resulted in increasing SG&amp;A to sales ratio to 45.8% (vs.41.4% in 1Q22). Meanwhile


RS : 2H22 Earnings Recovery Remains Challenging

<ul>
<li>We have a positive view toward the acquisition of Unilever’s direct sales business as it align with the company's business strategy to strengthen Entertainmerce business especially on outbound sales. Excluding </li>
<li>Our expectation over earnings recovery in 2022E will be driven by 1.) 35% revenue growth supported by recovery of existing MPC segments and consolidation of ULife,2.) an absence of heavy </li>
<li>We expect RS to post 4Q21 net loss at Bt10m (compared with Bt0.9m loss in 3Q21 and Bt103m profit in 4Q20).</li>
</ul>


We have a positive view toward the acquisition of Unilever’s direct sales business as it align with the company's business strategy to strengthen Entertainmerce business especially on outbound sales. Excluding 
Our expectation over earnings recovery in 2022E will be driven by 1.) 35% revenue growth supported by recovery of existing MPC segments and consolidation of ULife,2.) an absence of heavy 
We expect RS to post 4Q21 net loss at Bt10m (compared with Bt0.9m loss in 3Q21 and Bt103m profit in 4Q20).


RS: Strengthening Entertainmerce Portfolio

<ul>
<li>We believe RS’s 2022E target revenue at Bt5.1bn (+31% from our 2021E forecast) is a bit optimistic given a slower-than-expected recovery in people purchasing power during post-COVID-19. However</li>
<li>Our expectation over earnings recovery in 2022E will be driven by 1.) an absence of heavy SG&amp;A expense allocation after key product launch(Camu- C) in 2021, 2.) equity income recognition</li>
<li>Expect earnings in 4Q21 to reach bottom at Bt10m loss due to slower-than-expected recovery in MPC sales and Ads spending.</li>
</ul>


We believe RS’s 2022E target revenue at Bt5.1bn (+31% from our 2021E forecast) is a bit optimistic given a slower-than-expected recovery in people purchasing power during post-COVID-19. However
Our expectation over earnings recovery in 2022E will be driven by 1.) an absence of heavy SG&amp;A expense allocation after key product launch(Camu- C) in 2021, 2.) equity income recognition
Expect earnings in 4Q21 to reach bottom at Bt10m loss due to slower-than-expected recovery in MPC sales and Ads spending.


RS: Rising for Sustainable Growth in 2022

Thailand

R.S. Public Company Limited is a Thai entertainment and media company that has transformed into an 'Entertainmerce' business model, integrating commerce with media and music. The company operates through multi-platform commerce, media business (digital TV and radio), and music and showbiz, offering a diverse range of products and content, including health and beauty products, pet care services, digital television, and music labels. The company was founded in 1976 and is headquartered in Bangkok, Thailand.

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R.S. (RS TB)

Small Cap Top Picks - Changes in Recommended List

We suggest taking profit on BAFS, M, SIS and LST (with the returns since they were added at +7.7%, +1.5%, +6.6% and +1.0%, respectively) because...

Krungthai XSpring

RS : 3Q22 Earnings Show Sign of Positive Recovery

RS reports 3Q22 net profit at Bt82m, the highest level in the past six quarter, which is 46% above market estimate. Impressive earnings resulted...

Pi Securities PCL, Thailand

RS : 2H22 Earnings Recovery Remains Challenging

We downgrade RS to HOLD while trim down target price to Bt15.0 (Previous TP: Bt20) after revise down earnings in 2022-23E by 41-52% in order to...

Pi Securities PCL, Thailand

RS: Strengthening Entertainmerce Portfolio

We have a positive view toward the acquisition of Unilever’s direct sales business as it align with the company's business strategy to strengthen...

Pi Securities PCL, Thailand

RS: Rising for Sustainable Growth in 2022

We believe RS’s 2022E target revenue at Bt5.1bn (+31% from our 2021E forecast) is a bit optimistic given a slower-than-expected recovery in people...

Pi Securities PCL, Thailand

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