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

<p><strong>Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP methodology, implying 15.0xPE’22E.</strong></p><div>• Expect 2Q21 recurring profit to improve both YoY and QoQ on the back of 1) seasonal better contribution of IPP and hydro power plants, and 2) profit recognition from 377MWe new power plant COD in Australia during 1Q-2Q21.</div><div></div><div>• Maintain positive outlook towards the 2021-25 earnings backed by COD of 1.3GWe projects in pipeline, representing a 19% expansion by 2025.</div><div></div><div>• Negative view on investment in PRINC, as we expect no returns (dividend income) in near term (2021-23) and lack of synergy benefits.</div><div></div><div>• The stock is quite attractive given its cheap valuation of 11.4x PE’21E (-1SD, 10-year historical PE) and the current price provides an attractive dividend yield of 5.3-to-5.8% in 2021-23.</div>

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP methodology, implying 15.0xPE’22E.• Expect 2Q21 recurring profit to improve both YoY and QoQ on the back of 1) seasonal better contribution of IPP and hydro power plants, and 2) profit recognition from 377MWe new power plant COD in Australia during 1Q-2Q21.• Maintain positive outlook towards the 2021-25 earnings backed by COD of 1.3GWe projects in pipeline, representing a 19% expansion by 2025.• Negative view on investment in PRINC, as we expect no returns (dividend income) in near term (2021-23) and lack of synergy benefits.• The stock is quite attractive given its cheap valuation of 11.4x PE’21E (-1SD, 10-year historical PE) and the current price provides an attractive dividend yield of 5.3-to-5.8% in 2021-23.

RATCH: Cheap Valuation and Attractive Dividend Yield

<p><strong>Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5, derived using SOTP methodology, implying 16.0xPE’21E.</strong></p><div>• Expect 1Q21 earnings to grow YoY on the back of full quarter contribution from ABEIF, while soften QoQ due to lower contribution from Hongsa.</div><div></div><div>• Maintain positive view towards the 2021-25 earnings backed by COD of 1.6GWe projects in pipeline, representing a 24% expansion by 2025.</div><div></div><div>• The stock is quite attractive given its cheap valuation of 12x PE’21 (-1SD, 10-year historical PE) and the current price provides an attractive dividend yield of 5.1-to-5.8% in 2021-23.</div>

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5, derived using SOTP methodology, implying 16.0xPE’21E.• Expect 1Q21 earnings to grow YoY on the back of full quarter contribution from ABEIF, while soften QoQ due to lower contribution from Hongsa.• Maintain positive view towards the 2021-25 earnings backed by COD of 1.6GWe projects in pipeline, representing a 24% expansion by 2025.• The stock is quite attractive given its cheap valuation of 12x PE’21 (-1SD, 10-year historical PE) and the current price provides an attractive dividend yield of 5.1-to-5.8% in 2021-23.

RATCH: Steady Growth Outlook with Decent Dividend Yield

<p><strong>Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP methodology, implying 18.0xPE’21E.</strong></p><div>• We expect 4Q20 earnings to grow YoY on the back of higher availability factor of Hongsa Power plant, while remain flat QoQ due to lower seasonal contribution from IPP power plants and higher SG&amp;A expenses.</div><div></div><div>• Maintain positive view towards the 2021-25 earnings backed by COD of 1.6GWe projects in pipeline, representing a 24% expansion by 2025.</div><div></div><div>• The stock is quite attractive given its cheap valuation of 14.4x PE’21 and the current price provides an attractive dividend yield of 4.0-to-4.9% in 2020-22.</div>

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP methodology, implying 18.0xPE’21E.• We expect 4Q20 earnings to grow YoY on the back of higher availability factor of Hongsa Power plant, while remain flat QoQ due to lower seasonal contribution from IPP power plants and higher SG&amp;A expenses.• Maintain positive view towards the 2021-25 earnings backed by COD of 1.6GWe projects in pipeline, representing a 24% expansion by 2025.• The stock is quite attractive given its cheap valuation of 14.4x PE’21 and the current price provides an attractive dividend yield of 4.0-to-4.9% in 2020-22.

RATCH: Growth Intact from Steady Capacity Expansion

Equity Capital Markets

<p><strong>RATCH reported 3Q20 net profit of Bt1.72bn (+26.2% YoY, +60.3% QoQ), the highest since past 5 quarters.</strong></p><div>• Excluding FX and extraordinary items the core profit was Bt1.58bn (+3.7% YoY, +197% QoQ),</div><div></div><div>• The strong QoQ earnings growth was due to increase in power generation and sales from RG and HPC power plants, which had maintenance shutdown in 2Q20</div><div></div><div>• Expect 4Q20 earnings to soften QoQ because of lower seasonal contribution from IPP power plants and higher SG&amp;A expenses.</div><div></div><div>• We maintain our positive view towards the 2021-22E earnings backed by full year earnings recognition from 797MWe projects commencing operation in 2020-21 period.</div><div></div><div>• We believe the stock weakness in 4Q20 will be an opportunity to accumulate</div><p></p><p><strong>We maintain the BUY recommendation, while revise down the target price to Bt70.5 (from previous Bt74.5) on the back of 12 to 19% cut in 2020-22 earnings forecast. Our valuation is based on SOTP methodology, implying 18xPE’21E.</strong></p>

RATCH reported 3Q20 net profit of Bt1.72bn (+26.2% YoY, +60.3% QoQ), the highest since past 5 quarters.• Excluding FX and extraordinary items the core profit was Bt1.58bn (+3.7% YoY, +197% QoQ),• The strong QoQ earnings growth was due to increase in power generation and sales from RG and HPC power plants, which had maintenance shutdown in 2Q20• Expect 4Q20 earnings to soften QoQ because of lower seasonal contribution from IPP power plants and higher SG&amp;A expenses.• We maintain our positive view towards the 2021-22E earnings backed by full year earnings recognition from 797MWe projects commencing operation in 2020-21 period.• We believe the stock weakness in 4Q20 will be an opportunity to accumulateWe maintain the BUY recommendation, while revise down the target price to Bt70.5 (from previous Bt74.5) on the back of 12 to 19% cut in 2020-22 earnings forecast. Our valuation is based on SOTP methodology, implying 18xPE’21E.

RATCH: 3Q20 Earnings Grew from Better Overseas Performance

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.

<ul><li>We have a neutral view on RATCH's analyst meeting, with its capacity growth target of 10,000MW within 2025E unchanged, and projects in the pipeline and other potential projects to help sustain its LT earnings.</li><li>With the weak contribution of Hongsa largely priced-in and the new contribution of Thang Long (in late 3Q20E onward) not being valued by the market, alongside the appealing upside gain and sustained dividend yield of 4% p.a., we upgrade our rating to Buy (from Hold).</li><li>Our 2021E TP is unchanged at Bt66.</li></ul>

We have a neutral view on RATCH's analyst meeting, with its capacity growth target of 10,000MW within 2025E unchanged, and projects in the pipeline and other potential projects to help sustain its LT earnings.With the weak contribution of Hongsa largely priced-in and the new contribution of Thang Long (in late 3Q20E onward) not being valued by the market, alongside the appealing upside gain and sustained dividend yield of 4% p.a., we upgrade our rating to Buy (from Hold).Our 2021E TP is unchanged at Bt66.

Growth Prospects Ahead; Sustained Dividend Yield

Thailand

Ratch Group is a leading investment holding company primarily focused on electricity generation and energy businesses. The company's portfolio includes fossil-fuel-based, renewable energy, and battery energy storage projects across Thailand, ASEAN, and Australia. It also invests in infrastructure and electricity-related businesses, such as maintenance and operation services, fuel supply, and energy innovation. Headquartered in Nonthaburi, Thailand, the company was established on March 7, 2000.

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Ratch Group (RATCH TB)

RATCH: Cheap Valuation and Attractive Dividend Yield

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP...

Pi Securities PCL, Thailand

RATCH: Steady Growth Outlook with Decent Dividend Yield

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5, derived using SOTP...

Pi Securities PCL, Thailand

RATCH: Growth Intact from Steady Capacity Expansion

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP...

Pi Securities PCL, Thailand

RATCH: 3Q20 Earnings Grew from Better Overseas Performance

We maintain the BUY recommendation, while revise down the target price to Bt70.5 (from previous Bt74.5) on the back of 12 to 19% cut in 2020-22...

Pi Securities PCL, Thailand

Growth Prospects Ahead; Sustained Dividend Yield

We have a neutral view on RATCH's analyst meeting, with its capacity growth target of 10,000MW within 2025E unchanged, and projects in the...

Krungthai XSpring

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