Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Thematic (Sector/Industry)

In this review, we predict that Thai equities will rally in October and early November before another major correction in December with the Fed rate hike. In the short term, we expect Thai banks to do well, as they and Asian counterparts (eg. Singapore's DBS) benefit in terms of relative growth if the US banks are hampered by the regulator's decision to increase capital requirements of the largest banks. We also see two companies run by Thailand's second richest tycoon Charoen Sirivadhanabhakdi, namely BJC and Thai Beverage, outperforming companies run by the larger CP Group, primarily due to corporate action and a market's tilt towards consumers and retailing sectors. Needless to say, we will be tactically overweight on banks, retailers, and consumers over the next two months.We also discuss: 1) the overall upgrade of Thailand's growth expectations on the back of stronger domestic consumption; and 2) highight the government's five strategic sectors, named 'The 5 S-Curves'.

In this review, we predict that Thai equities will rally in October and early November before another major correction in December with the Fed rate hike. In the short term, we expect Thai banks to do well, as they and Asian counterparts (eg. Singapore's DBS) benefit in terms of relative growth if the US banks are hampered by the regulator's decision to increase capital requirements of the largest banks. We also see two companies run by Thailand's second richest tycoon Charoen Sirivadhanabhakdi, namely BJC and Thai Beverage, outperforming companies run by the larger CP Group, primarily due to corporate action and a market's tilt towards consumers and retailing sectors. Needless to say, we will be tactically overweight on banks, retailers, and consumers over the next two months.We also discuss: 1) the overall upgrade of Thailand's growth expectations on the back of stronger domestic consumption; and 2) highight the government's five strategic sectors, named 'The 5 S-Curves'.

American Capital Requirement Increase: Charoen and Thai Banks to Lead October Rally

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.

Equity Bottom-Up

<ul><li>Technically, the SET Index is expected to weaken, with the support at 1,350/1,345 points and the resistance at 1,365/1,371 points (10-day EMA/25-day EMA).</li><li>However, despite this positive movement, the SET still faces potential external risk factors this week.</li><li>Investors are advised to be more cautious about investment in the Thai equity market amid risks of foreign fund outflows in case the Fed signals the tightening of monetary policies this week.</li></ul>

Technically, the SET Index is expected to weaken, with the support at 1,350/1,345 points and the resistance at 1,365/1,371 points (10-day EMA/25-day EMA).However, despite this positive movement, the SET still faces potential external risk factors this week.Investors are advised to be more cautious about investment in the Thai equity market amid risks of foreign fund outflows in case the Fed signals the tightening of monetary policies this week.

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

<ul>
<li>A solid earnings recovery trend with an attractive dividend yield at 4%-5%. We maintain BUY rating and roll over target price to Bt26.25 (+19% from previous TP) based on 24xPE’22E</li>
<li>We expect 4Q21 earnings to recover both YoY and QoQ driven by 1) strong revenue recovery from new products launch and online marketing campaign, 2) an increase in gross profit </li>
<li>We maintain our positive view toward its 2022-23E outlook, driven by 1) a solid revenue in “product champions” such as Body Bra, Seamless Fit, Wireless Bra, Level Bra, and Sabina</li>
</ul>


A solid earnings recovery trend with an attractive dividend yield at 4%-5%. We maintain BUY rating and roll over target price to Bt26.25 (+19% from previous TP) based on 24xPE’22E
We expect 4Q21 earnings to recover both YoY and QoQ driven by 1) strong revenue recovery from new products launch and online marketing campaign, 2) an increase in gross profit 
We maintain our positive view toward its 2022-23E outlook, driven by 1) a solid revenue in “product champions” such as Body Bra, Seamless Fit, Wireless Bra, Level Bra, and Sabina


SABINA: Expect Solid Revenue Recover in 4Q21

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).

Taokaenoi Food & Marketing / Equity Bottom-Up

We visited two interesting small-cap companies recently. Taokaenoi was a former high-flyer founded by a young business legend selling seaweed snacks in almost 30 different markets. Sabina is a leading local bra maker in Thailand. During COVID-19, they have taken to creating some face masks.<ul>
<li>
Taokaenoi (TKN) reported Bt263m in earnings for 9M'20, up 6% YoY, despite a 19% drop in revenues largely by aggressive cost cutting. Chinese sales plunged 9% partly due to COVID-19 but also accounting changes, while American sales rocketed 50% and looks poised to continue with strong momenum.</li>
<li>Meanwhile, TKN also plans to introduce new products (milk tea), consolidate production in Rojana plant, and continue benefiting from its cheap seaweed inventory well into late 2021.</li>
<li>
SABINA reported Q3'20 earnings of Bt86m, down 26.4% YoY, on the back of 3.8% YoY decline in revenues to Bt815m. The company's margins were greatly depressed by face mask production, much of which was donated and the rest of which were sold at lower margins to keep things going.</li>
<li>SABINA hesitated to cut down its outlets aggressively as they wanted to make sure it's not a one-time pandemic issue, and they hope to see recovery next year on the back of foreign online sales expansion.</li>
</ul>

We visited two interesting small-cap companies recently. Taokaenoi was a former high-flyer founded by a young business legend selling seaweed snacks in almost 30 different markets. Sabina is a leading local bra maker in Thailand. During COVID-19, they have taken to creating some face masks.

Taokaenoi (TKN) reported Bt263m in earnings for 9M'20, up 6% YoY, despite a 19% drop in revenues largely by aggressive cost cutting. Chinese sales plunged 9% partly due to COVID-19 but also accounting changes, while American sales rocketed 50% and looks poised to continue with strong momenum.
Meanwhile, TKN also plans to introduce new products (milk tea), consolidate production in Rojana plant, and continue benefiting from its cheap seaweed inventory well into late 2021.

SABINA reported Q3'20 earnings of Bt86m, down 26.4% YoY, on the back of 3.8% YoY decline in revenues to Bt815m. The company's margins were greatly depressed by face mask production, much of which was donated and the rest of which were sold at lower margins to keep things going.
SABINA hesitated to cut down its outlets aggressively as they wanted to make sure it's not a one-time pandemic issue, and they hope to see recovery next year on the back of foreign online sales expansion.


We maintain BUY rating with a new target price of Bt24 based on 24xPE’21E, +20% from previous target, which is close to Thailand consumer discretionary sector.<ul>
<li>We expect 3Q20 earnings to recover to Bt74m (-36%YoY, +48%QoQ) driven by a strong revenue recovery at Bt748m (+14%QoQ),  margin expansion after re-opening stores and slow down marketing expense.</li>
<li>Revise up 2020-21E earnings forecast by 10%-20% to factor in stronger revenue recovery than our previous expectation.</li>
</ul>We maintain our positive view toward its 2021-22E outlook driven by growth opportunities in e-commerce, oversea market and new “product champions” such as Body Bra, Seamless Fit, Wireless Bra.

We maintain BUY rating with a new target price of Bt24 based on 24xPE’21E, +20% from previous target, which is close to Thailand consumer discretionary sector.
We expect 3Q20 earnings to recover to Bt74m (-36%YoY, +48%QoQ) driven by a strong revenue recovery at Bt748m (+14%QoQ),  margin expansion after re-opening stores and slow down marketing expense.
Revise up 2020-21E earnings forecast by 10%-20% to factor in stronger revenue recovery than our previous expectation.
We maintain our positive view toward its 2021-22E outlook driven by growth opportunities in e-commerce, oversea market and new “product champions” such as Body Bra, Seamless Fit, Wireless Bra.

Thailand

Sabina Public Company Limited is a Thai manufacturer and distributor of women's lingerie, offering a wide range of products including bras, panties, shapewear, swimwear, and activewear for all age groups and price segments. The company also manufactures lingerie for other leading international brands (OEM). Sabina is headquartered in Hankha, Thailand, and was founded in 1995.

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Sabina (SABINA TB)

American Capital Requirement Increase: Charoen and Thai Banks to Lead October Rally

In this review, we predict that Thai equities will rally in October and early November before another major correction in December with the Fed...

Athaporn Arayasantiparb, CFA

Weekly View & Earnings Results

Technically, the SET Index is expected to weaken, with the support at 1,350/1,345 points and the resistance at 1,365/1,371 points (10-day...

Krungthai XSpring

SABINA: Expect Solid Revenue Recover in 4Q21

A solid earnings recovery trend with an attractive dividend yield at 4%-5%. We maintain BUY rating and roll over target price to Bt26.25 (+19% from...

Pi Securities PCL, Thailand

Small Cap Diary: Taokaenoi and Sabina

We visited two interesting companies recently: seaweed market leader Taokaenoi and the country's second largest maker of bras SABINA. Neither are...

Athaporn Arayasantiparb, CFA

SABINA: Expect Earnings Recovery in 3Q20

We maintain BUY rating with a new target price of Bt24 based on 24xPE’21E, +20% from previous target, which is close to Thailand consumer...

Pi Securities PCL, Thailand

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