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>SIRI reported a 2Q23 net profit of Bt1.62bn, in line with the market’s projection but 24% better than our estimate, due mainly to the booking of after-tax gain from land sales amounting to Bt402mn.</li><li>Excluding this extra item, SIRI’s core profit was Bt1.22bn (+32% YoY and +10% QoQ), 7% lower than our expectation, as the gross profit margin (GPM) was narrower than expected (at 32.2% vs. the expected 32.5%), and SG&amp;A expenses were 20% higher than expected.</li><li>Revenue increased by 26% YoY and 20% QoQ to Bt9.2bn, driven by revenue from property project sales (+21% YoY and 19% QoQ to Bt8.0bn, accounting for 87% of total revenue).</li></ul>

SIRI reported a 2Q23 net profit of Bt1.62bn, in line with the market’s projection but 24% better than our estimate, due mainly to the booking of after-tax gain from land sales amounting to Bt402mn.Excluding this extra item, SIRI’s core profit was Bt1.22bn (+32% YoY and +10% QoQ), 7% lower than our expectation, as the gross profit margin (GPM) was narrower than expected (at 32.2% vs. the expected 32.5%), and SG&amp;A expenses were 20% higher than expected.Revenue increased by 26% YoY and 20% QoQ to Bt9.2bn, driven by revenue from property project sales (+21% YoY and 19% QoQ to Bt8.0bn, accounting for 87% of total revenue).

Earnings Review - Sansiri Plc. (SIRI) - AUGUST 15, 2023

<ul><li>We have upgraded our rating to Buy (from Outperform), as our valuation metrics suggest that the stock is attractive in terms of both the current valuation and long-term growth.</li><li>The current share price implies upside of 31% to our new fair price of Bt2.31.</li><li>Meanwhile, the tactical downside risk is also very limited.</li></ul>

We have upgraded our rating to Buy (from Outperform), as our valuation metrics suggest that the stock is attractive in terms of both the current valuation and long-term growth.The current share price implies upside of 31% to our new fair price of Bt2.31.Meanwhile, the tactical downside risk is also very limited.

Thematic (Sector/Industry)

<ul><li>We expect Thai inflation to continue easing from May to August, driven down by the high base effect and lower oil prices.</li><li>The Ministry of Commerce (MoC) anticipates 2023E inflation at a mean of +2.2% YoY (range of 1.7-2.7%), slowing considerably from +6.1% YoY in 2022.</li><li>We expect the MPC to continue raising the policy interest rate by 25 bps to 2.00% in the meeting on May 31, 2023, which should be the last rate hike in this upcycle. </li></ul>

We expect Thai inflation to continue easing from May to August, driven down by the high base effect and lower oil prices.The Ministry of Commerce (MoC) anticipates 2023E inflation at a mean of +2.2% YoY (range of 1.7-2.7%), slowing considerably from +6.1% YoY in 2022.We expect the MPC to continue raising the policy interest rate by 25 bps to 2.00% in the meeting on May 31, 2023, which should be the last rate hike in this upcycle. 

Special Report: Inflation Remains on a Downtrend

<ul><li>Greater clarity after the general election should ease worries over a possible coup and a delay in the formation of a coalition government, which we expect to consist of three parties, i.e., the Pheu Thai Party, the Palang Pracharath Party and the Bhumjaithai Party, in our base-case scenario; this would reduce the risk premium of the SET Index, pushing it up to our target of 1,607 points.</li><li>Historical data from the five most recent elections shows that the SET increased by an average of +3.47% in the month after they were held; and in the week before and after the general elections took place, the index rose by 1.87% and 3.81%, respectively.</li><li>The biggest gainers were the finance, property development and ICT sectors. We thus recommend speculating on SIRI, SC, SCB, KBANK, CPALL, INTUCH, ADVANC and MINT.</li></ul>

Greater clarity after the general election should ease worries over a possible coup and a delay in the formation of a coalition government, which we expect to consist of three parties, i.e., the Pheu Thai Party, the Palang Pracharath Party and the Bhumjaithai Party, in our base-case scenario; this would reduce the risk premium of the SET Index, pushing it up to our target of 1,607 points.Historical data from the five most recent elections shows that the SET increased by an average of +3.47% in the month after they were held; and in the week before and after the general elections took place, the index rose by 1.87% and 3.81%, respectively.The biggest gainers were the finance, property development and ICT sectors. We thus recommend speculating on SIRI, SC, SCB, KBANK, CPALL, INTUCH, ADVANC and MINT.

Special Report: Election Rally (History to Repeat Itself)

<ul><li>Record-high targets in 2023E. Focusing on low-rise premium market and regaining its leading position in condominium market</li><li>Delivered record-high profit in 2022E, with upside for earnings momentum in 2023E</li><li>High interest-bearing DER but at a manageable level</li></ul>

Record-high targets in 2023E. Focusing on low-rise premium market and regaining its leading position in condominium marketDelivered record-high profit in 2022E, with upside for earnings momentum in 2023EHigh interest-bearing DER but at a manageable level

Sansiri - Targeting Another Record Year in 2023E

Thailand

Sansiri Public Company Limited develops real estate projects for sales and rentals.  Its projects include resort condominiums, residential and office buildings.  The Company also provides property and project management services.

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Sansiri Public (SIRI TB)

Earnings Review - Sansiri Plc. (SIRI) - AUGUST 15, 2023

Revenue increased by 26% YoY and 20% QoQ to Bt9.2bn, driven by revenue from property project sales (+21% YoY and 19% QoQ to Bt8.0bn, accounting for...

Krungthai XSpring

Sansiri - Uptrend Momentum Intact

We have upgraded our rating to Buy (from Outperform), as our valuation metrics suggest that the stock is attractive in terms of both the current...

Krungthai XSpring

Special Report: Inflation Remains on a Downtrend

The Ministry of Commerce (MoC) anticipates 2023E inflation at a mean of +2.2% YoY (range of 1.7-2.7%), slowing considerably from +6.1% YoY in 2022.

Krungthai XSpring

Special Report: Election Rally (History to Repeat Itself)

The biggest gainers were the finance, property development and ICT sectors. We thus recommend speculating on SIRI, SC, SCB, KBANK, CPALL, INTUCH,...

Krungthai XSpring

Sansiri - Targeting Another Record Year in 2023E

Record-high targets in 2023E. Focusing on low-rise premium market and regaining its leading position in condominium market

Krungthai XSpring

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