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>Due to increasing negative factors in international markets and a sharp decline in overseas sales in 1Q25, the company has revised down its sales target for this year to a decrease of 10 20% (previously projected growth of 5%) and now expects the gross profit margin to decline by 1- 2% from the 2024 levels (previously expected to remain flat).</li><li>We have revised down our core profit forecasts for 2025- 27E by an average of 23% per year, reflecting lower sales and margins based on a reduced 2025 sales target.</li><li>The valuation metrics now reflect a downgraded assessment of the current fundamentals to undervalued (from buy), along with a neutral tactical stance (previously very limited downside risk).</li></ul>

Due to increasing negative factors in international markets and a sharp decline in overseas sales in 1Q25, the company has revised down its sales target for this year to a decrease of 10 20% (previously projected growth of 5%) and now expects the gross profit margin to decline by 1- 2% from the 2024 levels (previously expected to remain flat).We have revised down our core profit forecasts for 2025- 27E by an average of 23% per year, reflecting lower sales and margins based on a reduced 2025 sales target.The valuation metrics now reflect a downgraded assessment of the current fundamentals to undervalued (from buy), along with a neutral tactical stance (previously very limited downside risk).

Sappe - Lowered Sales Target to –10%-20%; Earnings Forecasts Revised Down

<ul><li>Amid the prolonged slowdown in international markets beyond initial expectations, the company has revised down its sales growth target for this year to only 5% (previously expected at 20%) and postponed the planned completion of the new plant by one year.</li><li>We revised our core profit estimates for 2025-26E down by 11- 15% from the previous forecasts, reflecting lower sales and profit margins, as well as higher operating expenses to sales.</li><li>The valuation metrics remain attractive based on the current fundamentals, but the tactical outlook is revised to very limited downside risk (previously neutral).</li></ul>

Amid the prolonged slowdown in international markets beyond initial expectations, the company has revised down its sales growth target for this year to only 5% (previously expected at 20%) and postponed the planned completion of the new plant by one year.We revised our core profit estimates for 2025-26E down by 11- 15% from the previous forecasts, reflecting lower sales and profit margins, as well as higher operating expenses to sales.The valuation metrics remain attractive based on the current fundamentals, but the tactical outlook is revised to very limited downside risk (previously neutral).

Sappe - Sales Growth Target This Year Set at 5%

<ul><li>Core profit in 4Q24 and 2024 grew 18% and 14% YoY, respectively, driven by higher sales and improved margins.</li><li>The dividend yield for 2024 is expected at 4.8%.</li><li>The valuation metrics remain attractive for buying based on the fundamentals, while the tactical view is neutral. </li></ul>

Core profit in 4Q24 and 2024 grew 18% and 14% YoY, respectively, driven by higher sales and improved margins.The dividend yield for 2024 is expected at 4.8%.The valuation metrics remain attractive for buying based on the fundamentals, while the tactical view is neutral. 

Sappe - 4Q24 and 2024 Core Profit Grew 18% YoY and 14% YoY Thanks to a Strong GPM

<ul><li>Core profit for 4Q24E and 2024E is expected to have grown by 27% and 16% YoY, respectively, driven by higher sales and improved margins.</li><li>A dividend yield of 5.6% is anticipated for 2024E.</li><li>The valuation metrics remain attractive regarding the current fundamentals, with a neutral tactical outlook.</li></ul>

Core profit for 4Q24E and 2024E is expected to have grown by 27% and 16% YoY, respectively, driven by higher sales and improved margins.A dividend yield of 5.6% is anticipated for 2024E.The valuation metrics remain attractive regarding the current fundamentals, with a neutral tactical outlook.

Sappe - Expect 4Q24E and 2024E Core Profit Growth of 27% and 16% YoY on a Strong GPM

<ul><li>3Q24 profit was better than expected, driven by higher-than- anticipated margins and other income, while sales were in line with expectations. 4Q24E profit should decline QoQ and remain flat YoY.</li><li>The current fundamental valuation remains attractive for buying, with the latest stock price implying 30% upside from the fair value (FV) of Bt88.47 (based on the earnings yield with a required return of 5%, reflecting a target PER of 20x).</li><li>From a tactical perspective, the outlook is neutral, as the stock price has declined by 30% over the past three months, reflecting concerns about the profit slowdown in the second half of the year and weaker international sales to some extent.</li></ul>

3Q24 profit was better than expected, driven by higher-than- anticipated margins and other income, while sales were in line with expectations. 4Q24E profit should decline QoQ and remain flat YoY.The current fundamental valuation remains attractive for buying, with the latest stock price implying 30% upside from the fair value (FV) of Bt88.47 (based on the earnings yield with a required return of 5%, reflecting a target PER of 20x).From a tactical perspective, the outlook is neutral, as the stock price has declined by 30% over the past three months, reflecting concerns about the profit slowdown in the second half of the year and weaker international sales to some extent.

Sappe - 3Q24 Earnings Down YoY and QoQ, but Better than Expected Due to a Strong GPM

Thailand

Sappe Public Company Limited manufactures and distributes health drinks. The Company manufactures dietary and fruit juice drinks. Sappe distributes their products internationally.

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Sappe Pcl (SAPPE TB)

Sappe - Lowered Sales Target to –10%-20%; Earnings Forecasts Revised Down

We have revised down our core profit forecasts for 2025- 27E by an average of 23% per year, reflecting lower sales and margins based on a reduced...

Krungthai XSpring

Sappe - Sales Growth Target This Year Set at 5%

The valuation metrics remain attractive based on the current fundamentals, but the tactical outlook is revised to very limited downside risk...

Krungthai XSpring

Sappe - 4Q24 and 2024 Core Profit Grew 18% YoY and 14% YoY Thanks to a Strong GPM

Core profit in 4Q24 and 2024 grew 18% and 14% YoY, respectively, driven by higher sales and improved margins. The dividend yield for 2024 is...

Krungthai XSpring

Sappe - Expect 4Q24E and 2024E Core Profit Growth of 27% and 16% YoY on a Strong GPM

Core profit for 4Q24E and 2024E is expected to have grown by 27% and 16% YoY, respectively, driven by higher sales and improved margins.

Krungthai XSpring

Sappe - 3Q24 Earnings Down YoY and QoQ, but Better than Expected Due to a Strong GPM

3Q24 profit was better than expected, driven by higher-than- anticipated margins and other income, while sales were in line with expectations....

Krungthai XSpring

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