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>2Q24E core profit is expected to have grown 19% YoY and 7% QoQ driven by increased overseas sales growth and GPM YoY and QoQ.</li><li>3 Q is a peak sales season for overseas markets, especially Europe and the US, which would boost earnings growth. We maintain 2024E earnings growth.</li><li>KTX switch our rating to “Outperform” with the new fair value of Bt9 7 . 7 3 , based on the earnings yield and the required return of 5.1% (vs. Neutral, FV= Bt96.38 previously).</li></ul>

2Q24E core profit is expected to have grown 19% YoY and 7% QoQ driven by increased overseas sales growth and GPM YoY and QoQ.3 Q is a peak sales season for overseas markets, especially Europe and the US, which would boost earnings growth. We maintain 2024E earnings growth.KTX switch our rating to “Outperform” with the new fair value of Bt9 7 . 7 3 , based on the earnings yield and the required return of 5.1% (vs. Neutral, FV= Bt96.38 previously).

Sappe - 2Q24E Sales and Profit to Hit New Record Highs

<ul><li>The 2Q24E sales and profit are expected to grow 21% YoY and 9% QoQ, respectively, hitting new records.</li><li>With the peak sales season in overseas markets in 3Q, profit momentum will accelerate and hit a new high in 3Q24E.</li><li>We revised up our core profit forecasts for 2024-26E by 3-6%, reflecting a higher-than-expected profit margin and operating expenses to sales in 1Q24.</li></ul>

The 2Q24E sales and profit are expected to grow 21% YoY and 9% QoQ, respectively, hitting new records.With the peak sales season in overseas markets in 3Q, profit momentum will accelerate and hit a new high in 3Q24E.We revised up our core profit forecasts for 2024-26E by 3-6%, reflecting a higher-than-expected profit margin and operating expenses to sales in 1Q24.

Sappe Tb - Strong Sales and Profit in 2Q24E; 2024-26E Earnings Forecasts Revised Up

Thematic (Sector/Industry)

<ul><li>The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.</li><li>In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.</li><li>Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. </li></ul>

The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. 

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

<ul><li>The 1Q24 profit hit a new high and marked bigger-than-expected growth due to an upbeat margin. Sales grew in line with the expectation.</li><li>1H is the peak sales season of the beverage business in Thailand and Asia, and 3Q is a good sales season for European and US markets.</li><li>We maintain our 2024E earnings forecast, with potential upside.</li></ul>

The 1Q24 profit hit a new high and marked bigger-than-expected growth due to an upbeat margin. Sales grew in line with the expectation.1H is the peak sales season of the beverage business in Thailand and Asia, and 3Q is a good sales season for European and US markets.We maintain our 2024E earnings forecast, with potential upside.

Sappe -1Q24 Sales and Profit Growth Hit New Highs

<ul><li>The 1Q24E core profit is expected to have grown 20% YoY and 123% QoQ, driven by overseas sales growth, especially in the Middle East and the US, as well as a stronger gross profit margin YoY and QoQ.</li><li>1H is the peak sales season of the beverage market domestically and in Asia, while 3Q is a good sales season for European and US markets. We maintain our 2024E core profit forecast.</li><li>KTX switches to a Neutral rating, with a fair value of Bt95, based on the earnings yield and a required rate of return of 4.5% (vs. Outperform with a FV of Bt93.32 previously).</li></ul>

The 1Q24E core profit is expected to have grown 20% YoY and 123% QoQ, driven by overseas sales growth, especially in the Middle East and the US, as well as a stronger gross profit margin YoY and QoQ.1H is the peak sales season of the beverage market domestically and in Asia, while 3Q is a good sales season for European and US markets. We maintain our 2024E core profit forecast.KTX switches to a Neutral rating, with a fair value of Bt95, based on the earnings yield and a required rate of return of 4.5% (vs. Outperform with a FV of Bt93.32 previously).

Sappe -1Q24E Sales Growth and Core Profit to Hit New Highs

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 - 2Q24E Sales and Profit to Hit New Record Highs

2Q24E core profit is expected to have grown 19% YoY and 7% QoQ driven by increased overseas sales growth and GPM YoY and QoQ.

Krungthai XSpring

Sappe Tb - Strong Sales and Profit in 2Q24E; 2024-26E Earnings Forecasts Revised Up

We revised up our core profit forecasts for 2024-26E by 3-6%, reflecting a higher-than-expected profit margin and operating expenses to sales in 1Q24.

Krungthai XSpring

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits

Krungthai XSpring

Sappe -1Q24 Sales and Profit Growth Hit New Highs

The 1Q24 profit hit a new high and marked bigger-than-expected growth due to an upbeat margin. Sales grew in line with the expectation.

Krungthai XSpring

Sappe -1Q24E Sales Growth and Core Profit to Hit New Highs

KTX switches to a Neutral rating, with a fair value of Bt95, based on the earnings yield and a required rate of return of 4.5% (vs. Outperform with...

Krungthai XSpring

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