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

<ul>
<li>Maintain BUY rating, with a TP of Bt445, based on 10.6xPE’22E,which is Asia ex-Japan Materials Sector. The recent SCGC spin-off deal provides a catalyst path for sweet entry to accumulate</li>
<li>Unlock value potential through the SCGC spin-off, growth prospects from Vietnam &amp; Indonesia, Vinyl, green polymer, and capture new megatrends.</li>
<li>Uphold positive on 22E outlook, upon demand recovery for both CBM and packaging units post-lockdown, along with higher chemical prices.</li>
</ul>


Maintain BUY rating, with a TP of Bt445, based on 10.6xPE’22E,which is Asia ex-Japan Materials Sector. The recent SCGC spin-off deal provides a catalyst path for sweet entry to accumulate
Unlock value potential through the SCGC spin-off, growth prospects from Vietnam &amp; Indonesia, Vinyl, green polymer, and capture new megatrends.
Uphold positive on 22E outlook, upon demand recovery for both CBM and packaging units post-lockdown, along with higher chemical prices.


SCC: IPO of SCGC Will Unlock Potential Growth

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

<ul>
<li>The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.</li>
<li>The first week of the year saw Insights on <a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a> which took a stake in <a href="https://www.smartkarma.com/entities/allo-bank-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:33551:1" rel="noopener">Allo Bank Indonesia</a> plus <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> as <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent</a> reduced its stake. </li>
<li>In Thailand, <a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> wrote on debt collector <a href="https://www.smartkarma.com/entities/jmt-network-services-pcl" target="_blank" data-smartkarma-citation="entities:8581:1" rel="noopener">JMT Network Services (JMT TB)</a> with a number of results pre-views including on Thai banks and <a href="https://www.smartkarma.com/entities/siam-cement-pcl-the" target="_blank" data-smartkarma-citation="entities:2589:1" rel="noopener">Siam Cement (SCC TB)</a>. </li>
</ul>


The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
The first week of the year saw Insights on Bukalapak (BUKA IJ) which took a stake in Allo Bank Indonesia plus Sea Ltd (SE US) as Tencent reduced its stake. 
In Thailand, Daniel Tabbush wrote on debt collector JMT Network Services (JMT TB) with a number of results pre-views including on Thai banks and Siam Cement (SCC TB). 


The Week That Was in ASEAN@Smartkarma - Bukalapak's Bank, Thailand Debt Restructurer, and Sea Ltd

<ul>
<li>We expect 4Q21 earnings to recover from 3Q bottom quarter, driven by higher petrochemical spreads, gradual rise in CBM demand volume, and consolidation in packaging business.   </li>
<li>Expect 4Q21 revenue to grow both YoY and QoQ, through higher chemical prices, and cement demand from resumption of construction projects.</li>
<li>Maintain positive on 2022 outlook, following reopening economic activities should see demand recovery for both CBM and packaging units. Likewise, chemical spreads are cushion by higher prices, despite feedstock hike. </li>
</ul>


We expect 4Q21 earnings to recover from 3Q bottom quarter, driven by higher petrochemical spreads, gradual rise in CBM demand volume, and consolidation in packaging business.   
Expect 4Q21 revenue to grow both YoY and QoQ, through higher chemical prices, and cement demand from resumption of construction projects.
Maintain positive on 2022 outlook, following reopening economic activities should see demand recovery for both CBM and packaging units. Likewise, chemical spreads are cushion by higher prices, despite feedstock hike. 


SCC: CBM & Packaging Are White Knights to Drive 2022 Earnings

Indocement Tunggal Prakarsa / Equity Bottom-Up

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<p><span data-preserver-spaces="true">Given we are now coming out of Indonesia's latest wave of COVID-19 and mobility and economic activity is resuming , we see <a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> as an interesting proxy for the recovery, given its exposure to West Java, infrastructure spending, and the recovering residential property market </span></p>
</div>
<p><a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" rel="noopener"><span data-preserver-spaces="true">Indocement Tunggal Prakarsa (INTP IJ)</span></a><span data-preserver-spaces="true"> released a solid set of 1H2021 results, with an increase in revenue of +8.0% YoY on the back of an increase in cement volume.  </span><span data-preserver-spaces="true">EBITDA margins improved from 15.5% to 19.2% due to savings in operating expenses and gains in other operating income, leading to an EBITDA increase of +33.6% YoY to IDR1,280.6bn. <a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" rel="noopener"></a></span><span data-preserver-spaces="true"> </span></p>
<section class="figure">One major cost pressure comes from rising coal prices, which have increased significantly over the past year and the company has been continually both increasing its usage of low calorific coal and alternative fuels over the past 5-years to offset this.</section>
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<p><a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> has a strong focus on improving its emissions, with assistance from the Heidelberg Cement Technology Centre, with a road map in place for energy efficiency and CO2 reductions.</p>
<p>The fact that around 78% of cement sales at <a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> is in bags makes branding all the more important and as a result the company is quite focused on promoting the brand through TV and social media channels.</p>
<section class="figure">The company continues with its digitalisation and has developed a fully digitalised ordering system with real time data which helps the company's sales to achieve better results both on ordering as well as on pricing.</section>
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<p><a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> estimates that national cement domestic growth will increase by +5% for FY2021 with the resumption of more infrastructure projects and private projects in 2H2021 plus more activity in residential property.</p>
<p>The company's expansion will be focused on expanding its distribution channels through possible new terminals and barge or vessel ownership, as well as potentially exploring M&amp;A opportunities. </p>
<p><span data-preserver-spaces="true"><a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> trades on 11.1x FY21E EV/EBITDA and 9.9x FY22E EV/EBITDA versus its 5-year average forward EV/EBITDA of 15x, making the company look attractive from a valuation perspective. </span></p>


Given we are now coming out of Indonesia's latest wave of COVID-19 and mobility and economic activity is resuming , we see Indocement Tunggal Prakarsa (INTP IJ) as an interesting proxy for the recovery, given its exposure to West Java, infrastructure spending, and the recovering residential property market 

Indocement Tunggal Prakarsa (INTP IJ) released a solid set of 1H2021 results, with an increase in revenue of +8.0% YoY on the back of an increase in cement volume.  EBITDA margins improved from 15.5% to 19.2% due to savings in operating expenses and gains in other operating income, leading to an EBITDA increase of +33.6% YoY to IDR1,280.6bn.  
One major cost pressure comes from rising coal prices, which have increased significantly over the past year and the company has been continually both increasing its usage of low calorific coal and alternative fuels over the past 5-years to offset this.



Indocement Tunggal Prakarsa (INTP IJ) has a strong focus on improving its emissions, with assistance from the Heidelberg Cement Technology Centre, with a road map in place for energy efficiency and CO2 reductions.
The fact that around 78% of cement sales at Indocement Tunggal Prakarsa (INTP IJ) is in bags makes branding all the more important and as a result the company is quite focused on promoting the brand through TV and social media channels.
The company continues with its digitalisation and has developed a fully digitalised ordering system with real time data which helps the company's sales to achieve better results both on ordering as well as on pricing.





Indocement Tunggal Prakarsa (INTP IJ) estimates that national cement domestic growth will increase by +5% for FY2021 with the resumption of more infrastructure projects and private projects in 2H2021 plus more activity in residential property.
The company's expansion will be focused on expanding its distribution channels through possible new terminals and barge or vessel ownership, as well as potentially exploring M&amp;A opportunities. 
Indocement Tunggal Prakarsa (INTP IJ) trades on 11.1x FY21E EV/EBITDA and 9.9x FY22E EV/EBITDA versus its 5-year average forward EV/EBITDA of 15x, making the company look attractive from a valuation perspective. 

Indocement Tunggal Prakasa (INTP IJ) - Bulky Recovery in Place

<p><strong>We maintain HOLD rating with 2022E target price of Bt445.00, derived from 12.5xPE’22E,  which is its 3-year trading average. Given the earnings outlook we view neutral for the stock.</strong></p><div>• SCC delivered impressive performance in 2Q21, mainly driven by petrochemical business.</div><div></div><div>• Earnings should retreat HoH in 2H21E, given the contraction of petrochemical business.</div><div></div><div>• We revised up 2021E earnings forecast by 5% to reflect better than expect 2Q21 result. However, we trimmed 2022E earnings by 5%, given the declining in petrochemical spread.</div><div></div><div>• SCC subscribed Chandra Asri’s equity rights issue, its associated company in Indonesia, to maintain its stake in the company. The budget is about 2% of SCC total asset.</div><div></div><div>• For LSP project in Vietnam, the progress is on planned at 83%. The commercialization is expected in 1H23.</div>

We maintain HOLD rating with 2022E target price of Bt445.00, derived from 12.5xPE’22E,  which is its 3-year trading average. Given the earnings outlook we view neutral for the stock.• SCC delivered impressive performance in 2Q21, mainly driven by petrochemical business.• Earnings should retreat HoH in 2H21E, given the contraction of petrochemical business.• We revised up 2021E earnings forecast by 5% to reflect better than expect 2Q21 result. However, we trimmed 2022E earnings by 5%, given the declining in petrochemical spread.• SCC subscribed Chandra Asri’s equity rights issue, its associated company in Indonesia, to maintain its stake in the company. The budget is about 2% of SCC total asset.• For LSP project in Vietnam, the progress is on planned at 83%. The commercialization is expected in 1H23.

Thailand

The Siam Cement Public Company Limited is a diversified industrial company. The Company's operations include cement manufacturing, petrochemicals manufacturing, paper manufacturing, building product manufacturing, and distribution.

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Siam Cement (SCC TB)

SCC: IPO of SCGC Will Unlock Potential Growth

Maintain BUY rating, with a TP of Bt445, based on 10.6xPE’22E, which is Asia ex-Japan Materials Sector. The recent SCGC spin-off deal provides a...

Pi Securities PCL, Thailand

The Week That Was in ASEAN@Smartkarma - Bukalapak's Bank, Thailand Debt Restructurer, and Sea Ltd

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity...

Angus Mackintosh

SCC: CBM & Packaging Are White Knights to Drive 2022 Earnings

We expect 4Q21 earnings to recover from 3Q bottom quarter, driven by higher petrochemical spreads, gradual rise in CBM demand volume, and...

Pi Securities PCL, Thailand

Indocement Tunggal Prakasa (INTP IJ) - Bulky Recovery in Place

We see Indocement as an interesting and high-quality proxy to the recovery in the Indonesian economy, given its exposure to infrastructure through...

Angus Mackintosh

SCC : Earnings Should Retreat in 2H21E

We maintain HOLD rating with 2022E target price of Bt445.00, derived from 12.5xPE’22E, which is its 3-year trading average. Given the earnings...

Pi Securities PCL, Thailand

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