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.

Thematic (Sector/Industry)

<div><div><div><div><ul><li>We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.</li><li>Our recommended stocks are CBG and SCGP.</li><li><div><div><p>The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.</p></div></div></li></ul></div></div></div></div>

We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.Our recommended stocks are CBG and SCGP.The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

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

<p><strong>Crude: Bright E&amp;P business performance from recovering crude price</strong></p><ul><li>We expect the widespread deployment of COVID-19 vaccines, continued support from OPEC+ on regulating the crude supply, and post COVID-19 demand spike in crude products (Jet fuel, gasoline, diesel etc.) will support the Brent crude to continue the upward rally in 2021. <strong> PTTEP is our top pick</strong>, the E&amp;P business will most benefit from recovering crude price.</li></ul><p><strong>Refinery: Improving product demand to drive GRM</strong></p><ul><li>Thai refiners’ share prices are trading at 10-to-20% discount to their historical PBV multiples mainly due to the COVID-19 impact, which dragged the GRM to negative territory along with huge inventory loss. We have a positive view on 2021 refinery performance and expect the GRM to gradually pick up each quarter on the back of recovering products spreads (especially Jet fuel). <strong>TOP is our top pick </strong>among refineries considering the cheap valuation (0.9x PBV’21, 20% below its 5 year trading average), and upside from current share price (+18%).</li></ul><p><strong>Petrochemicals: Benefit from global recovery</strong></p><ul><li>We foresee a strong recovery in petrochemicals to continue in 1H21. Olefins (HDPE, PP) has already recovered back to its 5-year average ahead of Chinese New Year. Meanwhile, aromatics (PX, BZ) to be supported by growth in textile and automotive industry and new capacity in downstream products (PTA). <strong>PTTGC is our top pick</strong> as overall businesses benefit from petrochemical upswing. The company will also realize 10% more capacity in PO/Polyols unit by 1Q21.</li></ul><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/184/642/original/SMK1.png?1611645077" class="editor-image img-responsive" data-smartkarma-image-id="184642"></figure><p style="text-align: center;"><strong>Valuation Summary*</strong></p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/184/643/original/Picture1.jpg?1611645252" class="editor-image img-responsive" data-smartkarma-image-id="184643"></figure></section><p style="text-align: center;"><em>Source: CGS Research, Company data, SET</em></p></section>

Crude: Bright E&amp;P business performance from recovering crude priceWe expect the widespread deployment of COVID-19 vaccines, continued support from OPEC+ on regulating the crude supply, and post COVID-19 demand spike in crude products (Jet fuel, gasoline, diesel etc.) will support the Brent crude to continue the upward rally in 2021.  PTTEP is our top pick, the E&amp;P business will most benefit from recovering crude price.Refinery: Improving product demand to drive GRMThai refiners’ share prices are trading at 10-to-20% discount to their historical PBV multiples mainly due to the COVID-19 impact, which dragged the GRM to negative territory along with huge inventory loss. We have a positive view on 2021 refinery performance and expect the GRM to gradually pick up each quarter on the back of recovering products spreads (especially Jet fuel). TOP is our top pick among refineries considering the cheap valuation (0.9x PBV’21, 20% below its 5 year trading average), and upside from current share price (+18%).Petrochemicals: Benefit from global recoveryWe foresee a strong recovery in petrochemicals to continue in 1H21. Olefins (HDPE, PP) has already recovered back to its 5-year average ahead of Chinese New Year. Meanwhile, aromatics (PX, BZ) to be supported by growth in textile and automotive industry and new capacity in downstream products (PTA). PTTGC is our top pick as overall businesses benefit from petrochemical upswing. The company will also realize 10% more capacity in PO/Polyols unit by 1Q21.Valuation Summary*
Source: CGS Research, Company data, SET

Energy Sector : Overweight- Oil Demand Recovery to Drive 2021 Earnings

Equity Bottom-Up

<ul><li>The SET Index is expected to move sideways, with the resistance at 1,684/1,690 points and the support at 1,664/1,655 points.</li><li>Downward pressure will come from the weakening of the energy sector after the steep fall of oil prices yesterday, alongside the decline of DELTA's share price.</li><li>Tactically, we recommend buying anti-commodity sectors that benefit from the fall in global crude oil prices, such as the construction materials, packaging materials and power sectors.</li></ul>

The SET Index is expected to move sideways, with the resistance at 1,684/1,690 points and the support at 1,664/1,655 points.Downward pressure will come from the weakening of the energy sector after the steep fall of oil prices yesterday, alongside the decline of DELTA's share price.Tactically, we recommend buying anti-commodity sectors that benefit from the fall in global crude oil prices, such as the construction materials, packaging materials and power sectors.

<ul>
<li>The 3Q22 net profit fall to a multi-year low of Bt2.4bn, shallow than ours and consensus expectation.The analyst meeting also came out in a negative tone indicating a bleak 4Q22-2023 </li>
<li>3Q22 earnings fall to a multi-year low The 3Q22 net profit fall to Bt2.4bn (-64% YoY, -75% QoQ), mainly dragged by chemicals and cement-building material (CBM) businesses.</li>
<li>Expect olefins downcycle prolong till 2024 The sluggish petrochemical segment performance should continue in 4Q22 due to inferior spreads of olefins, and PVC. Olefins spreads viz</li>
</ul>


The 3Q22 net profit fall to a multi-year low of Bt2.4bn, shallow than ours and consensus expectation.The analyst meeting also came out in a negative tone indicating a bleak 4Q22-2023 
3Q22 earnings fall to a multi-year low The 3Q22 net profit fall to Bt2.4bn (-64% YoY, -75% QoQ), mainly dragged by chemicals and cement-building material (CBM) businesses.
Expect olefins downcycle prolong till 2024 The sluggish petrochemical segment performance should continue in 4Q22 due to inferior spreads of olefins, and PVC. Olefins spreads viz


SCC : Bleak 4Q22-2023 Outlook Due to Petrochemical Trough

<ul>
<li>We keep our BUY call with a TP of Bt445 derived from 13.7xPE’22E, which is close to its 10-years trailing average.We recommend accumulating to capture better 2H22 outlook and beyond</li>
<li>Solid 2Q22 core profit result as expected SCC’s 2Q22 core profit was at Bt10bn (-42%YoY, +29%QoQ), which was in-line with our estimates. Behind the resilient QoQ rise is attributed </li>
<li>Petrochemical unit’s earnings was at Bt3.7bn (-64%YoY, +3%QoQ). The QoQ slightly grew on the back of seasonal high dividend income.</li>
</ul>


We keep our BUY call with a TP of Bt445 derived from 13.7xPE’22E, which is close to its 10-years trailing average.We recommend accumulating to capture better 2H22 outlook and beyond
Solid 2Q22 core profit result as expected SCC’s 2Q22 core profit was at Bt10bn (-42%YoY, +29%QoQ), which was in-line with our estimates. Behind the resilient QoQ rise is attributed 
Petrochemical unit’s earnings was at Bt3.7bn (-64%YoY, +3%QoQ). The QoQ slightly grew on the back of seasonal high dividend income.


SCC : 2Q22 Core Profit Recovered as Expected

Thailand

Siam Cement Group (SCG) is a diversified industrial conglomerate operating in cement-building materials, chemicals, and packaging. It manufactures and distributes products such as cement, ready-mixed concrete, olefins, polyolefins, and integrated packaging solutions. The company is headquartered in Bangkok, Thailand, and was founded in 1913.

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Siam Cement (SCC TB)

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth...

Krungthai XSpring

Energy Sector : Overweight- Oil Demand Recovery to Drive 2021 Earnings

Energy Sector : Overweight- Oil demand recovery to drive 2021 earnings. We expect bright E&P business performance from recovering crude price, and...

Pi Securities PCL, Thailand

Market Outlook

The SET Index is expected to move sideways, with the resistance at 1,684/1,690 points and the support at 1,664/1,655 points. Downward pressure...

Krungthai XSpring

SCC : Bleak 4Q22-2023 Outlook Due to Petrochemical Trough

The 3Q22 net profit fall to a multi-year low of Bt2.4bn, shallow than ours and consensus expectation. The analyst meeting also came out in a...

Pi Securities PCL, Thailand

SCC : 2Q22 Core Profit Recovered as Expected

We keep our BUY call with a TP of Bt445 derived from 13.7xPE’22E, which is close to its 10-years trailing average. We recommend accumulating to...

Pi Securities PCL, Thailand

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