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>We maintain our BUY call with a TP of Bt445 based on 13.7xPE’22E,which is close to its 10-years trailing mean. We recommend investors to accumulate in light of 4% yield </li>
<li>Solid QoQ improvement expected in 2Q22 core profit We forecast 2Q22 core profit at Bt9.2bn,decline 46%YoY but edge-up 19%QoQ.The YoY erosion is due to weaker assumed gross margin of 16.2%</li>
<li>We foresee chemical unit’s profit to fall 63%YoY but to march up 8%QoQ with wider spreads. In our view, the QoQ uptrend is underpin by solid PVC spread (+41%QoQ), despite </li>
</ul>


We maintain our BUY call with a TP of Bt445 based on 13.7xPE’22E,which is close to its 10-years trailing mean. We recommend investors to accumulate in light of 4% yield 
Solid QoQ improvement expected in 2Q22 core profit We forecast 2Q22 core profit at Bt9.2bn,decline 46%YoY but edge-up 19%QoQ.The YoY erosion is due to weaker assumed gross margin of 16.2%
We foresee chemical unit’s profit to fall 63%YoY but to march up 8%QoQ with wider spreads. In our view, the QoQ uptrend is underpin by solid PVC spread (+41%QoQ), despite 


SCC : Meaningful QoQ Recovery Expected in 2Q22

<ul>
<li>Maintain BUY rating with a TP of Bt445.00, based on 13.7xPE’22E, which is close to its 10-years trading mean.</li>
<li>Unlock value potential through SCGCs IPO, citing a stronger position in PE/PP/PVC, fuel by solid olefins demand in Vietnam and Indonesia, increasing HVA products and Vinyl.</li>
<li>LSP project is on planned at 93% completion, which is expected to COD in 1H23. We view the new capacity to come into operation in times of better petrochemical outlook.</li>
</ul>


Maintain BUY rating with a TP of Bt445.00, based on 13.7xPE’22E, which is close to its 10-years trading mean.
Unlock value potential through SCGCs IPO, citing a stronger position in PE/PP/PVC, fuel by solid olefins demand in Vietnam and Indonesia, increasing HVA products and Vinyl.
LSP project is on planned at 93% completion, which is expected to COD in 1H23. We view the new capacity to come into operation in times of better petrochemical outlook.


SCC: SCGC’s Spin-Off Moves a Step Closer

<ul>
<li>Maintain BUY rating with a TP of Bt445.00 based on 13.7xPE’22E which is close to its 10-years trailing average.</li>
<li>We foresee 1Q22 core profit to be the bottom quarter at Bt7bn (-53%YoY,-2%QoQ), pressured by tighter chemical spreads after naphtha price soared from higher oil price.</li>
<li>We expect earnings recovery from 2Q22 onwards, following improve chemical spreads driven by prices catching up with rising costs, plus better CBM and packaging unit.</li>
</ul>


Maintain BUY rating with a TP of Bt445.00 based on 13.7xPE’22E which is close to its 10-years trailing average.
We foresee 1Q22 core profit to be the bottom quarter at Bt7bn (-53%YoY,-2%QoQ), pressured by tighter chemical spreads after naphtha price soared from higher oil price.
We expect earnings recovery from 2Q22 onwards, following improve chemical spreads driven by prices catching up with rising costs, plus better CBM and packaging unit.


SCC: Expect a Soft Start in 1Q22 Amid Cost Pressure

<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

<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

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)

SCC : Meaningful QoQ Recovery Expected in 2Q22

We maintain our BUY call with a TP of Bt445 based on 13.7xPE’22E, which is close to its 10-years trailing mean.We recommend investors to accumulate...

Pi Securities PCL, Thailand

SCC: SCGC’s Spin-Off Moves a Step Closer

Maintain BUY rating with a TP of Bt445.00, based on 13.7xPE’22E, which is close to its 10-years trading mean. Unlock value potential through SCGCs...

Pi Securities PCL, Thailand

SCC: Expect a Soft Start in 1Q22 Amid Cost Pressure

Maintain BUY rating with a TP of Bt445.00 based on 13.7xPE’22E which is close to its 10-years trailing average. We foresee 1Q22 core profit to be...

Pi Securities PCL, Thailand

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

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

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