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 rating but cut TP by 6% to Bt174  by roll-over target PE to 12.8xPE’23E,which is pegged to -1SD of its 10-yrs trailing mean.With challenging near-term outlook </li>
<li>2Q22 core profit grew both YoY and QoQ Excluding Bt353m loss from extra items, its 2Q22 core profit was at Bt1.7bn (+16%YoY,+13%QoQ).The YoY growth was driven by gross margin expansion</li>
<li>Neutral tone from the analyst’s meeting We foresee 3Q22 core profit to decline QoQ due to seasonal rout during the raining season but to grow YoY, as base effect kicks </li>
</ul>


We maintain our BUY rating but cut TP by 6% to Bt174  by roll-over target PE to 12.8xPE’23E,which is pegged to -1SD of its 10-yrs trailing mean.With challenging near-term outlook 
2Q22 core profit grew both YoY and QoQ Excluding Bt353m loss from extra items, its 2Q22 core profit was at Bt1.7bn (+16%YoY,+13%QoQ).The YoY growth was driven by gross margin expansion
Neutral tone from the analyst’s meeting We foresee 3Q22 core profit to decline QoQ due to seasonal rout during the raining season but to grow YoY, as base effect kicks 


SCCC : Equity Income Was Key Driver to 2Q22 Result

<ul>
<li>Maintain BUY rating with a new TP of B185.00 (down 9% from previous TP) derived from 13.2xPE’22E which is close to -1SD of 10-years trading average.</li>
<li>Excluding extraordinary items, 1Q22 core profit was at Bt1.5bn (+45%YoY, +20%QoQ), The YoY rose on solid revenue growth (+21%YoY), and equity income (+23%YoY).</li>
<li>We expect earnings trend to gear down QoQ in 2Q22, drag by mounting cost pressures behind the surging input costs upon the unfavorable macro dynamics and seasonality.</li>
</ul>


Maintain BUY rating with a new TP of B185.00 (down 9% from previous TP) derived from 13.2xPE’22E which is close to -1SD of 10-years trading average.
Excluding extraordinary items, 1Q22 core profit was at Bt1.5bn (+45%YoY, +20%QoQ), The YoY rose on solid revenue growth (+21%YoY), and equity income (+23%YoY).
We expect earnings trend to gear down QoQ in 2Q22, drag by mounting cost pressures behind the surging input costs upon the unfavorable macro dynamics and seasonality.


<ul>
<li>Reiterate BUY rating with TP of Bt202 based on 14.4xPE’22E,which is close to -1SD of its 10-years mean. Our rating factors in robust outlook on cement demand recovery, hence offering</li>
<li>Its 4Q21 net profit was at 1.1bn (+14%YoY, +57%QoQ), rebound fueled by strong revenue growth, together with margin expansion.</li>
<li>Foresee 1Q22 earnings to remain strong QoQ, backed by demand recovery post-lockdown and heighten cement prices in local and overseas market.</li>
</ul>


Reiterate BUY rating with TP of Bt202 based on 14.4xPE’22E,which is close to -1SD of its 10-years mean. Our rating factors in robust outlook on cement demand recovery, hence offering
Its 4Q21 net profit was at 1.1bn (+14%YoY, +57%QoQ), rebound fueled by strong revenue growth, together with margin expansion.
Foresee 1Q22 earnings to remain strong QoQ, backed by demand recovery post-lockdown and heighten cement prices in local and overseas market.


SCCC: Cement Sets to Swing into Recovery Mode in 2022

<p><strong>We expect its core earnings to drop to the seven quarter low in 3Q21 then should rebound in 4Q21 onwards.</strong></p><div>• Expect its 3Q21 core earnings at Bt663m (-26%YoY,-14%QoQ), caused by mute sales and escalating energy costs, but should be the bottom quarter.</div><div></div><div>• Expect earnings to rebound  in 4Q21 onwards backed by resuming construction in Thailand and brighter outlook in ASEAN market after lockdown easing.</div><div></div><div>• Equity income contribution from business in Cambodia should be a growth driver in 2022-2023.</div><div>
<br>
</div><p><strong>We maintain our BUY rating and rollover our TP by 8% to Bt207 based on  14.7xPE’22E target, which is its pre-COVID level. Our rating reflect positive outlook on cement demand recovery post-COVID in both domestic and export markets. The company will also benefit from diversifying its business into fast-growing market in Asia in long-term.</strong></p>

We expect its core earnings to drop to the seven quarter low in 3Q21 then should rebound in 4Q21 onwards.• Expect its 3Q21 core earnings at Bt663m (-26%YoY,-14%QoQ), caused by mute sales and escalating energy costs, but should be the bottom quarter.• Expect earnings to rebound  in 4Q21 onwards backed by resuming construction in Thailand and brighter outlook in ASEAN market after lockdown easing.• Equity income contribution from business in Cambodia should be a growth driver in 2022-2023.
 
We maintain our BUY rating and rollover our TP by 8% to Bt207 based on  14.7xPE’22E target, which is its pre-COVID level. Our rating reflect positive outlook on cement demand recovery post-COVID in both domestic and export markets. The company will also benefit from diversifying its business into fast-growing market in Asia in long-term.

SCCC: Expect 3Q21 Earnings to Be Bottom Quarter

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

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

Thailand

Siam City Cement Public Company Limited produces and distributes cement under branded names with various type of cement for different applications.  The Company also also produces and distributes ready-mix concrete and aggregates under branded names, as well as branded wood-replacement products.

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Siam City Cement (SCCC TB)

SCCC : Equity Income Was Key Driver to 2Q22 Result

We maintain our BUY rating but cut TP by 6% to Bt174 by roll-over target PE to 12.8xPE’23E, which is pegged to -1SD of its 10-yrs trailing mean....

Pi Securities PCL, Thailand

SCCC: Gradual Recovery Intact

Maintain BUY rating with a new TP of B185.00 (down 9% from previous TP) derived from 13.2xPE’22E which is close to -1SD of 10-years trading average.

Pi Securities PCL, Thailand

SCCC: Cement Sets to Swing into Recovery Mode in 2022

Reiterate BUY rating with TP of Bt202 based on 14.4xPE’22E, which is close to -1SD of its 10-years mean. Our rating factors in robust outlook on...

Pi Securities PCL, Thailand

SCCC: Expect 3Q21 Earnings to Be Bottom Quarter

We expect its core earnings to drop to the seven quarter low in 3Q21 then should rebound in 4Q21 onwards. We maintain our BUY rating and rollover...

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

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