Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Thematic (Sector/Industry)

During the weekend, we attended a presentation by Vacharapong Potjaneenont, who is Manager for Strategy &amp; Business Development of <a href="https://www.smartkarma.com/entities/214" target="_blank" data-smartkarma-citation="entities:214:1">Siam Commercial Bank Pub Co (SCB TB)</a>, and we found it pretty interesting. Basically, his view is that fintech has been around since the 50s, and in his view, we are on the third wave...There's something with the number three. I recall someone else (maybe Microsoft CEO Nadella) saying we are on the third Industrial or Digital Revolution. Well, let's just indulge the…

During the weekend, we attended a presentation by Vacharapong Potjaneenont, who is Manager for Strategy &amp; Business Development of Siam Commercial Bank Pub Co (SCB TB), and we found it pretty interesting. Basically, his view is that fintech has been around since the 50s, and in his view, we are on the third wave...There's something with the number three. I recall someone else (maybe Microsoft CEO Nadella) saying we are on the third Industrial or Digital Revolution. Well, let's just indulge the…

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

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Equity Bottom-Up

SIS Distribution (Thailand) / Equity Bottom-Up

<ul><li>SIS (SECIS)’s 2QFY25 revenue was up 6.3% YoY/4.4% QoQ at INR32.68b, largely in line with our estimate of INR34.51b.</li><li>Growth was led by Security Solutions – International business (up 5.6% QoQ/7.0% YoY).</li><li>EBITDA margin came in at 4.4% (vs.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SIS (SECIS)’s 2QFY25 revenue was up 6.3% YoY/4.4% QoQ at INR32.68b, largely in line with our estimate of INR34.51b.Growth was led by Security Solutions – International business (up 5.6% QoQ/7.0% YoY).EBITDA margin came in at 4.4% (vs.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sis - International Business Faces Short-Term Hurdles

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

<ul>
<li>We maintain our BUY rating and roll-over our TP to Bt31.75(-3% from previous TP) based on 12.9xPE’23E (+0.5S.D. of 5-year trading history). 3Q22 earnings was disappointing and below our expectation</li>
<li>3Q22 earnings was impacted by inflation 3Q22 net profit was at Bt186m (-14% YoY, -4% QoQ). Stripping FX gains, core profit stood at Bt 144m (-19%YoY, -17%QoQ) a nine-quarter low.</li>
<li>Revenue in 3Q22 registered at Bt6.7bn (-21% YoY, -11% QoQ). YoY and QoQ decline was caused by lower Phone and Consumer sales. We believe that SIS’s retail-serving clients</li>
</ul>


We maintain our BUY rating and roll-over our TP to Bt31.75(-3% from previous TP) based on 12.9xPE’23E (+0.5S.D. of 5-year trading history). 3Q22 earnings was disappointing and below our expectation
3Q22 earnings was impacted by inflation 3Q22 net profit was at Bt186m (-14% YoY, -4% QoQ). Stripping FX gains, core profit stood at Bt 144m (-19%YoY, -17%QoQ) a nine-quarter low.
Revenue in 3Q22 registered at Bt6.7bn (-21% YoY, -11% QoQ). YoY and QoQ decline was caused by lower Phone and Consumer sales. We believe that SIS’s retail-serving clients


<ul>
<li>We maintain our BUY rating but cut TP by 44% to Bt32.75  based on 11.8xPE’1H23E (down from 19.7xPE’22E previously) to reflect our more conservative valuation on its outlook.Despite weak 1H22</li>
<li>1H22 earnings was flat YoY 2Q22 net profit was at Bt194mn (flat YoY, flat QoQ). Both YoY and QoQ remained flat as revenue decline was offset by gross margin expansion.</li>
<li>Revenue in 2Q22 stood at Bt7.5bn (-5%YoY,-7%QoQ). Phone segment was the largest contributor to the YoY and QoQ drop. Meanwhile, gross margin was at 6.5% (+0.8ppts YoY, +0.6ppts QoQ). </li>
</ul>


We maintain our BUY rating but cut TP by 44% to Bt32.75  based on 11.8xPE’1H23E (down from 19.7xPE’22E previously) to reflect our more conservative valuation on its outlook.Despite weak 1H22
1H22 earnings was flat YoY 2Q22 net profit was at Bt194mn (flat YoY, flat QoQ). Both YoY and QoQ remained flat as revenue decline was offset by gross margin expansion.
Revenue in 2Q22 stood at Bt7.5bn (-5%YoY,-7%QoQ). Phone segment was the largest contributor to the YoY and QoQ drop. Meanwhile, gross margin was at 6.5% (+0.8ppts YoY, +0.6ppts QoQ). 


<ul>
<li>Analyst meeting came out with positive tone. Cloud and cybersecurity businesses should grow rapidly over the next few years.Current inventory stock provides 4 to 6 months buffer from Chinese lockdown </li>
<li>We believe that cloud and cybersecurity will drive earnings at a CAGR of 18.5% between 2021-24E, led sales growth at 8.6% CAGR and slightly improved margins. Management maintains strong outlook </li>
<li>We expect 1Q22E earnings at Bt201m(+6%QoQ, +6%YoY)driven QoQ by GPM expansion. We recommend accumulating shares now as earnings in 1H22 should be the lowest of the year due to seasonality.</li>
</ul>


Analyst meeting came out with positive tone. Cloud and cybersecurity businesses should grow rapidly over the next few years.Current inventory stock provides 4 to 6 months buffer from Chinese lockdown 
We believe that cloud and cybersecurity will drive earnings at a CAGR of 18.5% between 2021-24E, led sales growth at 8.6% CAGR and slightly improved margins. Management maintains strong outlook 
We expect 1Q22E earnings at Bt201m(+6%QoQ, +6%YoY)driven QoQ by GPM expansion. We recommend accumulating shares now as earnings in 1H22 should be the lowest of the year due to seasonality.


SIS: Cloud and Cybersecurity Will Be the New Main Focus for Growth

Thailand

SIS Distribution (Thailand) Public Company Limited is a Thailand-based provider and distributor of end-to-end information technology solutions. The company engages in the wholesale business of computers, software, peripherals, and various office automation equipment, serving a customer base of over 10,000 businesses. Headquartered in Bangkok, Thailand, the company was established in 1998.

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SIS Distribution (Thailand) (SIS TB)

Silicon Sequel: SCB on Fintech

During the weekend, we attended a presentation by Vacharapong Potjaneenont, who is Manager for Strategy & Business Development of Siam...

Athaporn Arayasantiparb, CFA

Sis - International Business Faces Short-Term Hurdles

SIS (SECIS)’s 2QFY25 revenue was up 6.3% YoY/4.4% QoQ at INR32.68b, largely in line with our estimate of INR34.51b. Growth was led by Security...

Motilal Oswal

SIS : 2023 Outlook Remains Bright

We maintain our BUY rating and roll-over our TP to Bt31.75 (-3% from previous TP) based on 12.9xPE’23E (+0.5S.D. of 5-year trading history). 3Q22...

Pi Securities PCL, Thailand

SIS : 2H22 Earnings Should Improve HoH

We maintain our BUY rating but cut TP by 44% to Bt32.75 based on 11.8xPE’1H23E (down from 19.7xPE’22E previously) to reflect our more conservative...

Pi Securities PCL, Thailand

SIS: Cloud and Cybersecurity Will Be the New Main Focus for Growth

Analyst meeting came out with positive tone. Cloud and cybersecurity businesses should grow rapidly over the next few years. Current inventory...

Pi Securities PCL, Thailand

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