Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

Equity Bottom-Up

<p>Five interesting news/trends we detected recently include:</p><ul>
<li>
<strong>Pa Daeng </strong>sells 7 power plants to BAFS for Bt1.7bn but then turns around to buy two hotels worth Bt5-10bn. Looks like they are moving from the defensive to recovery theme.</li>
<li>
<strong>GPSC</strong>, PTT's power arm and acquirer of Glow, announces it will increase the Group's renewable footprint from 11% to 30% in 5 years at a cost of Bt70bn.</li>
<li>
<strong>JKN diversifies outside media</strong> and targets almost doubling since 2019 to Bt3bn in 2021. Hospitals, hair clinic, drinks....nothing seems off-limits.</li>
<li>
<strong>CAT Telecom is currently looking to lease towers from private operators, </strong>poising AIS against the allies (True Corp and DTAC). We believe the allies have a slight leg up in this face-off, with DTAC enjoying the highest 4% upside.</li>
<li>
<strong>Market movements. </strong>Call this a snippet within a snippet for lack of a better word. We summarize some of the smaller movements on insider selling and IPO implications.</li>
</ul>

Five interesting news/trends we detected recently include:

Pa Daeng sells 7 power plants to BAFS for Bt1.7bn but then turns around to buy two hotels worth Bt5-10bn. Looks like they are moving from the defensive to recovery theme.

GPSC, PTT's power arm and acquirer of Glow, announces it will increase the Group's renewable footprint from 11% to 30% in 5 years at a cost of Bt70bn.

JKN diversifies outside media and targets almost doubling since 2019 to Bt3bn in 2021. Hospitals, hair clinic, drinks....nothing seems off-limits.

CAT Telecom is currently looking to lease towers from private operators, poising AIS against the allies (True Corp and DTAC). We believe the allies have a slight leg up in this face-off, with DTAC enjoying the highest 4% upside.

Market movements. Call this a snippet within a snippet for lack of a better word. We summarize some of the smaller movements on insider selling and IPO implications.


Snippets #47: Pa Daeng's Trades, Battle for CAT's 5G Network

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>We maintain Neutral rating on SPCG with new 2020E target price at Bt18.80 (from Bt22.80), derived from a discounted cash flow valuation (WACC 7.3% and terminal growth of 1.0%). This is equivalent to 7.0x PE’20E.</p><div>•SPCG posted net profit in 1Q20 of Bt749m (+8%YoY, flat QoQ).</div><div>•1Q20 earnings accounted for 29% of our 2020E forecast.</div><div>•1Q20 revenue was Bt1.46bn (+8%YoY and flat QoQ).</div><div>•Gross profit margin was 69.1%, maintained from 69.0% in 1Q19 and 69.5% in 4Q19</div><div>•SG&amp;A to sales was manageable at 5.5% (+1.0ppts YoY, -1.2ppts QoQ).
</div><div></div><p>We trimmed 2020-21E earning by 3-4%, to reflect our more conservative perspective toward solar roof business growth.</p>

We maintain Neutral rating on SPCG with new 2020E target price at Bt18.80 (from Bt22.80), derived from a discounted cash flow valuation (WACC 7.3% and terminal growth of 1.0%). This is equivalent to 7.0x PE’20E.•SPCG posted net profit in 1Q20 of Bt749m (+8%YoY, flat QoQ).•1Q20 earnings accounted for 29% of our 2020E forecast.•1Q20 revenue was Bt1.46bn (+8%YoY and flat QoQ).•Gross profit margin was 69.1%, maintained from 69.0% in 1Q19 and 69.5% in 4Q19•SG&amp;A to sales was manageable at 5.5% (+1.0ppts YoY, -1.2ppts QoQ).
We trimmed 2020-21E earning by 3-4%, to reflect our more conservative perspective toward solar roof business growth.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>Since the beginning of February, a lot of companies in Thailand have announced stock buybacks ranging from a maximum spend of THB 10m to THB 16bn. With one exception, these buybacks will be executed on the Stock Exchange of Thailand (SET).</p><p>In this Insight, we look at the SET's repurchase rules, the companies that have announced buybacks and their ability to complete the buyback, the impact of the buyback if completed, and formulate trades on some of the stocks where we see a high probability of the buyback being completed.</p>

Since the beginning of February, a lot of companies in Thailand have announced stock buybacks ranging from a maximum spend of THB 10m to THB 16bn. With one exception, these buybacks will be executed on the Stock Exchange of Thailand (SET).In this Insight, we look at the SET's repurchase rules, the companies that have announced buybacks and their ability to complete the buyback, the impact of the buyback if completed, and formulate trades on some of the stocks where we see a high probability of the buyback being completed.

Thailand Buybacks - Show of Strength or Leap of Faith?

<p><strong>We initiate coverage of SPCG with a BUY rating and a 2019E target price of Bt22.80, derived from a discounted cash flow valuation (WACC 7.0% and terminal growth of 1.0%). This is equivalent </strong><strong>to 8.4x </strong><strong>PE’19E</strong><strong>. </strong></p>
<p><strong>The story:</strong></p>
<ul>
<li>Promising industry outlook</li>
<li>Striding toward overseas opportunities</li>
<li>Expiring adder should have been priced in already</li>
<li>Expected stable earnings in 2019-21E</li>
</ul>
<p><strong>Risks:   </strong>Single source supplier</p>
<p>                Forex fluctuation</p>
<p>                Uncertainty about sunlight</p>

We initiate coverage of SPCG with a BUY rating and a 2019E target price of Bt22.80, derived from a discounted cash flow valuation (WACC 7.0% and terminal growth of 1.0%). This is equivalent to 8.4x PE’19E. 
The story:

Promising industry outlook
Striding toward overseas opportunities
Expiring adder should have been priced in already
Expected stable earnings in 2019-21E

Risks:   Single source supplier
                Forex fluctuation
                Uncertainty about sunlight

SPCG: Laying Foundations for Next Stage of Growth

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

<ul><li>Relatively strong analyst recommendation and low correlation with Western stock markets relative to its sector</li><li>SPCG has raised its goal for the solar roof business by 30% from last year with good prospects to achieve it based on growth and gov’t support</li><li>Revenue should also grow from a 30MW project starting commercial operations in April and the 480MW in Ukujima, Japan, involving construction and operation, which should start contributing in 2019</li><li>SPCG is attractive at 2018CE* 13.4% ROE/PB versus Thai Utilities at 7.9% and offers a nice 5% dividend yield</li><li>Risk: Limited growth opportunities with only one planned project</li></ul><p><em>* Consensus Estimates</em></p>

Relatively strong analyst recommendation and low correlation with Western stock markets relative to its sectorSPCG has raised its goal for the solar roof business by 30% from last year with good prospects to achieve it based on growth and gov’t supportRevenue should also grow from a 30MW project starting commercial operations in April and the 480MW in Ukujima, Japan, involving construction and operation, which should start contributing in 2019SPCG is attractive at 2018CE* 13.4% ROE/PB versus Thai Utilities at 7.9% and offers a nice 5% dividend yieldRisk: Limited growth opportunities with only one planned project* Consensus Estimates

SPCG: New Projects in Japan to Drive Growth

Thailand

SPCG Public Company Limited produces and distributes electricity from solar energy in Thailand and internationally, developing and investing in 36 solar farm projects. The company also manufactures, trades, and installs roof sheets and solar roofs, and distributes inverters. SPCG Public Company Limited was founded in 1993 and is headquartered in Bangkok, Thailand.

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SPCG (SPCG TB)

Snippets #47: Pa Daeng's Trades, Battle for CAT's 5G Network

Country Group gets busy: Selling power, buying hotels, issuing warrants, while AIS and the other two telcos duke it out to supply towers to CAT's...

Athaporn Arayasantiparb, CFA

SPCG: Stable Earnings

We maintain Neutral rating on SPCG with new 2020E target price at Bt18.80 (from Bt22.80), derived from a discounted cash flow valuation (WACC 7.3%...

Pi Securities PCL, Thailand

Thailand Buybacks - Show of Strength or Leap of Faith?

Since the beginning of February, a lot of companies in Thailand have announced stock buybacks ranging from a maximum spend of THB 10m to THB 16bn....

Brian Freitas

SPCG: Laying Foundations for Next Stage of Growth

We initiate coverage of SPCG with a BUY rating and a 2019E target price of Bt22.80, derived from a discounted cash flow valuation (WACC 7.0% and...

Pi Securities PCL, Thailand

SPCG: New Projects in Japan to Drive Growth

Relatively strong analyst recommendation and low correlation with Western stock markets relative to its sector SPCG has raised its goal for the...

A. Stotz Investment Research

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