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.

Equity Bottom-Up

Thai Foods Group Public Company Limited / Equity Bottom-Up

<ul><li>The better-than-expected 2Q24 earnings have led us to revise our 2024E core profit forecast upward by approximately 30% .</li><li>This revision implies a 10% increase in our current 12M fair value estimate from Bt4.00 to Bt4.40 (based on the earnings yield and a required return of 8.5%, reflecting a target PER of 11.7x). So we maintained “Outperform” rating for TFG.</li><li>TFG reported a 2Q24 net profit of Bt855mn. Excluding extraordinary losses of Bt242mn, core profit amounted to Bt1.1bn, surpassing expectations (vs. the expected core profit of Bt699mn) owing to a higher-than-expected gross profit of Bt200mn.</li></ul>

The better-than-expected 2Q24 earnings have led us to revise our 2024E core profit forecast upward by approximately 30% .This revision implies a 10% increase in our current 12M fair value estimate from Bt4.00 to Bt4.40 (based on the earnings yield and a required return of 8.5%, reflecting a target PER of 11.7x). So we maintained “Outperform” rating for TFG.TFG reported a 2Q24 net profit of Bt855mn. Excluding extraordinary losses of Bt242mn, core profit amounted to Bt1.1bn, surpassing expectations (vs. the expected core profit of Bt699mn) owing to a higher-than-expected gross profit of Bt200mn.

Thaifoods Group - Upbeat 2Q24 Growth of 3.8x YoY and 11x QoQ

<ul><li>KTX upgrades its rating to Outperform (from Neutral). The valuation metrics suggest that the current share price is below its fundamental value, and the tactical view has improved to neutral from limited upside previously.</li><li>We maintain our view that long- term earnings will turn around this year, with an expected earnings growth achieving a 21% CAGR over the next three years.</li><li>We estimate the 12M FV at Bt4.00, based on the earnings yield and a required rate of return of 8.5%, reflecting a target PER of 11.7x (compared to the FV of Bt3.85 previously, based on a required return of 8.8%).</li></ul>

KTX upgrades its rating to Outperform (from Neutral). The valuation metrics suggest that the current share price is below its fundamental value, and the tactical view has improved to neutral from limited upside previously.We maintain our view that long- term earnings will turn around this year, with an expected earnings growth achieving a 21% CAGR over the next three years.We estimate the 12M FV at Bt4.00, based on the earnings yield and a required rate of return of 8.5%, reflecting a target PER of 11.7x (compared to the FV of Bt3.85 previously, based on a required return of 8.8%).

Thaifoods Group - 2Q24E Core Profit to Grow 205% YoY and 661% QoQ

<ul><li>KTX maintains a Neutral rating, with a fair value of Bt3.85, based on the earnings yield and a required rate of return of 8.8%, reflecting the target PER at 11.3x.</li><li>The valuation metrics suggest a strong view on the long-term outlook, which is expected to turn around and grow at a 21% CAGR in the next three years.</li><li>The view on the valuation in terms of the fundamentals is neutral.</li></ul>

KTX maintains a Neutral rating, with a fair value of Bt3.85, based on the earnings yield and a required rate of return of 8.8%, reflecting the target PER at 11.3x.The valuation metrics suggest a strong view on the long-term outlook, which is expected to turn around and grow at a 21% CAGR in the next three years.The view on the valuation in terms of the fundamentals is neutral.

Thaifoods Group - Expect 2Q24E Earnings Growth; 2024-26E Core Profit Forecasts Revised Update

<ul><li>KTX maintains a Neutral rating, with a fair value of Bt3.85, based on the earnings yield and a required rate of return of 8.8%, reflecting the target PER at 11.3x.</li><li>The valuation metrics suggest a strong view on the long-term outlook, which is expected to turn around and grow at a 21% CAGR in the next three years.</li><li>The view on the valuation in terms of the fundamentals is neutral. Finally, the tactical upside risk is limited, as the stock price has risen, and the 2Q24E earnings are expected to show growth.</li></ul>

KTX maintains a Neutral rating, with a fair value of Bt3.85, based on the earnings yield and a required rate of return of 8.8%, reflecting the target PER at 11.3x.The valuation metrics suggest a strong view on the long-term outlook, which is expected to turn around and grow at a 21% CAGR in the next three years.The view on the valuation in terms of the fundamentals is neutral. Finally, the tactical upside risk is limited, as the stock price has risen, and the 2Q24E earnings are expected to show growth.

Thaifoods Group - Expect 2Q24E Earnings Growth; 2024-26E Core Profit Forecasts Revised Up

Thematic (Sector/Industry)

<ul><li>The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.</li><li>In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.</li><li>Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. </li></ul>

The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. 

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

Thailand

Thaifoods Group Public Company Limited is the manufacturer and processor of poultry and swine products. The Company's business involves hatcheries, contract farming, raw chicken meat processing for export, and domestic distribution. Thaifoods Group operates in Southeast Asia.

Thai Foods Group Public Company Limited (TFG TB)

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Thai Foods Group Public Company Limited (TFG TB)

Thaifoods Group - Upbeat 2Q24 Growth of 3.8x YoY and 11x QoQ

The better-than-expected 2Q24 earnings have led us to revise our 2024E core profit forecast upward by approximately 30% . This revision implies a...

Krungthai XSpring

Thaifoods Group - 2Q24E Core Profit to Grow 205% YoY and 661% QoQ

The valuation metrics suggest that the current share price is below its fundamental value, and the tactical view has improved to neutral from...

Krungthai XSpring

Thaifoods Group - Expect 2Q24E Earnings Growth; 2024-26E Core Profit Forecasts Revised Update

KTX maintains a Neutral rating, with a fair value of Bt3.85, based on the earnings yield and a required rate of return of 8.8%, reflecting the...

Krungthai XSpring

Thaifoods Group - Expect 2Q24E Earnings Growth; 2024-26E Core Profit Forecasts Revised Up

KTX maintains a Neutral rating, with a fair value of Bt3.85, based on the earnings yield and a required rate of return of 8.8%, reflecting the...

Krungthai XSpring

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits

Krungthai XSpring

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