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

Thai Foods Group Public Company Limited / Equity Bottom-Up

<ul>
<li>We keep our BUY rating with a target price of Bt8.50. Key growth catalysts include (1) a decent earnings prospect with stabilizing material costs;(2) cheap valuation;(3) a high dividend yield</li>
<li>Key takeaways from the analyst meeting Management aimed chicken and swine volume expansion growth of20%/60%YoY in 2023-24.The company also highlighted its full-year volume targets.Chicken volume were guided at 375k tons(+27%YoY)</li>
<li>Management retained its aggressive expansion strategy for retail shops. The number of retail shops (16% of 2Q22 sales, anchored with ~20% gross margin) will increase to 400 stores in 2023</li>
</ul>


We keep our BUY rating with a target price of Bt8.50. Key growth catalysts include (1) a decent earnings prospect with stabilizing material costs;(2) cheap valuation;(3) a high dividend yield
Key takeaways from the analyst meeting Management aimed chicken and swine volume expansion growth of20%/60%YoY in 2023-24.The company also highlighted its full-year volume targets.Chicken volume were guided at 375k tons(+27%YoY)
Management retained its aggressive expansion strategy for retail shops. The number of retail shops (16% of 2Q22 sales, anchored with ~20% gross margin) will increase to 400 stores in 2023


TFG : 4Q22 Earnings to Post Strong YoY but Soften QoQ

<ul>
<li>We keep our BUY rating with a target price of Bt8.50. We are upbeat on the 4Q22 earnings trend, with our BUY call reflecting: (1) healthy growth prospect</li>
<li>Record high earnings for second straight quarter TFG reported another record high in 3Q22 earnings of Bt1.7bn,continued on the positive territory after a dip in a net loss of Bt456 </li>
<li>The 3Q22 earnings performance was 18% above ours and Bloomberg consensus. Behind the stronger-than-expected earnings was due to historic high revenue, as well as operating margin.</li>
</ul>


We keep our BUY rating with a target price of Bt8.50. We are upbeat on the 4Q22 earnings trend, with our BUY call reflecting: (1) healthy growth prospect
Record high earnings for second straight quarter TFG reported another record high in 3Q22 earnings of Bt1.7bn,continued on the positive territory after a dip in a net loss of Bt456 
The 3Q22 earnings performance was 18% above ours and Bloomberg consensus. Behind the stronger-than-expected earnings was due to historic high revenue, as well as operating margin.


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.

Thematic (Sector/Industry)

<ul><li>We are optimistic about the potential recoveries of global equity markets late this year, based on the expectation that the Fed will pause its interest rate hikes and that a bull flattening of the yield curve will occur when inflation slows down.</li><li>While US inflation may remain above the Fed’s target of 2%, this is likely to be due to a time-lag effect linked to housing prices and concerns over the risk of a US economic recession.</li><li>Therefore, we have revised down our US 10Y bond yield assumption to 3.3% (vs. 3.5% previously) and our Thai 10Y bond yield estimate to 3.0% (vs. 3.3%) for 4Q22E, based on a 12M forward EPS assumption for the SET at Bt106.27/share and an expected earnings yield of 6.2%.</li></ul>

We are optimistic about the potential recoveries of global equity markets late this year, based on the expectation that the Fed will pause its interest rate hikes and that a bull flattening of the yield curve will occur when inflation slows down.While US inflation may remain above the Fed’s target of 2%, this is likely to be due to a time-lag effect linked to housing prices and concerns over the risk of a US economic recession.Therefore, we have revised down our US 10Y bond yield assumption to 3.3% (vs. 3.5% previously) and our Thai 10Y bond yield estimate to 3.0% (vs. 3.3%) for 4Q22E, based on a 12M forward EPS assumption for the SET at Bt106.27/share and an expected earnings yield of 6.2%.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/betagro-group" target="_blank" data-smartkarma-citation="entities:36222:1" rel="noopener">Betagro (BTG TB)</a>, Thailand’s leading integrated food company, will open its books for its THB17.4 billion (US$462 million) from 10 to 25 October.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/betagro-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:81570" rel="noopener">Betagro IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/betagro-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:81612" rel="noopener">Betagro IPO: The Bear Case</a>. </li>
<li>Our valuation analysis suggests that Betagro is fully priced at the IPO price. Give the IPO a pass, awaiting a lower entry point.</li>
</ul>



Betagro (BTG TB), Thailand’s leading integrated food company, will open its books for its THB17.4 billion (US$462 million) from 10 to 25 October.
We previously discussed the IPO in Betagro IPO: The Bull Case and Betagro IPO: The Bear Case. 
Our valuation analysis suggests that Betagro is fully priced at the IPO price. Give the IPO a pass, awaiting a lower entry point.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/betagro-group" target="_blank" data-smartkarma-citation="entities:36222:1" rel="noopener">Betagro (BTG TB)</a>, Thailand’s leading integrated food company, is seeking to raise US$462 million at an IPO price of THB40 per share. Books open on 10 October.</li>
<li>In <a href="https://www.smartkarma.com/insights/betagro-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:81570" rel="noopener">Betagro IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.  </li>
<li>The key elements of the bear case rest on weak sector market sentiment, second largest business under pressure, elevated raw material prices and mid-tier EBITDA margin and ROE.</li>
</ul>



Betagro (BTG TB), Thailand’s leading integrated food company, is seeking to raise US$462 million at an IPO price of THB40 per share. Books open on 10 October.
In Betagro IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.  
The key elements of the bear case rest on weak sector market sentiment, second largest business under pressure, elevated raw material prices and mid-tier EBITDA margin and ROE.


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)

TFG : 4Q22 Earnings to Post Strong YoY but Soften QoQ

We keep our BUY rating with a target price of Bt8.50. Key growth catalysts include (1) a decent earnings prospect with stabilizing material costs;...

Pi Securities PCL, Thailand

TFG : Earnings Hit Another Record High

We keep our BUY rating with a target price of Bt8.50. We are upbeat on the 4Q22 earnings trend, with our BUY call reflecting:(1)healthy growth...

Pi Securities PCL, Thailand

4Q22E Market Outlook: SET Haven

We are optimistic about the potential recoveries of global equity markets late this year, based on the expectation that the Fed will pause its...

Krungthai XSpring

Betagro IPO: Valuation Insights

Betagro is a well-run company. However, it is fully priced at the IPO price of THB40 per share. Give the IPO a pass, awaiting a lower entry point.

Arun George

Betagro IPO: The Bear Case

The key elements of the bear case rest on weak sector market sentiment, second largest business under pressure, elevated raw material prices and...

Arun George

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