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

<div><div><div><ul><li>KTX switched our rating to Neutral. Our valuation metrics suggest that the share price is fully valued, but the long-term view on growth is positive.</li><li>The new fair value is Bt4.02, based on the earnings yield and a required return of 7.1%. The tactical view shows limited downside risk after the share price fall of 25% YTD.</li><li>However, the 3Q23E earnings may be lower than expected if swine prices fall further, posing downside risk to the share price. </li></ul></div></div></div>

KTX switched our rating to Neutral. Our valuation metrics suggest that the share price is fully valued, but the long-term view on growth is positive.The new fair value is Bt4.02, based on the earnings yield and a required return of 7.1%. The tactical view shows limited downside risk after the share price fall of 25% YTD.However, the 3Q23E earnings may be lower than expected if swine prices fall further, posing downside risk to the share price. 

COMPANY UPDATE - Thaifoods Group - July 27, 2023

<div><div><div><ul><li>KTX has revised up our rating to Buy (fair value of Bt5.55, based on the earnings yield and a required rate of return of 9.0%).</li><li>The valuation metrics suggest that the tactical downside risk is limited after the share price drop of over 20% since before Songkran, and we have a positive view on the fundamentals in both the short and long term; we expect earnings growth of 15% YoY in 2024E due to the recovery in the gross profit margin and the expansion of the retail business.</li><li>TFG should also see the lowest operating expenses to sales amongst peers at around 6.2%, making the profit margin immune to pressure from meat price fluctuations.</li></ul></div></div></div>

KTX has revised up our rating to Buy (fair value of Bt5.55, based on the earnings yield and a required rate of return of 9.0%).The valuation metrics suggest that the tactical downside risk is limited after the share price drop of over 20% since before Songkran, and we have a positive view on the fundamentals in both the short and long term; we expect earnings growth of 15% YoY in 2024E due to the recovery in the gross profit margin and the expansion of the retail business.TFG should also see the lowest operating expenses to sales amongst peers at around 6.2%, making the profit margin immune to pressure from meat price fluctuations.

Thaifoods Group (TFG TB) - 2024E Earnings to Grow by 15%; Expecting a HoH Recovery in 2H23E

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 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.


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 <em><strong><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></strong></em> and <em><strong><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></strong></em>. </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.


Thailand

Thaifoods Group is a vertically integrated food producer specializing in the production of chicken and swine, operating in Thailand and Vietnam. The company's core activities include chicken breeding, meat production, processed chicken products, pig breeding, and live pig sales. It also operates feed mills and a retail business. Thaifoods Group was founded in 1987 and is headquartered in Bangkok, Thailand.

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Thaifoods Group (TFG TB)

COMPANY UPDATE - Thaifoods Group - July 27, 2023

KTX switched our rating to Neutral. Our valuation metrics suggest that the share price is fully valued, but the long-term view on growth is positive.

Krungthai XSpring