IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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, is seeking to raise US$462 million at an IPO price of THB40 per share. Books open on 10 October.</li>
<li>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>, 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.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/betagro-group" target="_blank" data-smartkarma-citation="entities:36222:1" rel="noopener">Betagro Group (1737144D TB)</a>, Thailand’s leading integrated food company, is seeking to raise US$554 million through a SET IPO, according to press reports</li>
<li>Betagro plans to offer 500 million shares or 25% of the total issued shares after IPO. This will be Thailand's second-largest listing this year after <a href="https://www.smartkarma.com/entities/thai-life-insurance" target="_blank" data-smartkarma-citation="entities:34915:1" rel="noopener">Thai Life Insurance (TLI TB)</a>. </li>
<li>The key elements of the bull case rest on top quartile growth rates, a well-functioning core business, rising profitability, cash generation and declining leverage.</li>
</ul>



Betagro Group (1737144D TB), Thailand’s leading integrated food company, is seeking to raise US$554 million through a SET IPO, according to press reports
Betagro plans to offer 500 million shares or 25% of the total issued shares after IPO. This will be Thailand's second-largest listing this year after Thai Life Insurance (TLI TB). 
The key elements of the bull case rest on top quartile growth rates, a well-functioning core business, rising profitability, cash generation and declining leverage.


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

<ul>
<li>We maintain our BUY rating and raise TP by 42% to Bt8.50derived from 10xPE’23E,the lowest level since listing and 12%discount from average peers. Earnings momentum should remain strong in 2H22</li>
<li>Positive tone from the analyst meeting The management maintain 2022 sales target of Bt45bn (10% below our forecast), and 10%to 15%growth in 2023 backed by high meat prices and volume</li>
<li>The company will expand the number of retail shops up to 220/400 in 2022/2023 (up from 159 in 2Q22) and will contribute sales of B6bn in 2022 (+253%YoY) or 12% </li>
</ul>


We maintain our BUY rating and raise TP by 42% to Bt8.50derived from 10xPE’23E,the lowest level since listing and 12%discount from average peers. Earnings momentum should remain strong in 2H22
Positive tone from the analyst meeting The management maintain 2022 sales target of Bt45bn (10% below our forecast), and 10%to 15%growth in 2023 backed by high meat prices and volume
The company will expand the number of retail shops up to 220/400 in 2022/2023 (up from 159 in 2Q22) and will contribute sales of B6bn in 2022 (+253%YoY) or 12% 


TFG : Strong Earnings to Continue in 2H22

<ul>
<li>Maintain HOLD rating, with TP of Bt5.30 (up 15% from previous TP), based on 22.8PE’22E which is Asia ex-Japan consumer staple. Recent product prices leap in-line with feed cost hike</li>
<li>Expect 4Q21 earnings at B120m (-72%YoY, +126%QoQ), the QoQ surge is due to the absence of Covid-related expense, together with sales growth and margin expansion, backed by food prices rally </li>
<li>Solid 2022 outlook remains intact, since the product prices are expected to maintain at sky-high levels until 1H22, due to supply shortages caused by the widespread of Porcine Reproductive </li>
</ul>


Maintain HOLD rating, with TP of Bt5.30 (up 15% from previous TP), based on 22.8PE’22E which is Asia ex-Japan consumer staple. Recent product prices leap in-line with feed cost hike
Expect 4Q21 earnings at B120m (-72%YoY, +126%QoQ), the QoQ surge is due to the absence of Covid-related expense, together with sales growth and margin expansion, backed by food prices rally 
Solid 2022 outlook remains intact, since the product prices are expected to maintain at sky-high levels until 1H22, due to supply shortages caused by the widespread of Porcine Reproductive 


TFG: Expect Earnings Upturn from 4Q21 Onwards

<ul>
<li>We expect 4Q21 net profit to rebound QoQ, backed by improve demand volume, together with higher product prices, in line with rising feed cost and resuming economic activities.</li>
<li>Earnings should grow QoQ, upon better volume in all business units after lockdown easing, and absence of COVID-19 expenses.</li>
<li>Expect revenue to rise YoY and QoQ, supported by improve demand volume, allowing product prices to outpace feeds costs hike.</li>
</ul>


We expect 4Q21 net profit to rebound QoQ, backed by improve demand volume, together with higher product prices, in line with rising feed cost and resuming economic activities.
Earnings should grow QoQ, upon better volume in all business units after lockdown easing, and absence of COVID-19 expenses.
Expect revenue to rise YoY and QoQ, supported by improve demand volume, allowing product prices to outpace feeds costs hike.


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)

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

Betagro IPO: The Bull Case

The key elements of the bull case rest on top quartile growth rates, a well-functioning core business, rising profitability, cash generation and...

Arun George

TFG : Strong Earnings to Continue in 2H22

We maintain our BUY rating and raise TP by 42% to Bt8.50 derived from 10xPE’23E, the lowest level since listing and 12% discount from average...

Pi Securities PCL, Thailand

TFG: Expect Earnings Upturn from 4Q21 Onwards

Maintain HOLD rating, with TP of Bt5.30 (up 15% from previous TP), based on 22.8PE’22E which is Asia ex-Japan consumer staple. Recent product...

Pi Securities PCL, Thailand

TFG: Expect 4Q21 Earnings to Bottom Out

We expect 4Q21 net profit to rebound QoQ, backed by improve demand volume, together with higher product prices, in line with rising feed cost and...

Pi Securities PCL, Thailand

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