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 upgrade to HOLD (from Sell) with a new TP of Bt16.00, based on 1.50xPBV’23E. The key pillars to our call are (1) an earnings growth recovery in 2023-24 </li>
<li>3Q22 core profit declined YoY and QoQ Excluding extra items,its 3Q22 core profit came in at Bt380m(-5%YoY,-42%QoQ).This put its 9M22 core profit at Bt1.3bn (-28%YoY),accounting for74% of our full-year forecast.</li>
<li>74% of our full-year forecast. The weak QoQ results were attributed to the squeezed margin of 9.7% (2Q22: 13.4%). This was primarily caused by (1) a rise in inventory costs</li>
</ul>


We upgrade to HOLD (from Sell) with a new TP of Bt16.00, based on 1.50xPBV’23E. The key pillars to our call are (1) an earnings growth recovery in 2023-24 
3Q22 core profit declined YoY and QoQ Excluding extra items,its 3Q22 core profit came in at Bt380m(-5%YoY,-42%QoQ).This put its 9M22 core profit at Bt1.3bn (-28%YoY),accounting for74% of our full-year forecast.
74% of our full-year forecast. The weak QoQ results were attributed to the squeezed margin of 9.7% (2Q22: 13.4%). This was primarily caused by (1) a rise in inventory costs


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)

<div><div><div><div><ul><li>We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.</li><li>Our recommended stocks are CBG and SCGP.</li><li><div><div><p>The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.</p></div></div></li></ul></div></div></div></div>

We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.Our recommended stocks are CBG and SCGP.The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

<ul>
<li>We keep our SELL rating with a new TP of Bt14.50(+4% from prior TP),as we rollover to 1.41xPBV’23E, which is -2SD of its 5-yrs trading mean.Strong QoQ growth in  2Q22</li>
<li>2Q22 core profit posted strong QoQ Excluding extra items, its core profit was at Bt622m (-14%YoY, +250%QoQ). The strong QoQ rise was far above our expectation</li>
<li>Neutral tone from the analyst meeting The management reaffirmed its sales volume guidance for asphalt at 1.20m tons in 2022E (-3%YoY), while its 1H22 volume is at 0.56m tons.</li>
</ul>


We keep our SELL rating with a new TP of Bt14.50(+4% from prior TP),as we rollover to 1.41xPBV’23E, which is -2SD of its 5-yrs trading mean.Strong QoQ growth in  2Q22
2Q22 core profit posted strong QoQ Excluding extra items, its core profit was at Bt622m (-14%YoY, +250%QoQ). The strong QoQ rise was far above our expectation
Neutral tone from the analyst meeting The management reaffirmed its sales volume guidance for asphalt at 1.20m tons in 2022E (-3%YoY), while its 1H22 volume is at 0.56m tons.


<ul>
<li>Downgrade to SELL from HOLD rating and cut TP by 41% to Bt14, derived from 1.4xPBV’22E, Asia ex-Japan Materials sector. We believe the valuation remains demanding with the stock trading</li>
<li>Its 4Q21 core profit was at Bt175m (-83%YoY,-71%QoQ), plunged due to narrow margin, following crude price surged and higher OPEX.</li>
<li>Excluding extraordinary items, 2021 core profit was at Bt2.9bn, increased 9%YoY, attributed to better EBIT margin from lower SG&amp;A-to-sales ratio</li>
</ul>


Downgrade to SELL from HOLD rating and cut TP by 41% to Bt14, derived from 1.4xPBV’22E, Asia ex-Japan Materials sector. We believe the valuation remains demanding with the stock trading
Its 4Q21 core profit was at Bt175m (-83%YoY,-71%QoQ), plunged due to narrow margin, following crude price surged and higher OPEX.
Excluding extraordinary items, 2021 core profit was at Bt2.9bn, increased 9%YoY, attributed to better EBIT margin from lower SG&amp;A-to-sales ratio


TASCO: Crude Price Hike to Pressure 2022 Earnings

<ul>
<li>Maintain HOLD rating with a TP of Bt19.80  based on 1.9xPBV’22E, -1SD of its 3-years trailing average. Our rating factors in weak 22E outlook,erode by absence of cheap crude sources</li>
<li>Expect 4Q21 earnings at Bt650m (-18%YoY,+72%QoQ), back by revenue growth, and 271m which is to be report under the extraordinary items</li>
<li>The management affirms that the availability of heavy crude oil should persist until 1Q22. In our view,this would slightly cushion the margins impact from crude price hike,which hovers around $87/BBL </li>
</ul>


Maintain HOLD rating with a TP of Bt19.80  based on 1.9xPBV’22E, -1SD of its 3-years trailing average. Our rating factors in weak 22E outlook,erode by absence of cheap crude sources
Expect 4Q21 earnings at Bt650m (-18%YoY,+72%QoQ), back by revenue growth, and 271m which is to be report under the extraordinary items
The management affirms that the availability of heavy crude oil should persist until 1Q22. In our view,this would slightly cushion the margins impact from crude price hike,which hovers around $87/BBL 


TASCO: 4Q21 Earnings on Track to Bottom-Out

Thailand

Tipco Asphalt Public Company Limited manufactures and distributes asphalt emulsion for use in construction and maintenance of roads. The Company sells its products in both domestic and export markets.

Tipco Asphalt (TASCO TB)

TASCO : Better Outlook in 4Q22

We upgrade to HOLD (from Sell) with a new TP of Bt16.00, based on 1.50xPBV’23E. The key pillars to our call are (1) an earnings growth recovery in...

Pi Securities PCL, Thailand

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth...

Krungthai XSpring

TASCO : Earnings to Slow Down in 2H22

We keep our SELL rating with a new TP of Bt14.50 (+4% from prior TP), as we rollover to 1.41xPBV’23E, which is -2SD of its 5-yrs trading mean....

Pi Securities PCL, Thailand

TASCO: Crude Price Hike to Pressure 2022 Earnings

Downgrade to SELL from HOLD rating and cut TP by 41% to Bt14, derived from 1.4xPBV’22E, Asia ex-Japan Materials sector. We believe the valuation...

Pi Securities PCL, Thailand

TASCO: 4Q21 Earnings on Track to Bottom-Out

Maintain HOLD rating with a TP of Bt19.80 based on 1.9xPBV’22E, -1SD of its 3-years trailing average.Our rating factors in weak 22E outlook, erode...

Pi Securities PCL, Thailand