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 downgrade to HOLD from BUY, with a target price of Bt35.00. While, our neutral rating is merited on the limited upside, we still adore the stock</li>
<li>Positive tone from the analyst meeting Management guided for a positive performance outlook, with a sales growth target of 10% in 2023 (vs our 8% revenue growth). Meanwhile</li>
<li>TOA earmarked a CAPEX of Bt500m and Bt700m in 2022-23E, as part of the ramping-up capacity. </li>
</ul>


We downgrade to HOLD from BUY, with a target price of Bt35.00. While, our neutral rating is merited on the limited upside, we still adore the stock
Positive tone from the analyst meeting Management guided for a positive performance outlook, with a sales growth target of 10% in 2023 (vs our 8% revenue growth). Meanwhile
TOA earmarked a CAPEX of Bt500m and Bt700m in 2022-23E, as part of the ramping-up capacity. 


TOA : Promising 4Q22 Outlook but Limited Upside

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

<ul>
<li>We highlight 14 stocks in Thailand that look interesting to us based on our FVMR Methodology</li>
<li>Portfolio changes: Nine stocks remain, and five new join the fray</li>
<li>Since inception, it has gained 105% versus the SET 100 Index’s return of 38%</li>
</ul>


We highlight 14 stocks in Thailand that look interesting to us based on our FVMR Methodology
Portfolio changes: Nine stocks remain, and five new join the fray
Since inception, it has gained 105% versus the SET 100 Index’s return of 38%


The Stocks to Own in Thailand – Vol. 39

<ul>
<li>Maintain BUY recommendation for TOA and roll over target price to 1H23 at Bt35 (Previous TP of Bt32). Excluding extraordinary items, core profit was at Bt473m (-13%YoY, +6%QoQ)</li>
<li>2Q22 earnings recover QoQ as expected    TOA’s 2Q22 net profit came in at Bt368m (-32%YoY, -10%QoQ). 1H22 result accounted for 48% of our 2022E.</li>
<li>2Q22 revenue hit a record high at Bt5.2bn (+16%YoY, +5%QoQ). Most of all decorative sales growth was supported by 1) an increase in average products selling price</li>
</ul>


Maintain BUY recommendation for TOA and roll over target price to 1H23 at Bt35 (Previous TP of Bt32). Excluding extraordinary items, core profit was at Bt473m (-13%YoY, +6%QoQ)
2Q22 earnings recover QoQ as expected    TOA’s 2Q22 net profit came in at Bt368m (-32%YoY, -10%QoQ). 1H22 result accounted for 48% of our 2022E.
2Q22 revenue hit a record high at Bt5.2bn (+16%YoY, +5%QoQ). Most of all decorative sales growth was supported by 1) an increase in average products selling price


TOA : Rising Raw Material Cost Already in the Price

<ul>
<li>Yesterday analyst meeting came out with a negative tone.We expect TOA net profit in 1H22to weaken YoY due to an increase in raw material cost in spite of upward selling </li>
<li>We expect earnings drop both QoQ and YoY in 1Q22 caused by squeezed GPM from rising raw material cost. In contrast,revenue will be expanded YoY supported by demand for painting </li>
<li>We revised down 2022-23 earnings by 3-7% in 2022-23E to factor in further decrease in gross profit margin caused by a rise in material cost following spike in oil price.</li>
</ul>


Yesterday analyst meeting came out with a negative tone.We expect TOA net profit in 1H22to weaken YoY due to an increase in raw material cost in spite of upward selling 
We expect earnings drop both QoQ and YoY in 1Q22 caused by squeezed GPM from rising raw material cost. In contrast,revenue will be expanded YoY supported by demand for painting 
We revised down 2022-23 earnings by 3-7% in 2022-23E to factor in further decrease in gross profit margin caused by a rise in material cost following spike in oil price.


TOA: Squeeze Margin Pressured 1H22 Earnings

<ul>
<li>We believe a high raw material cost will not be sustain given U.S. Energy Information Administration (EIA) forecasts crude oil prices to decline in 2022.We reiterate BUY rating for TOA</li>
<li>We expect TOA to report 4Q21 net profit at Bt365m (-26%YoY, +36%QoQ),</li>
<li>We forecast 2022E earnings to hit Bt2bn (+13%YoY) supported by 1) demand for painting and construction materials from hotel, restaurants, and other related tourism destinations (re-painting demand)</li>
</ul>


We believe a high raw material cost will not be sustain given U.S. Energy Information Administration (EIA) forecasts crude oil prices to decline in 2022.We reiterate BUY rating for TOA
We expect TOA to report 4Q21 net profit at Bt365m (-26%YoY, +36%QoQ),
We forecast 2022E earnings to hit Bt2bn (+13%YoY) supported by 1) demand for painting and construction materials from hotel, restaurants, and other related tourism destinations (re-painting demand)


TOA: Expect Earnings to Recover Slowly in 2022

Thailand

TOA Paint (Thailand) Public Company Limited manufactures paint products. The Company offers wood, protective, and marine coatings, as well as decorative and heavy paints, chemical construction, aerosol spray, and abrasive products. TOA Paint serves household and industrial market in southeast Asia.

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TOA Paint (Thailand) (TOA TB)

TOA : Promising 4Q22 Outlook but Limited Upside

We downgrade to HOLD from BUY, with a target price of Bt35.00. While, our neutral rating is merited on the limited upside, we still adore the stock...

Pi Securities PCL, Thailand

The Stocks to Own in Thailand – Vol. 39

We highlight 14 stocks in Thailand that look interesting to us based on our FVMR Methodology. Portfolio changes: Nine stocks remain, five new join...

A. Stotz Investment Research

TOA : Rising Raw Material Cost Already in the Price

Maintain BUY recommendation for TOA and roll over target price to 1H23 at Bt35 (Previous TP of Bt32). Excluding extraordinary items, core profit...

Pi Securities PCL, Thailand

TOA: Squeeze Margin Pressured 1H22 Earnings

Yesterday analyst meeting came out with a negative tone. We expect TOA net profit in 1H22 to weaken YoY due to an increase in raw material cost in...

Pi Securities PCL, Thailand

TOA: Expect Earnings to Recover Slowly in 2022

We believe a high raw material cost will not be sustain given U.S. Energy Information Administration (EIA) forecasts crude oil prices to decline in...

Pi Securities PCL, Thailand

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