Category

Thailand

Thailand: Berli Jucker and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Berli Jucker (BJC TB) – Canned Recovery in Motion

Berli Jucker (BJC TB) – Canned Recovery in Motion

By Angus Mackintosh

  • Berli Jucker (BJC TB) was hit by COVID lockdowns in 3Q2021 but the recovery has already started for its retail and packaging businesses, especially in Vietnam for the latter.
  • The company’s expansion plans for Mini Big C continue apace, as well conversions to Food Place and its store renovation program, which points toward a strong growth recovery in 2022.
  • The competitive intensity in Thai retail is reducing, with CP Group’s acquisition of Tesco Thailand reducing major players to two, whilst there is a further restructuring under Siam Makro Public.

Before it’s here, it’s on Smartkarma

Thailand: Electricity Generating, Tipco Asphalt, TOA Paint (Thailand) and more

By | Daily Briefs, Thailand

In today’s briefing:

  • EGCO: Targets 15% Growth from New M&A’s in 2022
  • TASCO: 4Q21 Earnings on Solid Recovery Path
  • TOA: Recovering Demand for Decorative Paint Drive 4Q21 Earnings

EGCO: Targets 15% Growth from New M&A’s in 2022

By Research Group at Country Group Securities

  • Yesterday analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt220.0 derived using DCF methodology (WACC 9.8% and TG 1%)
  • Expect the 4Q21 recurring profit to improve YoY on the back of profit recognition from Linden gas power plant (USA) added in 2Q21. While soften QoQ due to seasonal 
  • The company has set an investment budget of Bt30bn for 2022 (with in the framework of Bt150bn for 2021-25), which will focus on new renewable energy project acquisitions.We expect EGCO

TASCO: 4Q21 Earnings on Solid Recovery Path

By Research Group at Country Group Securities

  • Analyst meeting came out with a neutral tone. We expect 4Q21 net profit to recover QoQ, supported by higher demand volume and asphalt price,driven by budget disbursement and soared crude
  • Expect earnings to blossom QoQ, but soften YoY due to absence of cheap alternative crude sources, combined with lower sales volume.
  • Meanwhile, management affirmed current inventory of heavy crude oil from other sources is suffice for producing asphalt until 1Q22.

TOA: Recovering Demand for Decorative Paint Drive 4Q21 Earnings

By Research Group at Country Group Securities

  • Analyst meeting came out with a neutral tone. We expect 4Q21 earnings to recover QoQ but flat YoY caused by rising cost.
  • We expect 4Q21 earnings to improve QoQ supported by 1) an increase in products selling prices by 4%-5% in 3Q21,2) a solid demand for decorative paint both Thailand and Vietnam
  • We expect 3Q21 GPM should be bottom quarter supported by 1) an increase in products selling prices and 2) a decrease in raw material price (more than 50% of COGS 

Before it’s here, it’s on Smartkarma

Thailand: Total Access Communication, Energy Absolute, CK Power PCL and more

By | Daily Briefs, Thailand

In today’s briefing:

  • DTAC/TRUE Merger: Details and Index Implications
  • True/DTAC Merger. Optional VTOs
  • DTAC: Merger with TRUE Will Expand Its Value
  • EA: The EV-ESS Chain All Set to Outperform
  • CKP: Cheap Valuation but Lacks near Term Growth Catalyst

DTAC/TRUE Merger: Details and Index Implications

By Brian Freitas


True/DTAC Merger. Optional VTOs

By David Blennerhassett

  • Thai telcos True Corp Pcl (TRUE TB) and Total Access Communication (DTAC TB) have agreed to an amalgamation.
  • Telenor Asia, DTAC’s parent, and Charoen Pokphand Holding, the parent firm of True, will make conditional voluntary tender offers for all shares in DTAC and True respectively.
  • A key condition to the merger is approval from the telco regulator, the National Broadcasting and Telecommunications Commission.

DTAC: Merger with TRUE Will Expand Its Value

By Research Group at Country Group Securities

  • DTAC and TRUE notified the SET of a potential merger and will create a non-binding memorandum of understanding. The deal will involve a share-swap model, where DTAC shareholders can either 
  • We believe accepting the tender offer is the best course of action for short-term oriented shareholders, due to the time-consuming nature of the deal and the potential lingering cost structure 
  • Deal of merger must still undergo approval from board of directors and shareholders of both companies and key regulatory agencies.

EA: The EV-ESS Chain All Set to Outperform

By Research Group at Country Group Securities

  • Yesterday analyst meeting come out in a positive tone. EA kick started the EV business in 3Q21 and booked sales of 77 E-buses. We see the growing EV sales,and commencement
  • We expect the growing E-bus sales to underpin the recurring profit growth in 4Q21. With approximately Bt400m bottom line contribution from the EV segment (from 300 to 400-unit sales),the 4Q21 
  • Positive 2021-25E outlook as we expect a 15% CAGR net profit growth on the back of incrementing contribution from new EV-ESS businesses (commencing on 2H21),viz., EV car/bus/truck sales and ESS

CKP: Cheap Valuation but Lacks near Term Growth Catalyst

By Research Group at Country Group Securities

  • Yesterday analyst meeting came out in a neutral tone. We maintain our BUY recommendation based on a target price of Bt6.40, derived using DCF methodology (7.6% WACC and 1% TG)
  • Expect 4Q21 earnings to drop QoQ due to lower electricity sales from hydro projects in Lao PDR (NN2, XPCL), from seasonally weak water inflow. While improve YoY as the company 
  • The company has 2.1GW power plant installed capacity in portfolio (1.0GWe), and target to expand it by 2x to 5.GW by 2025. we expect CKP will capture near term growth 

Before it’s here, it’s on Smartkarma

Thailand: Bangchak Corporation, Carabao Group, PTT Global Chemical and more

By | Daily Briefs, Thailand

In today’s briefing:

  • BCP: Bright Refinery Outlook 4Q21 Onwards
  • CBG: Medium to Long-Term Outlook Remain Solid
  • PTTGC: Better Refinery & Olefins Segment Performance in 4Q21

BCP: Bright Refinery Outlook 4Q21 Onwards

By Research Group at Country Group Securities

  • Analyst meeting came out in a positive tone. We maintain the BUY recommendation with a target price of Bt35.0, derived using SOTP method, implying 1.1x PBV’22E. Our valuation reflects positive 
  • Expect 4Q21 recurring profit to improve both YoY and QoQ on the back of solid refinery operations.
  • We see bright refinery outlook 4Q21 onwards driven by rising GRM (better gasoline, jet and diesel spreads) and higher refinery run rate. While earnings from power,marketing and bio-based business segments

CBG: Medium to Long-Term Outlook Remain Solid

By Research Group at Country Group Securities

  • We reiterate a BUY rating for CBG but trim down target price after EPS downward revision to Bt131(-18% from previous TP) based on 35xPE’22E, the average of the Thailand energy
  • We foresee 4Q21 earnings to drop YoY but improve QoQ supported by (1) recovering sales in Thailand and CLMV market, (2) Solid liquor’s distribution revenue growth
  • Revised down 2021-22 earnings by 6%-17% to factor in an increase in raw material cost(aluminum coil).

PTTGC: Better Refinery & Olefins Segment Performance in 4Q21

By Research Group at Country Group Securities

  • Analyst meeting last week came out with a neutral tone. We see bright refinery segment outlook 4Q21 onwards backed by rising gasoline, jet and diesel spreads. Olefins,performance materials segment contribution
  • We expect the 4Q21 core profit to improve QoQ supported by 1) solid olefins and performance materials  spread as new supply additions delayed to 1H22. 2) rising GRM
  • The olefins and performance materials contribution should improve QoQ supported by lower supply from China. While it will be partially pressured by feedstock cost push.

Before it’s here, it’s on Smartkarma

Thailand: Siam Makro Public, RS PCL, Dohome PCL, Sappe Pcl, Erawan Group, Star Petroleum Refining and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Siam Makro (MAKRO TB): Placement, Primary Offering & Index Implications
  • RS: New Utility Token to Support Organic Earnings Growth in 2022
  • DOHOME: Solid SSSG Should Be Key Driver
  • SAPPE: Strategic Partner Will Unlock Growth Opportunities in 2022
  • ERW: The Seventh Consecutive Quarter Loss in 3Q21
  • SPRC: Positive 4Q21-2022 Outlook from Rising GRM

Siam Makro (MAKRO TB): Placement, Primary Offering & Index Implications

By Brian Freitas

  • Siam Makro Public (MAKRO TB) has bought the Lotus business from CPALL, CPM and CPH for THB 217.95bn by offering 5.01bn shares at THB 43.5/share.
  • CPALL, CPM and CPH will now sell 1.248bn shares to the public, while Siam Makro Public (MAKRO TB) will sell another 1.362bn new shares. This will increase the free float.
  • The higher free float will see buying by FTSE trackers in the short term, while the stock could be included in the MSCI Thailand and SET50 indices in May/June 2022.

RS: New Utility Token to Support Organic Earnings Growth in 2022

By Research Group at Country Group Securities

  • We are positive toward the company new strategy on launching new marketing tool via utility token called ‘Popcoin’ as it will help improve accuracy for targeting potential audiences together 
  • Report Bt0.3m loss in 3Q21, 20-quarter low. Disappointed earnings pressured by revenue that hit five-quarter low while selling expenses remain high.
  • Expect earnings in 4Q21 to recover QoQ on the back of recovery in Ads spending from corporate sector after lockdown and improving MPC sales. YoY growth

DOHOME: Solid SSSG Should Be Key Driver

By Research Group at Country Group Securities

  • Yesterday analyst meeting came out with a positive tone. DOHOME’s SSSG was at roughly +40%YoY in QTD. Steel products margin stable at roughly 17%-18% in 4Q21 close to 3Q21. 
  • We expect DOHOME earnings to increase QoQ and YoY in 4Q21 supported by solid SSSG from solid construction materials demand, 2) demand from home renovation after a flood
  • We still like DOHOME for its 1) its store locations that aim to tap high spending customers, 2) store network expansion plan with +22%CAGR in the next three years

SAPPE: Strategic Partner Will Unlock Growth Opportunities in 2022

By Research Group at Country Group Securities

  • Yesterday analyst meeting came out with a positive tone, both from new products launch plan and new strategic partner for entering Data Driven Platform in the future.
  • New products launch will be a key growth driver in 2022.
  • SAPPE reported 3Q21 net profit of Bt142m (+7%YoY, +12%QoQ), driven by export seasons for international markets.

ERW: The Seventh Consecutive Quarter Loss in 3Q21

By Research Group at Country Group Securities

  • ERW reported 3Q21 net loss of Bt623m, the seventh consecutive quarter loss due to operation under EBIT breakeven.
  • Partial lockdown measures caused a reduction in inter-provincial travel and resulted in an unprofitable occupancy rate.
  • The company recorded negative EBITDA of Bt243m, which was the sixth-consecutive quarter of negative EBITDA.

SPRC: Positive 4Q21-2022 Outlook from Rising GRM

By Research Group at Country Group Securities

  • Analyst meeting came out with a positive tone. We expect refinery margin to continue improving in 4Q21 led by solid gasoline, diesel and jet fuel spreads. 
  • We expect the market GRM improve to US$5.0/BBL level in 4Q21 (+114% QoQ) and maintain at high levels in 2022 backed by strong product spreads due to global economic recovery
  • •The refinery utilization rate should also improve QoQ in 4Q21, after easing of domestic lockdown measures (3rd wave of COVID).

Before it’s here, it’s on Smartkarma

Thailand: Osotspa Public Company Limited, Central Plaza Hotel, PTG Energy PCL and more

By | Daily Briefs, Thailand

In today’s briefing:

  • OSP: OSP Is Aiming to Launch Cannabis Related Products in 1H22
  • CENTEL: The Seventh Consecutive Quarter Loss in 3Q21
  • PTG: Earnings Touch Bottom in 3Q21 as Lockdown Hit

OSP: OSP Is Aiming to Launch Cannabis Related Products in 1H22

By Research Group at Country Group Securities

  • Yesterday analyst meeting came out with a neutral tone. 4Q21 earnings should recover from its bottom in 3Q21 but will continue to be pressured by rising energy costs.
  • We expect 4Q21 earnings to improve QoQ driven by growing beverage sales in Thailand and solid sales from oversea sales except Myanmar, but soften YoY pressured 
  • Gross margin should improve by 1Q22 on cost-saving of cans materials.

CENTEL: The Seventh Consecutive Quarter Loss in 3Q21

By Research Group at Country Group Securities

  • CENTEL reported 3Q21 net loss at Bt803m compared to net loss of Bt897m in 3Q20 and net loss of Bt606m in 2Q21.
  • 3Q21 EBITDA was at Bt240m (+641%YoY, -21%QoQ) mainly eroded by extended lockdown and curfew measures in Thailand.
  • Trimmed 2021-23E forecast to factor in slower-than-expected recovery of tourists.

PTG: Earnings Touch Bottom in 3Q21 as Lockdown Hit

By Research Group at Country Group Securities

  • PTG reported 3Q21 net profit of Bt63m (-88%YoY, -87%QoQ), falling to a 3-year low. The result came out much lower than our expectation and 9M21 net profit accounted 
  • A weak performance YoY and QoQ was a result of decline in oil sales volume and marketing margin..
  • Oil sales volume was 1,106 million Liter (-10%YoY, -14%QoQ), dropped YoY following impact of COVID led lockdown measures along with flood situation

Before it’s here, it’s on Smartkarma

Thailand: Siam Makro Public and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Siam Makro Placement – First Look – Created a Food and Grocery Behemoth

Siam Makro Placement – First Look – Created a Food and Grocery Behemoth

By Zhen Zhou, Toh

  • Siam Makro Public (MAKRO TB) is looking to raise up to US$3.9bn (including over-allotment shares) in its upcoming Thailand placement. 
  • Siam Makro and Lotus’s target different market segments. It transformed Siam Makro into a COVID recovery play since Lotus’s, being B2C, suffered more during the lockdown in July/August.
  • We will look at the acquisition of Lotus’s prior to the placement, the impact of the placement, and share our thoughts on deal dynamics.

Before it’s here, it’s on Smartkarma

Thailand: THB, VGI PCL and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Alpha Bites: Long Thai Baht (THB) Vs Short Singapore Dollar (SGD)
  • VGI: Expect Solid Earnings Recovery from Late 2021 Onward

Alpha Bites: Long Thai Baht (THB) Vs Short Singapore Dollar (SGD)

By Gautam Jain, PhD, CFA

In this week’s Alpha Bites, we recommend buying the Thai baht (THB) against the Singapore dollar (SGD) in a beta-neutral ratio. After lagging for much of the year, THB has finally started catching up with its EM peers as coronavirus cases have peaked and vaccinations have picked up, allowing for tourism to return. In the case of Singapore, the MAS started tightening monetary policy at the last semiannual review, but growth is not strong enough to justify significant further tightening yet. Besides, SGD appreciated immediately after the MAS announcement, reflecting the move.


VGI: Expect Solid Earnings Recovery from Late 2021 Onward

By Research Group at Country Group Securities

We maintain BUY rating for VGI with the new target price of Bt8.10 (Previous TP: Bt6.90), derived from SOTP method or 50% premium to Thai media peers.  Target price upgrade was due to incorporation of 15% stake in JMART and consolidation of Fanslink (51% stake), the IT and gadget products online seller. We also roll over valuation for core businesses on media and digital services to FY2023.

• We expect the company to report 2QFY22 (July’21-Sept’21) net loss at Bt47m, (vs. Bt10m profit in 1QFY22 and Bt12m profit in 2QFY21). Disappointed earnings will be pressured by a fall in media revenue to Bt336m. (-30%YoY -11%QoQ) as corporate reduces advertising budget especially in mass transit media, which resulted from a drop in traffic amid the 3rd wave of coronavirus widespread.
• Recovery period will be kicked off from late 2021 onward.
• Revise up earnings forecast in FY2022 and FY2023 by 49% and 24% as we incorporate equity income from JMART (15% stake) and revenue from selling IT and gadget products from Fanslink, which estimated to contribute roughly a third of VGI’s total revenue.

Before it’s here, it’s on Smartkarma

Thailand: THB and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Is the Period of Underperformance for Asian Currencies Over?

Is the Period of Underperformance for Asian Currencies Over?

By Gautam Jain, PhD, CFA

Between July and October, Asian currencies underperformed against the rest of EM. In this note, I address the question: Is the period of underperformance for Asian currencies now behind? With the economic recovery back on track as coronavirus cases drop amid high levels of vaccinations, further monetary easing no longer in the cards, and FX interventions slowing, I expect Asian currencies on aggregate to trade broadly in line with the rest of EM in the near term but not outperform. From a strategy standpoint, I would opportunistically target specific currencies that have underperformed, such as the Thai baht.

Separately, the attached file is a snapshot of the EM currency market in which I seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.


Before it’s here, it’s on Smartkarma

Thailand: Thai Life Insurance and more

By | Daily Briefs, Thailand

In today’s briefing:

  • Thai Life Insurance Pre-IPO Tearsheet

Thai Life Insurance Pre-IPO Tearsheet

By Clarence Chu

Thai Life Insurance (124744Z TB) is looking to raise up to US$1bn in its upcoming Thailand IPO. The deal will be run by Bank of America, Kiatnakin Phatra, Nomura, CIMB, and Citigroup.

Thai Life Insurance is a life insurance firm. Its portfolio consists of products such as life protection, savings, investment and inheritance planning and is considered to be one of the largest life insurance companies in Thailand, third by assets. As of Jun 2021, the firm employed 66,000 insurance agents in the area covering all 77 provinces nationwide.


Before it’s here, it’s on Smartkarma