Daily BriefsThailand

Thailand: Carabao Group, Hana Microelectronics, Krung Thai Bank Pub, Ratch Group PCL and more

In today’s briefing:

  • CBG: Time to Reload
  • HANA: Robust EV Demand Will Offset Global Smartphone Decline
  • Thai Banks Screener; Krung Thai and Kasikorn Are Our Top Picks
  • RATCH: New Capacity Addition Would Offset EPS Dilution

CBG: Time to Reload

By Pi Research

  • Last week analyst meeting came out with a positive tone regarding2022-25 earnings outlook.We reiterate our BUY rating for CBG and roll over target price to Bt125 (Previous TP is Bt115)
  • We expect GPM to bottomed out in 1Q22 caused by 1) higher revenue contribution from branded own segment (higher than average blended GPM), 2) wholesale price adjustment by 1%-3%
  • We expect CBG to show a strong performance in 2022-25 supported by recovery sales in Cambodia, solid revenue in Myanmar, breaking into the Chinese market successfully, growth opportunities in Vietnam

HANA: Robust EV Demand Will Offset Global Smartphone Decline

By Pi Research

  • Analyst meeting came out with negative tone. We maintain BUY rating at Bt57.50, based on 21.3xPE’22 (+1SD of 10-yr trading average). Our TP and 22E downwards earnings revisal by 6% 
  • 2Q22 should be lowest of the year due to declining sales from decrease by 25% in output in Chinese factories.Recommend accumulating shares,due to attractive valuations, prior to 2H22 earnings recovery.
  • 2H22 earnings will recover from GPM expansion from revenue contribution from new SiC segment (consistently gross loss until now)and better product mix in IC Thai factory.Sales should also grow moderately 

Thai Banks Screener; Krung Thai and Kasikorn Are Our Top Picks

By Victor Galliano

  • The six value oriented Thai banks all have healthy credit quality, NPL coverage and sound capital adequacy ratios; in addition, encouraging cost of risk trends support the earnings outlook
  • Of these, we believe Krung Thai Bank screens well, with its attractive pre-provision and post-provision profitability versus peers, whilst trading on relatively undemanding multiples; we also like Kasikorn Bank
  • We see TMBThanchart as an early stage “turn around” stock, especially if management can improve credit quality, and push down its cost of risk sustainably to lower levels

RATCH: New Capacity Addition Would Offset EPS Dilution

By Pi Research

  • Last week analyst meeting came out in a positive tone. We maintain the BUY call based on target price of Bt48.0 derived using SOTP methodology, implying 9.0xPE’22E.
  • The 2Q22 earnings is expected to improve QoQ from1 higher share of profit from HPC, 2)equity income from new 145MWe  gas PP COD in 1Q22.While full quarter profit from 476M 
  • We see the 2022-25 outlook promising,considering 1)Steady earnings growth supported by 28% PP operating capacity expansion and 2)rising RE proportion which will rule out the ESG concerns and support rerating

Before it’s here, it’s on Smartkarma