Yesterday analyst meeting came out with a neutral tone. We maintain HOLD rating with a target price of Bt15, which is derived from 33xPE’21E, a 40% premium to Thai Consumer Discretionary.
SSSG turned positively at double digit and low single digit growth during May-June and July 2020 respectively, driven by demand recovery.
HMPRO maintains its stores expansion plan at two stores (+1.7%YoY to 115 stores) in 4Q20.
Expect earnings to recover HoH in 2H20 driven by continuing demand recovery and better product mix. However, we believe improving earnings momentum already priced in. Any correction in share price will be an opportunity to accumulate to realize strong earnings recovery in 2021.
We still like HMPRO for its 1) higher profitability compared to peers; 2) SSSG in recovering phase; 3) continuing stores expansion; and 4) long-term growth driver from Omni-channel sales.