Domestic Sales Recovery QoQ but Oversea Still Weak

ILM: King of Home Furnishing Retailers in Thailand

HMPRO: The Best Home-Improvement Retailer in Thailand

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Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

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Equity Bottom-Up

Yesterday analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt15.6, which is derived from 33xPE’21E, a 40% premium to Thai Consumer Discretionary.Key takeaway:<ul>
<li>SSSG remains negative at single digit in October 2020. However, we expect SSSG to improve to -1.5% in 4Q20 from -3.7% and -17% in 3Q20 and 2Q20, respectively.</li>
<li>We expect 4Q20 performance to improve QoQ driven by 1) Government stimulus scheme (Shop Dee Mee Kuen) 2) HomePro Expo during 13-22 November 2020 and 3) Margin expansion from better cost control and higher product mix from China.</li>
</ul>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.

Yesterday analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt15.6, which is derived from 33xPE’21E, a 40% premium to Thai Consumer Discretionary.Key takeaway:
SSSG remains negative at single digit in October 2020. However, we expect SSSG to improve to -1.5% in 4Q20 from -3.7% and -17% in 3Q20 and 2Q20, respectively.
We expect 4Q20 performance to improve QoQ driven by 1) Government stimulus scheme (Shop Dee Mee Kuen) 2) HomePro Expo during 13-22 November 2020 and 3) Margin expansion from better cost control and higher product mix from China.
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.

HMPRO: Expect Government Stimulus Scheme Drive 4Q20 Recover QoQ

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HMPRO: Expect Government Stimulus Scheme Drive 4Q20 Recover QoQ