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

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Equity Bottom-Up

Analyst meeting yesterday came out with a neutral tone. We expect 4Q20 core operation to gradual recover, led by sales volume growth in all business units and margin improvement in IOD unit. <ul>
<li>We foresee a slight recovery in IVL’s earnings in 4Q20, as we expect sales volume to continuously grow QoQ. Also, we believe fiber, MEG and MTBE margin to start improving after polyester and oil consumption have recovered in 3Q20.</li>
<li>Meanwhile, we expect core PET business to strengthen as PET margin in US and Europe starts to rise in September.</li>
<li>IVL reported a core profit at Bt800m (-71%YoY, -69%QoQ). A weak performance was dragged by i) margin contraction in combine PET and IOD products and ii) plant shutdown due to hurricane Laura and lightning strike (in IOD unit), despite sales volume growth YoY and QoQ.</li>
<li>We revise down 2020E earning by 70% to factor in a weakness in 3Q2o.</li>
</ul>We maintain our BUY rating with a trimmed target price at Bt30.0 (from Bt32), based on 14.4xPE’21E which is equal to world materials sector average.

Analyst meeting yesterday came out with a neutral tone. We expect 4Q20 core operation to gradual recover, led by sales volume growth in all business units and margin improvement in IOD unit. 
We foresee a slight recovery in IVL’s earnings in 4Q20, as we expect sales volume to continuously grow QoQ. Also, we believe fiber, MEG and MTBE margin to start improving after polyester and oil consumption have recovered in 3Q20.
Meanwhile, we expect core PET business to strengthen as PET margin in US and Europe starts to rise in September.
IVL reported a core profit at Bt800m (-71%YoY, -69%QoQ). A weak performance was dragged by i) margin contraction in combine PET and IOD products and ii) plant shutdown due to hurricane Laura and lightning strike (in IOD unit), despite sales volume growth YoY and QoQ.
We revise down 2020E earning by 70% to factor in a weakness in 3Q2o.
We maintain our BUY rating with a trimmed target price at Bt30.0 (from Bt32), based on 14.4xPE’21E which is equal to world materials sector average.

Indorama Ventures

IVL: Expects a Gradual Recovery in 4Q20