THAILAND’s TOP LOCAL KNOWLEDGE Current Market
Friday, November 10, 2017
Net Trade
Market data
Close
%∆
SET Index
1,703.0
-0.7%
Turnover (Bt m)
55,042
Mkt Cap (Bt bn)
Net Trade (Bt bn)
SET Index vs MSCI Asia x JP Prev.
-1M
YTD
Foreign
-1.7
-16.1
-3.8
-7.4%
Retail
+2.7
+10.9
-75.4
16,883
-0.6%
Institutes
-1.0
+4.7
+67.9
Stock Gainers
408
stocks
Proprietary
+0.1
+0.5
+11.3
Stock Losers
941
stocks
Note: Data for SET Market only
(index) 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 Jan-16
MSCI Asia x JP (RHS)
Aug-16
Mar-17
750 700 650 600 550 500 450 400
Oct-17
Market Valuation
TOP STORY
Market data
Thanachart Securities
(index)
SET index (LHS)
2017F
2018F
2019F
SIRI (SELL) | Rewards don’t justify price
PE (x)
16.6
14.9
13.6
▪ Despite efforts to boost earnings in 2018-19F by moving forward its JV backlog
Norm EPS growth (%)
10.1
10.2
9.6
EV/EBITDA (x)
10.5
9.4
8.7
P/BV (x)
2.0
1.9
1.7
Yield (%)
3.0
3.3
3.7
ROE (%)
13.0
13.5
13.7
0.5
0.4
0.4
Close
∆
%∆
and the recent deal to acquire 2 PACE condo projects, we see SIRI shares as expensive, at PERs of 11.0x in 2018F and 9.8x in 2019F, as we have yet to factor in SIRI-W2 dilution. We reaffirm our SELL with a new TP of Bt2.10 as we roll over our base year to 2018F.
Net D/E (x)
Major Indices
IVL (BUY)
A major PTA acquisition in Europe
P.4
▪ IVL announced 700kta PTA acquisition in Europe ▪ PTA capacity to grow by 18% post acquisition ▪ Company to be nearly 100% self-sufficient in PTA ▪ We estimate 3.5-4% EPS impact in 2018F
Results Comment AAV (HOLD) BANPU (BUY) BCH (BUY)
▪ ▪ ▪
Lower-than-expected 3Q17 results Strong 3Q17 results, slightly above expectation 3Q17 earnings beat our expectation
Dow Jones
23,462
-101.4
-0.4%
NASDAQ
6,750
-39.1
-0.6%
FTSE
7,484
-45.6
-0.6%
SHCOMP (China)
3,428
12.3
0.4%
29,137
229.0
0.8%
FTSSI (Singapore)
3,424
2.7
0.1%
KOSPI
2,551
-1.8
-0.1%
JCI (Indonesia)
Hang Seng
P.5-15
6,042
-6.9
-0.1%
MSCI Asia
159
-0.1
0.0%
MSCI Asia x JP
704
1.1
0.2%
Currency /Bond data Dollar index Bt/US$
Close
∆
%∆
94.4
-0.4
-0.4%
33.1
0.0
0.0%
113.5
-0.1
-0.1%
10Y bond yield (TH)
2.5
0.0
0.5%
10Y treasury yield (US)
2.3
0.0
0.3%
100JPY/US$
BEM (SELL)
▪
3Q17 results in line
Commodities
▪
Close
∆
%∆
BH (BUY)
Moderate earnings growth in 3Q17, in line
NYMEX (US$/bbl)
57.2
0.4
0.6%
▪
BRENT (ICE) (US$/bbl)
63.9
0.4
0.7%
CHG (HOLD)
Reported weaker-than-expected results in 3Q17
DUBAI (US$/bbl)
61.5
-0.2
-0.3%
Baltic Dry Index
1,481.0
-5.0
-0.3%
GRM (US$/bbl)
6.9
0.3
4.2%
1,287.5
3.8
0.3%
98.0
-0.5
-0.5%
CKP (BUY) COM7 (HOLD)
▪ ▪
3Q17 good results and better-than-expected
Gold (US$/oz)
3Q17 results were slightly better than expected
GFPT (HOLD)
▪
Weaker-than-expected 3Q17 results
GUNKUL (BUY)
▪
3Q17: good results but lower-than-expected
ILINK (BUY)
▪
Lower-than-expected 3Q17
Coal (Newcastle)*
(US$/tonne)* (US$ cent/lb)** HDPE-Naphtha
639.5
-19.8
Ethylene-Naphtha
639.5
-84.8 -11.7%
-3.0%
PX-Naphtha
264.5
-39.8 -13.1%
BZ-Naphtha
239.5
-24.8
Steel-HRC
610.0
1.0
0.2%
Rubber SICOM TSR20
1,417
-21.0
-1.5%
Rubber TOCOM
-9.4%
1,794
-4.9
-0.3%
Raw Sugar**
14.9
0.0
0.3%
White Sugar**
17.7
0.1
0.4%
Source: Thanachart , Bloomberg, Datastream,
Please note that due to the interest of timeliness, this product was not edited.
THAILAND’s TOP LOCAL KNOWLEDGE
Thanachart Securities
Results Comment IVL (BUY)
▪
Strong 3Q17 result, in line
JWD (BUY)
▪
Strong 3Q17 results, in line
LPN (HOLD)
▪
Bottom quarter in 3Q17 as expected
MALEE (HOLD)
▪
Far weaker-than-expected 3Q17
MC (BUY)
▪
Weak 3Q17 earnings, in line
MTLS (BUY)
▪
Strong 3Q17 profits, as expected
PTG (SELL)
▪
Decent 3Q17 profits
TPCH (BUY)
▪
3Q17 normalized earnings meet our target
TTW (BUY)
▪
Stronger-than-expected 3Q17 results
WORK (BUY)
▪
Strong 3Q17 results, in-line
Friday, November 10, 2017
P.16-25
Please note that due to the interest of timeliness, this product was not edited.
SELL
(Unchanged)
Change in Numbers
TP: Bt 2.10 Downside : 11.0%
(From: Bt 1.80 )
10 NOVEMBER 2017
Sansiri Public Co Ltd (SIRI TB) Rewards don’t justify price Despite efforts to boost earnings in 2018-19F by moving forward its JV backlog and the recent deal to acquire 2 PACE condo projects, we see SIRI shares as expensive, at PERs of 11.0x in 2018F and 9.8x in 2019F, as we have yet to factor in SIRI-W2 dilution. We reaffirm our SELL with a new TP of Bt2.10 as we roll over our base year to 2018F.
Thanachart Securities
Reaffirming our SELL call
PHANNARAI TIYAPITTAYARUT 662 – 617 4961
[email protected]
COMPANY VALUATION
Despite SIRI’s improving presales YTD year and an attempt to bring forward its JV backlog to accelerate sales recognition in 2018-19F, which lead us to lift our 2017-19F earnings by 0.3-5%, we reaffirm our SELL call with a higher DCF-based 12-month TP of Bt2.10/share (on our base-year rollover to 2018F), from Bt1.80. The stock looks expensive to us at a PER of 11.0x in 2018F and 9.8x in 2019F, as we have yet to factor in the 19% dilution from SIRI-W2. We see this rich valuation undermining earnings upside in 2018-19F from the recent MoU with PACE Development Pcl (PACE TB, Not rated). We regard its new business partners as being good for the long term with SIRI enjoying strong brand awareness, but do not expect a profit contribution anytime soon.
Bringing JV backlog forward After JVs with BTS Group Holdings (BTS TB, Bt8.40, BUY) three years ago, SIRI has focused on building up JV condo presales, leading to a low backlog from its own condos. As of 1 October, it only had Bt2.5bn in property backlog for next year’s revenues and none for 2019F onward. Since SIRI foresees property sales falling from Bt28bn in 2017 to Bt22bn in 2018, it is speeding up JV condo construction and targets to complete four condos (from one) in 2018 and six (from three) in 2019 while it expects equity income of +-Bt50m this year, Bt1bn in 2018 and Bt800m in 2019.
MoU with PACE to acquire two condos SIRI signed an MoU with PACE to buy the whole Nimit Lang Suan condo project (Bt8bn, 92% sold) and 53 unsold units of The Ritz-Carlton residences (25% of the total units, Bt4bn). We see this is as positive as revenues could come right away for the latter project and in 2019F for the first. The return from this acquisition depends on the purchase price to be determined within a 60-day due diligence period. We roughly estimate a 10% net margin which implies the deal could add profit of Bt400m in 2018F and Bt800m in 2019F. Note that SIRI must shoulder costs to complete the Nimit condo while The Ritz Carlton is finished inventory.
Y/E Dec (Bt m)
2016A
2017F
2018F
2019F
Sales
33,811
34,371
28,942
31,114
Net profit
3,380
3,251
3,118
3,511
Consensus NP
3,393
3,535
3,796
Diff frm cons (%)
(4.2)
(11.8)
(7.5)
Norm profit
3,289
3,251
3,118
3,511
Prev. Norm profit
3,108
3,109
3,394
Chg frm prev (%)
4.6
0.3
3.4
0.2
0.2
0.2
0.2
Norm EPS grw (%)
14.3
(1.8)
(4.9)
12.1
Norm PE (x)
10.3
10.4
11.0
9.8
EV/EBITDA (x)
13.6
15.6
18.2
16.4
P/BV (x)
1.2
1.1
1.1
1.0
Div yield (%)
5.1
4.7
4.5
5.1
11.9
11.1
10.0
10.7
108.1
120.5
96.5
89.1
Norm EPS (Bt)
ROE (%) Net D/E (%)
PRICE PERFORMANCE (Bt/shr) SIRI
3.0
Rel to SET In dex
30
2.5
20
2.0
10
1.5 1.0 Nov-16
(%) 40
0 Feb-17
May-17
Aug -17
(10) Nov-17
COMPANY INFORMATION Price as of 09-Nov-17 (Bt) Market Cap (US$ m) Listed Shares (m shares)
Five new partnerships
Free Float (%)
SIRI has announced investments in five companies to expand its global presence in supporting businesses – hotel management, the “One Night” last-minute booking app, co-working space, host management service, media and lifestyle magazines, and a hydroponic indoor growing system for total investment of Bt2.7bn and with it holding 5.9-35% stakes in each. SIRI plans to consolidate one business, The Standard (hotel management; and which is loss-making), while the rest may not contribute dividend income soon as they are in a ramp-up phase, and hence, likely require some investment.
Avg Daily Turnover (US$ m) 12M Price H/L (Bt) Sector Major Shareholder
2.36 1,021.0 14,325.5 79.1 6.9 2.42/1.62 PROP Founder families 13.0%
Sources: Bloomberg, Company data, Thanachart estimates
Please see the important notice on the back page
THAILAND’s TOP LOCAL KNOWLEDGE
Indorama Ventures Pcl
Friday, November 10, 2017
(IVL TB)
- BUY
News Update
Chak Reungsinpinya | Email:
[email protected]
A major PTA acquisition in Europe
Key Valuations Y/E Dec (Bt m)
IVL announced 700kta PTA acquisition in Europe
Revenue
PTA capacity to grow by 18% post acquisition
Net profit
Company to be nearly 100% self-sufficient in PTA
We estimate 3.5-4% EPS impact in 2018F
IVL has announced it is purchasing a 700kta PTA plant in Portugal. We are positive on this deal as it would make the company fully integrated in terms of its PTA to PET value chain.
We estimate 3.5-4% earnings accretion in
2018F. Maintain BUY.
Capacity impact: The purchase would increase IVL’s PTA capacity in PTA capacity would make IVL nearly 100% self-sufficient in terms of its ability to meet internal PTA demand for PET production (though geographical mismatches mean it would still have to buy and sell PTA in different regions). Estimated purchase price:
IVL typically pays 6x EV/EBITDA for a
commodity chemical business. Assuming EBITDA of $130-140/ton and 6x
2017F
2018F
2019F
254,620 276,319 313,062 327,590 16,197
13,953
18,261
20,491
9,563
16,033
18,261
20,491
Norm net profit Norm EPS (Bt)
2.0
3.2
3.4
3.9
225.8
61.9
7.2
12.2
Norm PE (x)
24.4
15.1
14.1
12.5
EV/EBITDA (x)
12.9
9.6
8.5
7.5
2.6
2.2
2.0
1.8
Norm EPS gr (%)
P/BV (x) Div. yield (%) ROE (%) Net D/E (%)
Europe by 70% and total PTA capacity by 18%. More importantly, this extra
2016
0.7
2.2
2.5
2.8
11.3
15.6
14.8
15.0
106.8
70.6
56.9
41.3
Source: Thanachart estimates
Stock Data Closing price (Bt)
48.50
Target price (Bt)
55.00
Market cap (US$ m)
7,758
Avg daily turnover (US$ m)
22.8
12M H/L price (Bt)
49.50/32.00
EV/EBITDA multiple, we estimate the purchase price to be $550-600m.
Earnings impact: Assuming West PTA spread remains unchanged at about $220-230/ton, we estimate potential earnings accretion of 3.5-4.0% in 2018F.
Price Performance (Bt/shr) 55 50 45 40 35 30 25 20 Nov-16
(%) IVL
Rel to SET Index
40 30 20 10 0
Mar-17
Jul-17
(10) Nov-17
Source: Bloomberg
THANACHART SECURITIES
4
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Asia Aviation Pcl (AAV TB) - HOLD, Price Bt6.30 TP Bt6.40
Results Comment
Saksid Phadthananarak | Email:
[email protected] Lower-than-expected 3Q17 results
▪
▪
▪
AAV reported Bt189m in normalized earnings for 3Q17, down 47% y-y but up 34% q-q. The results were lower than what we had expected. A fall in earnings year on year was mainly due to lower air fares from intense competition and rising oil costs. Even though 9M17 earnings make up only 55% of our full-year earnings forecast, we expect AAV to report strong earnings in 4Q17 due to high seasons.
▪
Even though we believe TAA’s cost competitiveness will allow it to survive in the current competitive market in long term, intense competition and rising oil costs could continue to put its earnings under pressure in short term. We thus maintain our HOLD rating on AAV.
Gross profit
3Q16
4Q16
1Q17
2Q17
3Q17
8,145
7,547
9,150
8,336
8,734
1,201
826
1,581
870
997
659
701
747
697
714
543
125
834
173
283
SG&A Operating profit EBITDA
837
436
1,161
530
658
163
153
252
223
259
0
0
0
0
0
160
125
158
172
149
545
153
927
224
393
(139)
(67)
36
(55)
(8)
0
0
0
0
0
(326)
(34)
(464)
(139)
(212)
Other income Other expense Interest expense Profit before tax Income tax Equity & invest. income Minority interests Extraordinary items
39 397
Net profit Norm alized profit
(145) 41
144 570
30 171
Given an increase in its capacity (ASK) by 7% y-y in 3Q17, its revenues per ASK was flat year on year while a rise in oil costs caused its costs per ASK to increase 4% y-y. This caused its gross margin to fall to 11.4% in 3Q17 versus 14.8% in 3Q16. It also reported negative corporate income taxes in 3Q17 due to promotional privileges under BOI.
▪
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
Thai AirAsia’s (TAA) revenues grew by 7% y-y in 3Q17. Despite its passenger number growth of 14% y-y in 3Q17 to improve its load factor to 85% in 3Q17 vs. 84% in 3Q16, its average fares fell by 7% y-y.
72 261
Key risk: Fuel expenses account for almost 50% of Thai AirAsia’s total costs. Therefore, fluctuations in jet fuel prices present a major risk to our earnings projections.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA Other income
9M as q-q% 5
y-y% 7
15
(17)
2
8
64
% 2017F 74
2017F 35,434
2018F 40,078
67
5,119
5,685
74
2,906
3,166
(48)
58
2,213
2,519
24
(21)
65
3,604
4,118
16
59
86
850
850
Other expense Interest expense Profit before tax Income tax
(13)
(7)
73
653
677
75
(28)
64
2,410
2,692
na
na
38
(72)
(54) (1,236)
Equity & invest. income Minority interests
na
na
73
(1,117)
140
84
145
170
0
Net profit
53
(34)
65
1,535
1,510
Norm alized profit
34
(47)
55
1,365
1,510
53
(34)
65
0.32
0.31
34
(47)
55
0.28
0.31
3Q17
Extraordinary items
357
186
427
141
189
0.08
0.01
0.12
0.04
0.05
0.07
0.04
0.09
0.03
0.04
Yr-end Dec (Bt m )
3Q16
4Q16
1Q17
2Q17
3Q17
(%)
3Q16
4Q16
1Q17
2Q17
Cash & equivalent
6,285
4,661
5,134
5,209
5,540
Sales grow th
12.3
(1.1)
2.2
7.5
7.2
451
446
433
396
524
Operating profit grow th
75.9
(22.7)
(54.2)
(70.6)
(47.8)
EPS (Bt) Normalized EPS (Bt)
(consolidated)
Balance Sheet
A/C receivable Inventory
129
118
101
104
120
2,988
3,534
3,721
2,788
2,938
12
12
12
12
12
Fixed assets
17,493
20,425
21,765
23,068
22,738
Other assets
27,268
27,403
27,402
27,911
28,113
Other current assets Investment
Total assets S-T debt
54,626
56,599
58,568
59,488
59,985
1,031
1,792
1,766
1,578
1,583
406
489
316
285
252
A/C payable Other current liabilities L-T debt Other liabilities Minority interest Shareholders' equity
EPS (Bt) Normalized EPS (Bt) Financial Ratios
EBITDA grow th
42.9
(3.7)
(44.9)
(39.4)
(21.4)
Norm profit grow th
10.6
3.9
(57.8)
(64.4)
(47.2)
Norm EPS grow th
10.6
3.9
(57.8)
(64.4)
(47.2)
Gross margin
14.8
10.9
17.3
10.4
11.4
6.7
1.7
9.1
2.1
3.2
10.3
5.8
12.7
6.4
7.5
4.4
2.5
4.7
1.7
2.2
Operating margin EBITDA margin Norm net margin
6,760
6,990
7,331
6,757
7,378
11,457
13,664
14,410
15,851
15,274
D/E (x)
0.6
0.7
0.7
0.8
0.8
3,567
3,545
3,591
3,552
3,560
Net D/E (x)
0.3
0.5
0.5
0.6
0.5
Interest coverage (x)
5.2
3.5
7.3
3.1
4.4
Interest rate
5.0
3.6
4.0
4.1
3.5
(25.4)
(43.7)
3.9
(24.7)
(2.0)
2.6
1.3
3.0
1.0
1.3
6.6
3.4
7.9
2.6
3.4
9,435
8,850
9,314
9,453
9,666
21,971
21,271
21,841
22,011
22,272
Working capital
174
75
219
215
392
Total debt
12,488
15,455
16,175
17,429
16,857
Net debt
6,202
10,794
11,042
12,220
11,317
Effective tax rate ROA ROE
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
5
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Banpu Public Co Ltd (BANPU TB) - BUY, Price Bt17.40, TP Bt25.00
Results Comment
Chak Reungsinpinya | Email:
[email protected]
Strong 3Q17 results, slightly above expectation
▪
▪
▪
▪
BANPU reports 3Q17 net profit of Bt2.0bn (EPS Bt0.39/sh); excluding FX and hedging impacts, we estimate normalized net profit to be Bt2.9bn (norm EPS Bt0.56/sh), up over 300% y-y and 9% q-q. This was slightly above expectation as strong ASP offset negative surprise in volume. The positive ASP surprise and production cost decline bode well for 4Q17F outlook. BUY.
▪
Indonesia coal: ASP was much higher than expected at $76.3/ton (+49% y-y, +8% q-q) while volume was rather disappointing at 5.6m tons (-21% y-y, +1% q-q) vs 6m tons expectation. Production cost exc. royalty fees surprisingly declined by $1/ton q-q to $42.2/ton.
▪
Australia coal: ASP was A$90.1/ton (+34% y-y, +12% q-q) while volume missed slightly at 3.4m tons (-16% y-y, +3% q-q). Costs were also down A$1.6/ton to A$54.3/ton.
▪
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA
3Q16
4Q16
1Q17
2Q17
3Q17
20,410
23,074
22,225
21,707
24,026
6,315
8,796
8,451
7,590
9,934
4,672
6,171
4,693
4,825
5,874
1,644
2,624
3,758
2,765
4,060
3,193
4,562
5,423
4,435
5,989
(75)
121
292
198
(348)
44
(51)
50
35
20
1,127
1,105
1,085
1,141
1,163
Other income Other expense Interest expense Profit before tax Income tax Equity & invest. income
Consolidated power revenue was up 32% y-y and 6% q-q but gross profit contribution was down 26% y-y, 10% q-q as higher coal costs more than offset increases in power/steam prices. Equity income from three main assets (BLCP and Hongsa power plants and China coal) was up more than 300% y-y but down 15% as stronger China coal profit (+48% q-q) was not enough to offset lower power contribution. Non-recurring items were again FX loss (from stronger THB) of Bt576m and hedging losses of Bt506m. Note that FX loss is purely accounting given BANPU’s USD functional currency; it would have reported FX gain had it used THB as functional currency like most other Thai companies. Balance sheet was a bit stronger despite significant capex. Net D/E declined to 0.95x at end-3Q17 from 0.98x at the end of previous quarter.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA Other income Other expense
398
1,691
2,915
1,787
2,529
Interest expense Profit before tax
276
1,854
1,255
747
1,035
Income tax Equity & invest. income
9M as q-q% 11
y-y% 18
% 2017F 77
2017F 88,347
2018F 94,324
31
57
70
36,998
40,543
22
26
80
19,223
20,379
47
147
60
17,774
20,164
35
88
64
24,681
27,282
1,270
1,051
na
na
11
(44)
(55)
(33)
2
3
320
320
79
4,273
4,027 16,867
42
535
50
14,451
39
274
60
5,058
5,904
(22)
233
107
5,717
5,602 (4,629)
606
2,274
1,510
2,604
2,019
Minority interests
(370)
(879)
(884)
(942)
(912)
Minority interests
na
na
66
(4,149)
Extraordinary items
(458) 70
25 1,509
(766) 1,435
(388) 2,260
(866) 2,025
Extraordinary items
na
na
101
(2,000)
0
2,788
64
8,961
11,937 11,937
Net profit Norm alized profit
529
1,484
2,200
2,648
2,891
0.58
0.28
0.44
0.39
0.14
0.57
0.43
0.51
0.56
3Q16
4Q16
1Q17
2Q17
3Q17
13,967
16,301
18,454
18,636
19,542
7,291
7,674
7,839
8,059
8,315
2,666
3,001
3,043
2,844
4,484
11,139
9,692
9,439
10,602
11,112
Norm profit grow th
na
Norm EPS grow th
(consolidated)
Balance Sheet Cash & equivalent A/C receivable Inventory Other current assets Investment
Norm alized profit EPS (Bt) Normalized EPS (Bt)
31.1
17.7
(19.0)
1,170.5
126.9
270.8
147.0
(4.5)
114.8
71.3
103.7
87.5
na
416.9
443.4
447.0
na
na
287.8
307.7
310.4
30.9
38.1
38.0
35.0
41.3
8.1
11.4
16.9
12.7
16.9
15.6
19.8
24.4
20.4
24.9
2.6
6.4
9.9
12.2
12.0
Operating profit grow th EBITDA grow th
2,879
Other assets
161,271
165,462
160,928
160,988
160,652
Gross margin
243,716
249,850
251,459
254,749
258,306
Operating margin
34,757
21,956
25,658
12,000
22,915
1,567
1,994
1,955
2,170
3,028
Other current liabilities
16,523
17,404
18,518
29,135
17,463
L-T debt
89,564
92,155
89,174
93,963
95,685
EBITDA margin Norm net margin D/E (x)
1.7
1.4
1.4
1.3
1.4
1.6
1.2
1.2
1.1
1.2
Other liabilities
18,900
18,238
16,828
16,094
15,822
Net D/E (x)
Minority interest
11,282
19,227
18,487
19,098
19,889
Interest coverage (x)
83,504
Interest rate
82,289
8,928
8,732
9,771
Total debt
124,321
114,111
114,831
105,963
118,601
Net debt
110,354
97,811
96,378
87,328
99,059
3Q17
2Q17
51,322
80,839
2.31
12.9
2,639
8,681
2.12
1Q17
50,982
78,875
71
9.6
2,042
8,390
2.31
310
4Q16
49,714
71,123
1.74
(3.1)
1,719
Shareholders' equity
10,961
3Q16
46,001
Working capital
71 64
Sales grow th
1,050
S-T debt
9
447 2,067
Financial Ratios
46,331
A/C payable
9 (10)
(%)
Fixed assets Total assets
(10)
0.02
EPS (Bt) Normalized EPS (Bt)
Yr-end Dec (Bt m )
Net profit
Effective tax rate ROA ROE
3
4
5
4
5
4.5
3.7
3.8
4.1
4.1
69.4
109.6
43.1
41.8
40.9
0.9
2.4
3.5
4.2
4.5
3.1
7.9
11.0
13.0
14.0
Sources: Company data, Thanachart estimates
THANACHART SECURITIES
6
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Bangkok Chain Hospital (BCH TB) - BUY, Price Bt16.4, TP Bt18.6
Results Comment
Siriporn Arunothai | Email:
[email protected]
3Q17 earnings beat our expectation
▪
▪
▪
BCH reported Bt303m net profit in 3Q17, up 24% y-y and 76% q-q. This was better than our expectation but it was in line with the street’s forecast. The better-than-expected earnings caused by its lower-than-expected costs.
▪
The company’s earnings growth was mainly due to 1) rising sales by 15% y-y and 20% q-q to Bt2bn, 2) improving gross margin from 33.4% in 3Q16 and 32.0% in 2Q17 to 35.2% in 4Q17 due to economies of scales, 3) SG&A to sales also declining from 12.6% in 3Q16 and 16.2% in 2Q17 to 11.3% in 3Q17 due to no extra provision from Social Security (SS) scheme as it was in 2Q17 and 4) falling loss contribution from the World Medical Center (WMC) Hospital.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
▪
3Q16
4Q16
1Q17
2Q17
3Q17
1,747
1,693
1,622
1,676
2,004
583
527
468
536
704
Gross profit SG&A Operating profit EBITDA Other income Other expense Interest expense Profit before tax Income tax Equity & invest. income
219
222
209
271
226
364
305
259
265
478
497
437
389
398
612
23
26
26
27
16
0
0
0
0
0
28
39
39
28
34
358
292
245
264
460
65
49
40
51
95
0
0
1
(0)
0
BCH’s sales growth was mainly driven by rising revenue from all kinds of patients (cash, SS and referred heart patients under the Universal Coverage Scheme). 9M17 earnings accounted for 75% of our full-year earnings forecast. We expect earnings growth momentum remaining strong in 4Q17F from rising cash patients and price adjustment under SSS. BCH is still our top pick BUY in the healthcare sector.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA Other income
1,086
80
31
79
1,274
1,473
54
23
78
1,801
2,039
(41)
(30)
62
111
118
20
0
0
77
132
117
77
1,252
1,474
229
280
Equity & invest. income
na
140
na
na
Net profit
76
24
Norm alized profit
76
24
76
24
76
24
(%)
3Q16
Sales grow th
18.3
Operating profit grow th
0
0
85
(170)
(188)
0
0
75
853
1,006
75
853
1,006
75
0.34
0.40
75
0.34
0.40
4Q16
1Q17
2Q17
3Q17
5.4
5.2
9.5
14.7
44.1
3.1
(5.8)
1.7
31.5
EBITDA grow th
34.5
3.4
(2.3)
3.0
23
(40)
(63)
0 172
0 303
Extraordinary items
243
198
165
172
303
0.10
0.08
0.07
0.07
0.12
0.10
0.08
0.07
0.07
0.12
3Q16
4Q16
1Q17
2Q17
3Q17
536
680
811
576
698
1,164
997
1,062
1,118
1,123
197
195
186
193
197
86
65
75
72
72
Norm profit grow th
69.3
3.8
5.8
10.0
24.4
Norm EPS grow th
69.3
3.8
5.8
10.0
24.4
(consolidated)
Balance Sheet Cash & equivalent Inventory Other current assets Investment
48
48
47
47
50
7,309
7,371
7,453
7,569
7,630
1,179
1,214
1,215
1,525
1,517
10,520
10,569
10,849
11,099
11,286
1,821
1,596
2,683
2,027
1,160
410
413
420
378
440
A/C payable Other current liabilities L-T debt
2,560
1,007
81
0 165
S-T debt
2,280
70
28
(41)
Total assets
75
3
45
0 198
Other assets
21
75
(45)
Fixed assets
31 (17)
86
0 243
A/C receivable
2018F 7,900
Income tax
(50)
Yr-end Dec (Bt m )
2017F 7,147
22
Extraordinary items Norm alized profit
% 2017F 74
Interest expense Profit before tax
Minority interests
EPS (Bt) Normalized EPS (Bt)
y-y% 15
Other expense
Minority interests Net profit
9M as q-q% 20
585
613
585
621
608
2,499
2,498
1,498
2,495
3,345
EPS (Bt) Normalized EPS (Bt) Financial Ratios
Gross margin
33.4
31.1
28.8
32.0
35.2
Operating margin
20.8
18.0
15.9
15.8
23.9
EBITDA margin
28.5
25.8
24.0
23.7
30.6
Norm net margin
13.9
11.7
10.2
10.3
15.1
D/E (x)
0.9
0.9
0.8
0.9
0.9
0.8
0.7
0.7
0.8
0.8 17.9
Other liabilities
110
113
119
124
130
Net D/E (x)
Minority interest
530
576
617
610
664
Interest coverage (x)
17
11.1
9.9
14.2
4,563
4,761
4,926
4,844
4,938
Interest rate
2.6
3.7
3.8
2.6
3.0
951
779
827
933
879
Effective tax rate
18.3
16.9
16.4
19.4
20.6
Total debt
4,321
4,094
4,181
4,522
4,505
7.5
6.2
6.3
10.8
3,785
3,414
3,370
3,946
3,807
ROA ROE
9.2
Net debt
21.5
17.0
13.6
14.1
24.7
Shareholders' equity Working capital
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
7
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Bangkok Exp. & Metro (BEM TB) - SELL, Price Bt8.10, TP Bt4.50
Results Comment
Saksid Phadthananarak | Email:
[email protected] 3Q17 results in line
▪
▪
▪
BEM reported normalized earnings of Bt940m in 3Q17, up 16% y-y and 30% q-q. This was in line with what we had expected. The strong earnings growth in 3Q17 was mainly due to its revenue growth, lower SG&A expenses and higher equity income. 9M17 earnings make up 73% of our full-year earnings forecast. Even though we like BEM’s stable expressway business with its huge cash flow generation and its mass transit business with many growth opportunities, we are concerned on the lack of clarity over its plans after its existing expressway concession ends in 2020 as the expressway business generated 77% of its gross profits in 9M17. We thus maintain our SELL call on BEM.
Yr-end Dec (Bt m ) Revenue Gross profit
3Q16
4Q16
1Q17
2Q17
3Q17
3,431
3,728
3,731
3,705
3,900
1,389
1,486
1,410
1,428
1,595
262
447
265
284
251
1,127
1,039
1,145
1,144
1,344
SG&A Operating profit EBITDA
▪
(consolidated)
Incom e Statem ent
BEM’s total revenue grew by 14% y-y in 3Q17 driven by 1) an 8% y-y toll revenue growth in the expressway business due to the opening of the new expressway to increase its average traffic volume by 3.1% y-y and the average toll rate by 7.7% and 2) an 28% y-y farebox revenue growth in the rail business due to the average ridership growth of 7.7% y-y in its existing Blue Line and additional service revenue from the opening of the Purple Line. Given its high operating leverage, its gross margin improved to 40.9% in 3Q17 versus 40.5% in 3Q16. Moreover, BEM started to book its interest expenses after the opening of the new projects, causing a rise in its interest expenses by 25% y-y in 3Q17 while its SG&A expenses fell by 4% y-y in 3Q17 due to lower public relation expenses. Its equity income increased 23% y-y in 3Q17 as CKP reported higher earnings.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA
9M as q-q% 5
y-y% 14
% 2017F 74
2017F 15,235
2018F 16,830
12
15
74
6,029
6,951
(12)
(4)
70
1,143
1,178
17
19
74
4,886
5,773
12
10
76
8,324
9,256
(11)
(22)
59
161
234
2,022
1,903
2,067
1,986
2,233
34
6
39
29
26
0
0
0
0
0
291
396
379
380
364
870
649
805
793
1,006
Income tax
171
127
172
159
198
Income tax
24
16
75
705
897
Equity & invest. income
113
40
72
94
139
Equity & invest. income
48
23
74
413
426
(3)
(1)
(2)
(5)
(6)
Minority interests
na
na
160
(8)
(9)
Other income Other expense Interest expense Profit before tax
Minority interests Extraordinary items Net profit
0 808
31 592
0 702
0 723
0 940
Norm alized profit
808
561
702
723
940
EPS (Bt) Normalized EPS (Bt)
0.05
0.04
0.05
0.05
0.06
0.05
0.04
0.05
0.05
0.06
3Q16
4Q16
1Q17
2Q17
3Q17
858
777
2,410
629
4,289
1,477
1,615
1,570
1,408
411
0
0
0
0
0
4,199
6,828
6,100
3,308
4,924
0
0
0
0
0
Fixed assets
60,459
59,621
58,895
61,803
63,759
Other assets
13,689
13,946
14,327
14,345
27,148
(consolidated)
Balance Sheet Yr-end Dec (Bt m ) Cash & equivalent A/C receivable Inventory Other current assets Investment
Total assets S-T debt A/C payable
80,683
82,786
83,303
81,493
100,531
16,895
8,283
8,399
7,787
10,530
1,479
898
1,395
1,301
1,301
Other current liabilities L-T debt
Interest expense Profit before tax
(4)
25
74
1,522
1,522
27
16
74
3,525
4,485
Extraordinary items Net profit
30
16
73
3,225
4,004
Norm alized profit
30
16
73
3,225
4,004
30
16
73
0.21
0.26
30
16
73
0.21
0.26
(%)
3Q16
4Q16
1Q17
2Q17
3Q17
Sales grow th
16.2
24.1
23.3
26.9
13.7
Operating profit grow th
20.6
35.4
13.1
18.3
19.3
EBITDA grow th
12.4
62.9
11.2
11.3
10.4
EPS (Bt) Normalized EPS (Bt) Financial Ratios
Norm profit grow th
184.7
18.4
0.0
0.9
16.4
Norm EPS grow th
184.7
18.4
0.0
0.9
16.4
Gross margin
40.5
39.9
37.8
38.5
40.9
Operating margin
32.8
27.9
30.7
30.9
34.5
EBITDA margin
58.9
51.0
55.4
53.6
57.3
Norm net margin
23.5
15.0
18.8
19.5
24.1
595
377
337
412
1,178
32,098
42,956
42,156
41,154
56,556
D/E (x)
1.7
1.7
1.7
1.6
2.2
364
489
509
529
635
Net D/E (x)
1.6
1.7
1.6
1.6
2.1
Interest coverage (x)
7.0
4.8
5.5
5.2
6.1
Interest rate
2.4
3.2
3.0
3.1
2.5
19.7
19.5
21.4
20.1
19.7
4.0
2.7
3.4
3.5
4.1
11.1
7.6
9.3
9.5
12.4
Other liabilities Minority interest Shareholders' equity
Other income Other expense
92
93
96
100
107
29,160
29,689
30,411
30,209
30,223
(2)
716
175
107
(891)
Total debt
Working capital
48,993
51,239
50,555
48,940
67,086
Net debt
48,134
50,462
48,145
48,312
62,797
Effective tax rate ROA ROE
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
8
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Bumrungrad Hospital Pcl (BH TB) - BUY, Price Bt214, TP Bt240.0
Results Comment
Siriporn Arunothai | Email:
[email protected]
Moderate earnings growth in 3Q17, in line
▪ ▪
▪
BH reported Bt1.1bn net profit in 3Q17, up 9% y-y and 10% q-q. This was in line with ours and the street’s earnings forecast. Key earnings driver was raising revenue of 5% y-y and 9% q-q to Bt4.8bn in 3Q17. This resulted from improving patient flow both in Thai and international patients. Revenue from Thai patients grew by 1.9% y-y and revenue from foreign patients increased by 8.9% y-y.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue Gross profit
3Q16
4Q16
1Q17
2Q17
3Q17
4,579
4,317
4,436
4,416
4,829
1,961
1,752
1,941
1,897
2,073
SG&A Operating profit EBITDA
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A
798
806
739
736
827
1,163
946
1,202
1,161
1,246
1,449
1,237
1,497
1,458
1,548
61
62
58
56
67
0
0
0
0
0
58
56
40
39
36
1,165
952
1,220
1,178
1,276
212
141
220
217
223
1
1
1
1
1
Equity & invest. income Minority interests
Other income Other expense Interest expense Profit before tax
9M17 earnings accounted for 76% of our full year earnings forecast. We see BH’s moderate earnings growth to continue in 4Q17 from rising price and bottom-out foreign patients. We maintain BUY on BH.
Income tax Equity & invest. income Minority interests Extraordinary items Net profit Norm alized profit
10
7
3
(1)
1
1 966
6 825
1 1,005
(1) 960
0 1,056
Operating profit EBITDA Other income
8,483 3,157
7
7
75
4,791
5,326
6
7
75
5,986
6,572
20
10
78
232
249
0
0 133
76
4,859
5,442
5
73
899
1,034
(46)
21
136
2
2
na
(87)
16
23
24
Net profit
10
9
Norm alized profit
10 10 10
9
Extraordinary items
1,056 1.45
1.32
1.12
1.38
1.32
1.45
Yr-end Dec (Bt m )
3Q16
4Q16
1Q17
2Q17
3Q17
(%)
Cash & equivalent
8,223
6,677
8,159
7,816
7,915
Sales grow th
A/C receivable
1,861
1,695
1,422
1,449
1,607
Inventory
282
310
272
306
Other current assets
103
120
150
143
EPS (Bt) Normalized EPS (Bt)
#DIV/0!
0
0
76
3,985
4,434
9
76
3,985
4,434
9
76
5.47
6.09
76
5.47
6.09
Financial Ratios 3Q16
4Q16
1Q17
2Q17
3Q17
6.1
(5.0)
(4.0)
1.8
5.5
Operating profit grow th
15.3
3.4
2.0
12.8
7.2
287
EBITDA grow th
13.9
4.1
2.9
11.0
7
132
Norm profit grow th
16.0
7.7
3.3
13.4
9.5
Norm EPS grow th
16.0
7.7
3.3
13.4
9.4
237
238
239
242
243
10,760
11,579
11,478
11,455
11,513
537
710
737
749
801
22,002
21,330
22,457
22,160
22,497
S-T debt
7,870 3,079
10
961
0
0
0
0
0
847
876
834
865
889
Other current liabilities
2,948
1,482
1,660
1,474
1,508
L-T debt
3,687
3,689
3,690
3,692
3,693
A/C payable
75 75
8
1.32
Total assets
6 4
3
Income tax
1.38
Other assets
9 12
164
1,004
Investment
2018F 19,368
70
819
Fixed assets
2017F 18,219
(38)
1.13
(consolidated)
% 2017F 75
(6)
Interest expense Profit before tax
964
Balance Sheet
y-y% 5
Other expense
1.33
EPS (Bt) Normalized EPS (Bt)
9M as q-q% 9
Gross margin
42.8
40.6
43.8
43.0
42.9
Operating margin
25.4
21.9
27.1
26.3
25.8
EBITDA margin
31.7
28.7
33.7
33.0
32.0
Norm net margin
21.1
19.0
22.6
21.8
21.9
D/E (x)
0.3
0.3
0.2
0.2
0.2
(0.3)
(0.2)
(0.3)
(0.3)
(0.3) 42.6
Other liabilities
523
494
512
528
528
Net D/E (x)
Minority interest
328
314
307
311
302
Interest coverage (x)
25
22.2
37.8
37.6
13,669
14,474
15,455
15,290
15,577
Interest rate
6.3
6.0
4.3
4.2
3.9
1,296
1,130
861
891
1,005
Effective tax rate
18.2
14.8
18.0
18.4
17.5
ROA ROE
17.5
15.1
18.3
17.2
18.9
28.4
23.3
26.8
25.0
27.4
Shareholders' equity Working capital Total debt
3,687
3,689
3,690
3,692
3,693
Net debt
(4,536)
(2,988)
(4,469)
(4,125)
(4,222)
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
9
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Chularat Hospital Pcl (CHG TB) - HOLD, Price Bt2.46, TP Bt2.70
Results Comment
Siriporn Arunothai | Email:
[email protected]
Reported weaker-than-expected results in 3Q17
▪
▪ ▪
▪
CHG reported net profit of Bt168m in 3Q17, up 5% y-y and 42% q-q. This was below our earnings forecast due to its weaker-than-expected revenue contribution from Social Security (SS) patients and higher-than-expected costs from new hospital.
▪
CHG’s y-y earnings growth was mainly driven by sales growth. Meanwhile, strong q-q earnings growth resulted from seasonality factor.
▪
The company’s revenue grew by 7% y-y and 16% q-q to Bt1.0bn in 3Q17, driven by revenue growth from cash patients of 15% y-y and SS patients of 5% y-y. Meanwhile, revenue contribution from Universal Coverage patients declined by -35% y-y.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
▪
3Q16
4Q16
1Q17
2Q17
3Q17
963
912
937
890
1,032
320
288
312
266
334
Gross profit SG&A Operating profit EBITDA
122
140
125
124
129
198
149
187
142
205
Given rising operating cost from new building at Cholvaej Hospital in Choburi province that was opened in July 2017, its gross margin declined from 33.2% in 3Q16 to 32.3% in 3Q17. 9M17 earnings accounted for 71% of our full-year earnings forecast. We estimate its 4Q17F earnings growth momentum to be stronger than 3Q17 due to low base of 4Q16 earnings and rising reimbursement rate under SS scheme. We will revisit our number. However, we see CHG’s current share price already reflected investors’ bearish view on CHG’s weak operation in 1Q17; we thus reaffirm HOLD. CHG announced dividend payment of Bt0.012/share. The XD date is 21 November 2017 and the payment date is 8 December 2017.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA
9M as q-q% 16
1,279
72
527
642
44
3
71
752
861
32
7
73
993
1,115
(25)
(12)
72
23
27
249
205
270
4
4
7
5
Other income
Other expense
0
0
0
0
0
Other expense
Interest expense Profit before tax
3
4
4
3
4
36
201
149
187
146
206
Interest expense Profit before tax
40
40
17
35
27
37
Income tax
35
Extraordinary items Net profit Norm alized profit
0
0
0
0
(0)
(0)
(0)
(0)
(0)
0 160
0 131
0 153
0 119
0 168
160
131
153
119
168
0.01
0.01
0.01
0.01
0.02
0.01
0.01
0.01
0.01
0.02
3Q16
4Q16
1Q17
2Q17
3Q17
Cash & equivalent
390
443
371
394
A/C receivable
281
280
239
98
110
651
503
EPS (Bt) Normalized EPS (Bt)
(consolidated)
Balance Sheet Yr-end Dec (Bt m )
Inventory Other current assets Investment Fixed assets Total assets
0
61
19
32
2
71
756
855
(7)
71
140
162
29
0
0
0
0
na
na
Net profit
42
5
Norm alized profit
42
5
71
616
693
42
5
71
0.06
0.06
42
5
71
0.06
0.06
Extraordinary items
EPS (Bt) Normalized EPS (Bt)
71
0
0
616
693
Financial Ratios (%)
3Q16
4Q16
1Q17
2Q17
3Q17
427
Sales grow th
19.6
7.0
5.7
1.7
7.3
220
257
Operating profit grow th
36.9
(13.3)
(1.3)
3.2
3.3
105
101
106
EBITDA grow th
36.0
(3.8)
5.3
7.7
7
654
701
671
Norm profit grow th
32.2
(7.5)
(2.5)
2.5
4.9
Norm EPS grow th
32.2
(7.5)
(2.5)
2.5
4.9
114
114
114
114
114
2,778
2,936
3,028
3,127
3,247
Other assets
0
Equity & invest. income Minority interests
1,504
71
6
208
0
2018F 4,704
4
6
Minority interests
2017F 3,950
4
253
Equity & invest. income
% 2017F 72
25
Other income
Income tax
y-y% 7
164
133
130
129
115
4,478
4,518
4,641
4,786
4,937
Gross margin
33.2
31.6
33.3
29.9
32.3
Operating margin
20.6
16.3
20.0
16.0
19.8
S-T debt
574
648
472
560
564
EBITDA margin
26.3
22.8
26.5
23.0
26.2
A/C payable
492
366
392
422
520
Norm net margin
16.6
14.4
16.3
13.3
16.3
Other current liabilities
67
82
119
103
78
L-T debt
95
160
216
239
251
D/E (x)
0.2
0.3
0.2
0.2
0.2
Net D/E (x)
0.1
0.1
0.1
0.1
0.1
Interest coverage (x)
74
52.0
69.6
62.6
60.8
2.6
2.2
1.9
1.8
2.2
11.5
18.4
18.8
18.1
Other liabilities
24
39
40
46
44
Minority interest
93
93
119
146
173
Shareholders' equity
3,134
3,130
3,283
3,270
3,306
Interest rate
Working capital
(112)
23
(48)
(101)
(158)
Effective tax rate
20.1
Total debt
669
808
687
799
815
11.7
13.4
10.1
13.8
279
365
316
405
388
ROA ROE
15.0
Net debt
20.5
16.8
19.1
14.5
20.5
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
10
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
CK Power Pcl (CKP TB) - BUY, Price Bt4.42, TP Bt5.00
Results Comment
Supanna Suwankird | Email:
[email protected]
3Q17 good results and better-than-expected
▪
▪
▪
▪
CKP’s 3Q17 net profit came in at Bt165m. Excluding forex translation loss, its norm earnings would be Bt198m, up 18% y-y and tremendously up q-q. The norm results were better than expected.
SG&A and interest expenses rose along with the start-up of BIC-2.
▪
The strong performance y-y was due mainly to the start-up of its 65% owned 120MW BIC-2 gas-fired SPP and Cogeneration unit since 7 July, despite lower power generation from its current core project - a 42% owned 615MW hydro power project in Loas “Nam Ngum 2 (NN2)”.
9M17 norm earnings made up 64% of our full year estimates. We maintain our estimates given our expectation of softer performance q-q as most plants have planned maintenance shut down in 4Q17. Yet, we expect CKP to still post norm earnings growth y-y in 4Q17 with super strong earnings growth in 1H18 due to low base in 1H17.
▪
We remain a BUY on CKP as expected the company to go into new earnings cycle when its 35% owned 1.8GW Xayaburi hydro power project in Laos take off in 4Q19 with expected 110% earnings growth in 2020.
The super strong performance q-q was due to the improved operation of NN2 from seasonality, apart from the start-up of BIC-2 project. For NN2, CKP declared a 70% q-q hike in power generation from the freak low level due low water inflow at the beginning year (still down 13% y-y).
(consolidated)
Income Statement Yr-end Dec (Bt m) Revenue
3Q16
4Q16
1Q17
2Q17
3Q17
1,808
1,418
1,355
1,359
2,279
767
400
396
349
840
95
109
104
76
109
672
291
292
274
731
1,010
628
622
608
1,117
8
11
4
18
19
Gross profit SG&A Operating profit EBITDA Other income Other expense
Gross profit SG&A Operating profit EBITDA Other income
9M as q-q% 68
y-y% 26
Income tax Equity & invest. income
292
326
312
311
345
388
(24)
(16)
(20)
404
2
5
1
1
12
(4)
(14)
(0)
3
1
Interest expense Profit before tax Income tax Equity & invest. income
% 2017F 68
2017F 7,389
2018F 9,346 2,730
140
9
68
2,333
44
15
71
405
425
167
9
67
1,928
2,305
84
11
68
3,449
4,017
6
137
96
43
47
Other expense
Interest expense Profit before tax
Minority interests
Income Statement (Bt m) Revenue
na 11
18
79
1,231
1,190
na
4
50
739
1,162
1,741
472
52
27
40
(58)
na
(17)
(25)
(45) (544)
(215)
185
40
34
(195)
Minority interests
na
na
38
(314)
(319) (177)
(67) (44)
(7) 11
(33) 165
Extraordinary items
na
na
126
(85)
Net profit
(45) 122
Net profit
1,444
35
46
289
Normalized profit
168
142
24
17
198
Normalized profit
1,043
18
64
374
534
EPS (Bt) Normalized EPS (Bt)
0.02
(0.02)
(0.01)
0.00
0.02
1,444
35
46
0.04
0.07
0.02
0.02
0.00
0.00
0.03
EPS (Bt) Normalized EPS (Bt)
1,043
18
64
0.05
0.07
Yr-end Dec (Bt m)
3Q16
4Q16
1Q17
2Q17
3Q17
(%)
3Q16
4Q16
1Q17
2Q17
3Q17
Cash & equivalent
3,457
2,280
2,016
1,367
2,396
Sales growth
20.6
(27.1)
(12.6)
(11.9)
26.1
A/C receivable
1,333
720
852
972
1,654
Operating profit growth
123.8
(60.3)
(26.2)
(30.9)
8.7
57.8
(41.4)
(14.4)
(16.6)
10.6
Extraordinary items
(consolidated)
Balance Sheet
Inventory
534
Financial Ratios
EBITDA growth
Other current assets
4,700
4,667
4,205
3,903
2,874
Norm profit growth
1,211.0
(52.1)
(77.1)
(73.2)
18.2
Investment
5,899
7,164
7,993
8,295
8,751
Norm EPS growth
95.7
(92.9)
(77.1)
(73.2)
18.2
Fixed assets
5,429
5,374
5,371
10,011
9,947
Other assets
40,027
39,101
39,233
35,569
35,359
Gross margin
42.4
28.2
29.2
25.7
36.8
60,844
59,305
59,670
60,116
60,982
Operating margin
37.2
20.5
21.6
20.1
32.1
917
934
1,064
1,081
1,412
EBITDA margin
55.8
44.3
45.9
44.8
49.0
2,116
513
742
1,577
1,570
Norm net margin
9.3
10.0
1.7
1.3
8.7
51
42
33
41
75
22,693
23,104
27,127
27,324
27,104
D/E (x)
0.8
0.8
0.9
1.0
0.9
4,208
4,207
218
223
230
Net D/E (x)
0.7
0.7
0.9
0.9
0.9
Minority interest
13,036
12,762
12,659
12,472
12,963
Interest coverage (x)
3
2
2
2
3
Shareholders' equity
17,822
17,744
17,826
17,398
17,629
Interest rate
4.7
5.5
4.8
4.4
4.9
Effective tax rate
0.6
(20.0)
(4.4)
(3.5)
3.1
ROA ROE
1.1
0.9
0.2
0.1
1.3
3.8
3.2
0.5
0.4
4.5
Total assets S-T debt A/C payable Other current liabilities L-T debt Other liabilities
Working capital
(783)
207
109
(605)
84
Total debt
23,609
24,037
28,192
28,405
28,516
Net debt
20,153
21,758
26,176
27,038
26,119
Sources: Company data, Thanachart estimates
THANACHART SECURITIES
11
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
COM7 Pcl. (COM7 TB) - HOLD, Price Bt16.30, TP Bt13.00
Results Comment
Siriporn Arunothai | Email:
[email protected]
3Q17 results were slightly better than expected
▪ ▪ ▪
▪
COM7’s 3Q17 earnings were at Bt151m, up 66% y-y and 19% q-q. This was slightly better than ours and the street’s earnings forecast. The company’s strong earnings growth was driven by strong revenue growth, falling SG&A to sales and having new equity income contribution from BAF (Thailand) of Bt8m in 3Q17.
▪
COM7’s revenue grew by 41% y-y and 11% q-q to Bt5.5bn in 3Q17. This was mainly driven by rising revenue in all segments (revenue growth from IT segment, mobile segment, service segment and others were 19% y-y, 58% y-y, 109% y-y and 15% y-y, respectively), supported by new store expansion, new products and sales promotion.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
3Q16
4Q16
1Q17
2Q17
3Q17
3,921
5,345
4,899
4,967
5,514
543
733
665
717
760
Gross profit SG&A Operating profit EBITDA Other income
444
587
521
554
579
99
146
144
163
182
137
186
184
205
224
Thanks to rising revenue, COM7’s SG&A to sales declined from 11.3% in 3Q16 and 11.1% in 2Q17 to 10.5% in 3Q17 due to rising bargaining power with suppliers and economies of scales. 9M17 earnings accounted for 71% of our full-year forecast. We expect COM7’s earnings growth momentum to strengthen in 4Q17 on rising revenue from its existing IT and mobile segments in existing and new stores and two new sources of income – iCare and Commercial sales. Though we see upside to our earnings forecast and TP, we believe that a rise in COM7 share price already reflected the company’s good results, we maintain HOLD.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA
20
37
12
5
6
Other income
Other expense
0
0
0
0
0
Other expense
Interest expense Profit before tax
5
7
10
12
11
115
176
146
156
176
26
31
29
31
34
0
0
0
0
8
Income tax Equity & invest. income Minority interests
1
0
0
0
(0)
Net profit
1 91
1 146
2 120
1 126
1 151
Norm alized profit
90
146
117
126
149
Extraordinary items
EPS (Bt) Normalized EPS (Bt)
76
2,833
3,294
75
2,200
2,539
11
83
77
633
755
9
64
77
801
926
13
(71)
28
84
89
(4)
130
78
0
0
42
41
Interest expense Profit before tax
13
54
71
675
803
Income tax
11
35
70
135
161
15
39
Minority interests
na
na
(12)
Extraordinary items
74
131
Equity & invest. income
2
2
3
0
Net profit
19
66
71
560
683
Norm alized profit
19
66
70
557
683
0.47
0.57
0.46
0.57
(%)
3Q16
4Q16
1Q17
2Q17
3Q17
687
Sales grow th
18.0
22.3
23.1
27.7
40.6
578
707
Operating profit grow th
108.3
21.3
28.8
72.4
83.3
2,907
2,736
2,429
64.1
17.3
22.8
54.6
64
96
78
61
Norm profit grow th
175.8
39.0
34.6
56.8
65.6
Norm EPS grow th
175.8
39.0
34.6
56.8
65.6 13.8
3Q16
4Q16
1Q17
2Q17
3Q17
Cash & equivalent
266
711
453
682
A/C receivable
387
499
443
2,073
2,183
53
71
(consolidated)
13
0
0
268
276
481
687
686
684
681
EPS (Bt) Normalized EPS (Bt) Financial Ratios
EBITDA grow th
629
675
757
745
649
13.8
13.7
13.6
14.4
3,901
4,826
5,343
5,771
5,490
Operating margin
2.5
2.7
2.9
3.3
3.3
828
970
1,771
1,785
1,390
EBITDA margin
3.5
3.5
3.8
4.1
4.1
Norm net margin
2.3
2.7
2.4
2.5
2.7
Other assets S-T debt A/C payable
40 30
71
Balance Sheet
Total assets
6 5
70
0.13 0.12
Investment
2018F 23,447
66
0.11 0.10
Fixed assets
2017F 19,996
66
0.10 0.10
Other current assets
% 2017F 77
19
0.12 0.12
Inventory
y-y% 41
19
0.08 0.08
Yr-end Dec (Bt m )
9M as q-q% 11
1,069
1,708
1,298
1,706
1,751
Other current liabilities
49
79
88
91
58
L-T debt
43
39
36
210
158
Gross margin
D/E (x)
0.5
0.5
0.9
1.0
0.7
Net D/E (x)
0.3
0.1
0.6
0.7
0.4 19.7
Other liabilities
37
40
40
43
46
Minority interest
29
1
1
0
1
Interest coverage (x)
28
27.6
19.3
17.2
Shareholders' equity
1,845
1,989
2,108
1,934
2,085
Interest rate
2.8
2.9
2.7
2.5
2.6
Working capital
1,390
974
2,052
1,607
1,385
Effective tax rate
22.3
17.5
19.7
19.9
19.5
Total debt
871
1,009
1,807
1,995
1,549
13.4
9.2
9.0
10.6
606
298
1,354
1,314
862
ROA ROE
9.6
Net debt
20.1
30.4
22.9
24.8
29.7
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
12
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
GFPT Public Co Ltd (GFPT TB) - HOLD, Price Bt17.50, TP Bt21.00
Results Comment
Kalvalee Thongsomaung | Email:
[email protected]
Weaker-than-expected 3Q17 results
▪ ▪ ▪ ▪ ▪
▪
GFPT’s 3Q17 results came in below than our and the market’s expectations due to a lower equity income, despite an improving operating profit margin. GFPT reported profit of Bt505m in 3Q17, up 2% y-y and 2% q-q.
Its 49%-owned GFN and McKey contributed combined profit of Bt65m in 3Q17 vs. Bt108m in 2Q17 and Bt81m in 3Q16. The decrease contributions were due to lower profit contribution from McKey. There was an additional pre-operating cost of McKey’s new plant.
▪
GFPT’s processed chicken revenue (45% of 3Q17 revenue) rose by 8% y-y because of higher export volume.
Gross profit margin widened to 18.1% in 3Q17 vs. 16.3% in 2Q17 and 17.0% in 3Q16 due to lower raw material prices.
▪
GFPT’s feed business revenue (20% of 3Q17 revenue) declined by 20% y-y due to weak feed volume sales.
We maintain our HOLD call for its high-base export volumes in 2017F.
GFPT’s farm business revenue (30% of 3Q17 revenue) increased by 9% y-y on higher selling volumes of live broilers to GFN.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
3Q16
4Q16
1Q17
2Q17
3Q17
4,411
4,479
4,119
4,165
4,399
748
766
629
680
795
Gross profit SG&A Operating profit EBITDA Other income Other expense Interest expense Profit before tax Income tax
310
332
336
320
348
439
434
293
360
447
723
722
595
674
750
86
34
89
88
81
0
0
0
0
0
Operating profit EBITDA Other income
21
20
19
17
446
362
428
511
80
77
19
40
68
Income tax Equity & invest. income
81
76
82
108
65
(5)
(3)
(1)
(2)
(3)
Net profit
0 496
50 492
0 424
0 494
0 506
Norm alized profit
496
443
424
494
506
Interest expense Profit before tax
Minority interests
2Q17
3Q17
Cash & equivalent
346
311
343
590
693
Sales grow th
A/C receivable
902
933
837
887
942
Operating profit grow th
3,215
3,653
3,960
3,846
3,325
20
25 2,655
Fixed assets
7,212
7,431
7,583
7,664
7,851
Other assets
1,387
1,366
1,341
1,315
1,325
15,455
16,160
16,615
16,912
16,814
S-T debt
1,810
2,148
2,294
1,801
1,568
A/C payable
1,086
886
1,010
1,493
1,135
65
164
158
71
51
1,700
1,667
1,433
1,700
1,700
Total assets
Other current liabilities L-T debt
67
1,642
1,641
4
71
2,856
2,933
(7)
(5)
97
265
277
(11)
(31)
71
80
72
19
2
71
1,827
1,846
69
(15)
49
256
258
(40)
(20)
65
390
400
na
na
61
(10)
(10) 1,977
1Q17
2,590
2
11
1,977
4Q16
19
24
1,951
3Q16
2,531
1,357
1,951
0.40
18
2,998
1,302
73
0.40
2,449
2,944
77
73
0.39
21
71
12
2
0.39
2,372
6
9
2
0.34
Other current assets
17
2
0.34
Investment
2018F 18,436
2
0.39
Inventory
2017F 17,690
Norm alized profit
0.35
(consolidated)
% 2017F 72
Net profit
0.40
Yr-end Dec (Bt m )
y-y% (0)
Extraordinary items
0.40
Balance Sheet
9M as q-q% 6
Other expense
25
Minority interests
EPS (Bt) Normalized EPS (Bt)
Gross profit SG&A
500
Equity & invest. income Extraordinary items
Incom e Statem ent (Bt m ) Revenue
EPS (Bt) Normalized EPS (Bt)
2
2
73
1.56
1.58
2
2
73
1.56
1.58
Financial Ratios (%)
EBITDA grow th
3Q16
4Q16
1Q17
2Q17
3Q17
4.1
3.2
5.6
6.7
(0.3)
110.4
44.7
90.1
55.0
1.9
69.9
15.7
36.8
30.6
3.7
Norm profit grow th
51.9
(0.4)
54.3
29.7
2.0
Norm EPS grow th
51.9
(0.4)
54.3
29.7
2.0
Gross margin
17.0
17.1
15.3
16.3
18.1
9.9
9.7
7.1
8.6
10.2
EBITDA margin
16.4
16.1
14.4
16.2
17.0
Norm net margin
11.2
9.9
10.3
11.9
11.5
Operating margin
D/E (x)
0.3
0.4
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.2
29.0
33.9
29.2
34.9
43.8
2.7
2.3
2.2
2.1
2.0
17.3
5.2
9.3
13.3
Other liabilities
510
516
516
523
528
Net D/E (x)
Minority interest
119
121
122
125
128
Interest coverage (x)
10,165
10,658
11,082
11,200
11,705
Working capital
3,031
3,700
3,787
3,240
3,131
Effective tax rate
16.0
Total debt
3,510
3,814
3,727
3,501
3,268
11.2
10.4
11.8
12.0
3,164
3,503
3,384
2,911
2,575
ROA ROE
13.0
Net debt
20.0
17.0
15.6
17.7
17.7
Shareholders' equity
Interest rate
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
13
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Gunkul Engineering (GUNKUL TB) - BUY, Price Bt3.96, TP Bt5.30
Results Comment
Supanna Suwankird | Email:
[email protected]
3Q17: good results but lower-than-expected
▪ ▪
▪ ▪
▪
GUNKUL’s 3Q17 net earnings came in at Bt140m. Excluding forex translation loss, its norm earnings would be Bt184m, up strongly 109% y-y and 67% q-q.
Equity income from investment in two solar power projects was slightly softened y-y due to low radiation and q-q due to seasonality as 3Q is rainy season.
▪
However, the results were still lower than our expectation due to lower-than-expected revenues from its 60MW WED wind power project. We believe this could be due to softer wind speed in September. The performance of all business were strong both y-y and q-q. Overall sales were up strongly mainly boosted by the construction business followed by the wind power business.
9M17 norm earnings made up 51% of our full year forecast. Despite expecting good wind speed in 4Q17, it seems difficult that GUNKUL would meet our full year estimates. We may have to revise our earnings estimates pending on the upcoming analyst meeting.
▪
Yet, we still see GUNKUL as growth stock as it will have another two big wind power projects of a combined 110MW plus it’s a 30MW Japanese based solar power coming on stream in 2018. Maintained BUY.
However, overall gross margin fell to 28.8% from 37.5% in 3Q16 and 31.3% in 2Q17 due to lower margin construction business (10.4% vs 24% in 3Q16). This was despite rising gross margin at the wind power business (64.6% vs 60% in 3Q16. (consolidated)
Income Statement Yr-end Dec (Bt m) Revenue
Income Statement
3Q16
4Q16
1Q17
2Q17
3Q17
648
1,135
895
1,215
1,409
243
344
383
380
405
133
146
147
155
135
110
198
236
225
270
170
270
347
338
396
26
36
14
10
7
Other income Other expense
Gross profit SG&A Operating profit EBITDA Other income Other expense Interest expense Profit before tax Income tax Equity & invest. income
0
0
0
0
0
89
101
142
144
147
48
132
108
91
130
2
32
10
32
64
74
69
(Bt m) Revenue Gross profit SG&A Operating profit EBITDA
9M as q-q% 16
y-y% 117
% 2017F 80
2017F 4,393
2018F 5,785 1,789
7
67
89
1,315
(13)
2
73
595
873
20
145
102
720
916
17
133
81
1,334
2,052
(37)
(75)
6
525
1,079
na
0
0
79
548
711
171
47
697
1,284
na
48
70
128
(6)
65
313
338 (84)
Interest expense Profit before tax
2
65
43
(8)
Income tax
na
73
61
Equity & invest. income
(16)
Minority interests
(22)
(7)
(24)
(21)
(15)
Minority interests
na
na
78
(77)
Extraordinary items
37 125
(23) 145
44 186
17 127
(44) 140
Extraordinary items
na
na
na
0
0
Net profit
10
12
53
863
1,409
109
1,409
Net profit Normalized profit
88
167
142
111
184
Normalized profit
67
51
863
0.02
0.02
0.03
0.02
0.02
10
(4)
53
0.12
0.19
0.01
0.03
0.02
0.01
0.02
EPS (Bt) Normalized EPS (Bt)
67
79
51
0.12
0.19
Yr-end Dec (Bt m)
3Q16
4Q16
1Q17
2Q17
3Q17
(%)
3Q16
4Q16
1Q17
Cash & equivalent
2,871
3,433
2,591
1,671
1,549
Sales growth
(74.7)
51.5
8.0
A/C receivable
840
730
678
992
1,266
Operating profit growth
(67.3)
159.3
115.2
37.8
145.1
Inventory
408
402
412
397
384
EBITDA growth
(50.7)
195.0
108.5
41.5
132.7
Other current assets
1,583
1,508
1,662
2,103
2,287
Norm profit growth
(73.4)
159.9
26.9
(24.5)
108.9
Investment
1,289
1,343
1,365
1,400
1,388
Norm EPS growth
(94.6)
(47.6)
8.8
(35.3)
79.0
11,870
13,605
14,297
15,675
16,854 Gross margin
37.5
30.3
42.8
31.3
28.8
Operating margin
17.0
17.4
26.4
18.5
19.2
EPS (Bt) Normalized EPS (Bt)
(consolidated)
Balance Sheet
Fixed assets Other assets
Financial Ratios 2Q17 103.3
3Q17 117.3
3,853
4,575
4,605
4,487
4,692
22,714
25,596
25,610
26,725
28,419
4,406
4,522
3,933
4,020
3,432
EBITDA margin
26.3
23.8
38.7
27.8
28.1
A/C payable
557
715
670
700
1,212
Norm net margin
13.6
14.7
15.9
9.1
13.1
Other current liabilities
965
1,584
1,284
1,508
1,376
Total assets S-T debt
0
8,562
9,299
10,163
11,872
D/E (x)
0.5
1.4
1.4
1.6
1.7
6,935
463
538
618
756
Net D/E (x)
0.2
1.1
1.1
1.4
1.5
624
641
603
602
594
Interest coverage (x)
2
3
2
2
3
9,227
9,108
9,283
9,114
9,177
Interest rate
8.8
4.6
4.3
4.2
4.0
Effective tax rate
3.9
24.2
9.0
35.3
(6.3)
ROA ROE
1.6
2.8
2.2
1.7
2.7
3.8
7.3
6.2
4.8
8.1
L-T debt Other liabilities Minority interest Shareholders' equity Working capital
691
417
420
688
438
Total debt
4,406
13,084
13,231
14,183
15,304
Net debt
1,535
9,651
10,640
12,512
13,755
Sources: Company data, Thanachart estimates
THANACHART SECURITIES
14
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Interlink Comm. (ILINK TB) - BUY, Price Bt15.50, TP Bt17.00
Results Comment
Rata Limsuthiwanpoom | Email:
[email protected] Pattadol Bunnak, Assistant Analyst | Email:
[email protected]
Lower-than-expected 3Q17
▪ ▪
▪
▪
ILINK’s 3Q17 earnings came in at Bt67m, +9% y-y and +18% q-q. This is lower than our expectation. Excluding Bt35m one-off tax adjustment expense booked in SG&A) in 1Q17, 9M17 earnings were 67% of our full-year forecast. We expect downside to our forecast as we expect 4Q17F earnings to be weaker than this quarter. This is because we believe that most of the engineering backlog of Bt1.5bn, which ILINK plans to book in 2017F, already booked in 3Q17.
Engineering business sales increased significantly from 3Q16 low base and +122% q-q. The y-y growth was from revenue recognition of the large backlog of Bt.1.5bn. 3Q16 was a very low base of Bt14m revenue. As ILINK planned to book most of its carried engineering backlog in 3Q17, sales were also up nicely q-q.
▪
Telecom business via its 60%-owned subsidiary Interink Telecom Pcl (ITEL, unrated) had earnings growth of 39% y-y and 12% q-q.
Cable distribution sales were Bt539m, increase 3% y-y and 8% q-q. The small y-y earnings growth was from aggressive competitions in cable trading industry.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
3Q16
4Q16
1Q17
2Q17
689
888
776
836
1,072
168
180
167
189
211
Gross profit SG&A
3Q17
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A
93
106
141
104
108
75
74
26
85
104
113
114
68
129
151
Other income
9
10
13
12
11
Other expense
0
0
0
0
0
12
12
14
16
17
73
72
25
82
97
9
20
6
16
19 (0)
Minority interests
Operating profit EBITDA
Interest expense Profit before tax Income tax Equity & invest. income
(0)
(0)
(0)
0
Minority interests
(2)
(4)
(7)
(10)
(11)
Extraordinary items
0 61
0 47
0 12
0 56
0 67
Net profit Norm alized profit
Operating profit EBITDA Other income
9M as q-q% 28
y-y% 55
% 2017F 74
2017F 3,648
2018F 4,223
12
25
71
801
958
4
16
84
419
477
21
37
56
382
481
16
34
64
548
656
(15)
22
125
29
30
Other expense 9
48
87
54
61
18
34
57
357
450
Income tax
22
110
58
71
90
Equity & invest. income
na
na
(1)
3
8
na
na
80
(36)
(49)
Net profit
18
9
62
Norm alized profit
18
9
53
253
319
18
9
67
0.60
0.88
18
9
58
0.70
0.88
Interest expense Profit before tax
Extraordinary items
-
(35)
0
218
319
61
47
12
56
67
0.18
0.14
0.04
0.17
0.20
0.18
0.14
0.04
0.17
0.20
Yr-end Dec (Bt m )
3Q16
4Q16
1Q17
2Q17
3Q17
(%)
3Q16
4Q16
1Q17
2Q17
3Q17
Cash & equivalent
1,410
695
631
380
1,164
Sales grow th
(10.6)
32.3
7.8
29.6
55.5
A/C receivable
380
468
792
616
688
Operating profit grow th
(5.6)
21.9
(67.0)
20.2
37.5
Inventory
272
270
276
302
225
EBITDA grow th
(0.4)
23.4
(39.7)
22.8
33.6
Other current assets
543
1,374
1,202
1,634
1,056
6
39
39
39
72
Fixed assets
2,622
2,768
2,919
3,012
3,192
Other assets
51
59
62
65
69
5,284
5,672
5,922
6,049
6,466
130
140
156
174
235
EPS (Bt) Normalized EPS (Bt)
(consolidated)
Balance Sheet
Investment
Total assets S-T debt A/C payable
907
975
1,039
1,097
1,261
Other current liabilities
109
198
205
206
214
L-T debt
989
1,153
1,299
1,355
1,461
18
18
15
16
16
559
563
571
581
592
Other liabilities Minority interest
EPS (Bt) Normalized EPS (Bt) Financial Ratios
Norm profit grow th
2.0
(2.5)
(79.6)
6.9
9.0
Norm EPS grow th
0.9
(2.7)
(79.6)
6.9
9.0
Gross margin
24.4
20.3
21.5
22.6
19.7
Operating margin
11.0
8.3
3.4
10.2
9.7
EBITDA margin
16.4
12.8
8.8
15.5
14.1
8.9
5.3
1.6
6.7
6.2
Norm net margin D/E (x) Net D/E (x)
0.4
0.4
0.5
0.5
0.5
(0.1)
0.2
0.3
0.4
0.2
Interest coverage (x)
9.7
9.5
4.8
8.2
8.8
4.3
4.0
4.2
4.2
4.3
12.6
27.9
23.4
19.3
19.9
5.3
3.5
0.8
3.8
4.3
10.6
7.3
1.9
8.6
10.0
Shareholders' equity
2,572
2,625
2,637
2,621
2,687
Interest rate
Working capital
(255)
(236)
30
(179)
(348)
Effective tax rate
Total debt
1,120
1,293
1,455
1,529
1,696
Net debt
(290)
599
824
1,149
532
ROA ROE
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
15
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Indorama Ventures Pcl (IVL TB) - BUY, Price Bt48.50, TP Bt55.00
Results Comment
Chak Reungsinpinya | Email:
[email protected]
Strong 3Q17 result, in line
▪
▪
IVL reported 3Q17 net profit of Bt3.5bn (EPS Bt0.64/sh). Excluding non-recurring items, we estimate core net profit to be Bt4.6bn. Core EPS was Bt0.86/sh, up 59% y-y and 18% qq after taking into account impact of dilution from the recent warrant exercise. The strong y-y and q-q growths were mainly driven by margin impact with blended EBITDA per ton increasing to $122/ton in 3Q17 from 91 and 107 $/ton in 3Q16 and 2Q17, respectively. The core profit was in line with our expectation. Maintain BUY. By segment, West Feedstock was again the strongest product segment with core EBITDA increasing by 98% y-y and 33% qq. This segment now makes up over 50% of group EBITDA, up from just 33% a year ago on both margin improvement and volume growth. PET segment showed 13% y-y and 27% q-q EBITDA growths, mainly driven by margin improvement. PET makes up another 29% of total EBITDA. Fibers & yarns and Asia PTA segments both showed y-y declines in EBITDA due to weaker margins. (consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA Other income
3Q16
4Q16
1Q17
2Q17
3Q17
65,436
65,289
71,650
71,661
72,605
9,397
9,233
11,748
10,123
12,601
5,526
5,492
5,746
5,863
7,924
3,871
3,740
6,003
4,260
4,677
6,420
6,294
8,431
6,751
7,417
769
340
192
239
239
0
0
0
0
0
1,089
1,047
1,005
991
963
Other expense Interest expense Profit before tax
▪
▪
▪
By region, EMEA (Europe, Middle East and Africa) region EBITDA more than doubled y-y due to significant margin improvement and some volume growth. North America was also strong with 28% y-y growth. EMEA and North America make up 36% and 46% of group EBITDA, respectively, with the rest coming from Asia. By portfolio, HVA (high-value added) product EBITDA was up 47% y-y and 6% q-q due to margin improvement. HVA portfolio now makes up 52% of total EBITDA compared to 46% a year ago. Non-operating items mainly comprise of Bt1.86bn in doubtful account expense related to the recent bankruptcy filing of a major customer. This was previously communicated to the market.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA Other income
26,192
10
16
67
33,866
39,332
(0)
(69)
44
1,526
1,727
na
0
0
(12)
68
4,322
3,861
(3)
4,811
na
na
na
0
0
Minority interests
na
na
55
(306)
(985)
Minority interests
(37)
(1)
(71)
(68)
(30)
Net profit
332 3,184
346 2,959
1,104 4,426
(53) 2,937
117 3,516
Norm alized profit
2,852
2,613
3,322
3,769
4,618
0.61
0.56
0.87
0.56
0.64
0.54
0.49
0.64
0.73
0.86
Yr-end Dec (Bt m )
3Q16
4Q16
1Q17
2Q17
3Q17
(%)
Cash & equivalent
3,415
4,026
4,833
5,070
4,448
Sales grow th
A/C receivable
31,080
31,085
34,075
33,352
31,413
Operating profit grow th
Inventory
EBITDA grow th
Extraordinary items Net profit Norm alized profit EPS (Bt) Normalized EPS (Bt)
na
(65)
(112)
(1,040)
0
20
10
78
13,953
18,261
23
62
73
16,033
18,261
14
5
74
2.80
3.45
18
59
69
3.22
3.45
3Q16
4Q16
1Q17
2Q17
3Q17
5.0
13.6
25.3
7.4
11.0
121.2
591.8
243.5
(18.7)
20.8
Financial Ratios
37,005
40,459
40,735
41,088
41,932
Other current assets
8,293
8,925
8,098
9,522
8,351
Norm profit grow th
Investment
5,680
5,620
6,429
6,380
6,424
Norm EPS grow th
134,190
136,860
134,730
142,627
145,109
65.4
136.9
121.2
(12.3)
15.5
598.9
1,056.7
173.2
27.3
61.9
1,226.6
16,481.9
206.1
30.4
58.9 17.4
14.4
14.1
16.4
14.1
Operating margin
5.9
5.7
8.4
5.9
6.4
11,116
EBITDA margin
9.8
9.6
11.8
9.4
10.2
6,553
34,401
Norm net margin
4.4
4.0
4.6
5.3
6.4
48,802
12,241 D/E (x)
1.2
1.1
1.1
1.1
0.9
Net D/E (x)
1.1
1.1
1.0
1.0
0.8
6
6
8
7
8
4.2
4.2
4.0
4.0
4.0
18.2
1.3
16.4
9.4
14.4
4.5
4.1
5.1
5.7
6.8
13.2
11.9
14.8
16.4
18.3
31,060
31,405
30,023
32,738
31,855
250,724
258,380
258,923
270,777
269,532
19,520
19,116
19,595
11,204
A/C payable
34,403
37,316
39,933
Other current liabilities
10,128
9,429
9,609
L-T debt
79,792
82,958
78,862
90,315
81,389
Gross margin
17,632
17,746
17,484
19,107
19,749
3,040
2,760
2,634
2,009
2,006
Shareholders' equity
86,209
89,055
90,806
92,788
108,629
Working capital
33,683
34,228
34,877
67,887
38,944
Effective tax rate
Total debt
99,313
102,074
98,457
101,519
92,506
ROA ROE
93,624
21,920
Equity & invest. income
47
98,048
68
24,057
(120)
95,897
21
3,825
146
Net debt
25,445
10
19,123
(49)
Minority interest
51,637
23,132
46
(54)
Other liabilities
45,052
84
66
Equity & invest. income
S-T debt
77
43
11
569
Total assets
34
(12)
3,952
329
Other assets
24 35
13
3,508
850
Fixed assets
2018F 313,062
73
5,189
41
(consolidated)
2017F 276,319
Income tax
3,033
645
Balance Sheet
% 2017F 78
Interest expense Profit before tax
3,551
EPS (Bt) Normalized EPS (Bt)
y-y% 11
Other expense
Income tax
Extraordinary items
9M as q-q% 1
96,449
88,057
Interest coverage (x) Interest rate
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
16
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
JWD Infologistics Pcl (JWD TB) - BUY, Price Bt12.70, TP Bt13.20
Results Comment
Siriporn Arunothai | Email:
[email protected]
Strong 3Q17 results, in line
▪
▪
JWD reported Bt58m norm profit in 3Q17, up 136% y-y and 16% q-q. This was in line with our earnings estimate. Note that JWD booked one-time provision of Bt116m in 3Q16 from
revenue sharing with the Port Authority of Thailand (PAT) for dangerous goods warehouse operations which was made retroactive to 2010.
▪
9M17 earnings accounted for 71% of our full-year earnings forecast. Meanwhile, we expect to see better earnings in 4Q17, supported by rising utilization rate in general goods warehouse (including JCS and LCL Consolidation Hub), dangerous good warehouse and yard management. We thus maintain our BUY rating on JWD at TP of Bt13.20/share.
The strong earnings growth from last year resulted from 1) improving demands in cold storage warehouse, dangerous good warehouse, automotive yard and general goods warehouse, 2) revenue from transportation and distribution service also increasing strongly by 29% y-y and 3) improving gross margin and falling SG&A to sales due to operating leverage benefits.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
3Q16
4Q16
1Q17
2Q17
3Q17
558
558
573
578
642
150
162
173
173
195
Gross profit SG&A Operating profit EBITDA Other income
112
113
107
108
118
39
49
66
64
77
136
145
154
173
173
9
(0)
6
10
4
Other expense
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA Other income
Income tax Equity & invest. income
22
22
23
22
21
26
27
49
52
60
5
(1)
8
9
10
(1)
Minority interests
1
(4)
Income tax
749
861
74
450
19
481
98
69
300
379
(0)
27
71
701
810
(57)
(53)
83
24
26
21 17
Net profit
14
na
71
207
287
Norm alized profit
16
136
71
207
287
14
na
71
0.20
0.28
16
136
71
0.20
0.28
(%)
3Q16
4Q16
1Q17
2Q17
3Q17
(6.4)
(4.3)
4.9
3.6
15.1
(68.2)
(57.6)
(7.8)
84.7
98.2
5
58
(0.10)
0.04
0.04
0.05
0.06
0.02
0.03
0.04
0.05
0.06
3Q16
4Q16
1Q17
2Q17
3Q17
Cash & equivalent
262
260
299
279
394
Sales grow th
A/C receivable
450
480
524
516
407
Operating profit grow th
Investment
Extraordinary items
EPS (Bt) Normalized EPS (Bt) Financial Ratios
1
1
2
2
2
EBITDA grow th
(39.1)
(33.9)
(5.9)
29.8
27
290
221
172
280
Norm profit grow th
(71.8)
(51.4)
(12.4)
547.6
136.0
Norm EPS grow th
(71.8)
(51.4)
(12.4)
547.6
136.0
26.9
29.1
30.2
29.9
30.4
7.0
8.7
11.5
11.1
12.0
24.4
26.1
26.9
30.0
26.9
4.4
5.7
7.0
8.6
9.0
79
87
84
81
81
3,479
3,420
3,481
3,496
714
721
736
710
729
5,085
5,318
5,285
5,240
5,389
Gross margin Operating margin
S-T debt
653
483
469
533
585
EBITDA margin
A/C payable
394
324
313
330
394
Norm net margin
Other current liabilities
202
100
34
35
38
1,210
1,677
1,627
1,539
1,516
Other liabilities
61
122
195
196
197
Minority interest
51
50
46
43
38
2,514
2,563
2,600
2,565
2,621
58
158
212
187
15
Total debt
1,863
2,160
2,096
2,072
2,101
Net debt
1,602
1,901
1,798
1,792
1,706
Working capital
na
58 3,520
Other assets
62
16
50
Inventory
94 312
75
40
Other current assets
90 234
(1)
3
(consolidated)
73 69
41
Minority interests
32
Balance Sheet
(6) 135
4
2
3
(6) 16
47
24
Shareholders' equity
72
56
50
L-T debt
6
27
40
Total assets
30
9
79
(1) 57
Fixed assets
2018F 2,645
na
3
Yr-end Dec (Bt m )
2017F 2,405
11
11 43
EPS (Bt) Normalized EPS (Bt)
13
% 2017F 75
(18)
Equity & invest. income
5
Norm alized profit
4
Interest expense Profit before tax
(130) (105)
Net profit
y-y% 15
Other expense
Interest expense Profit before tax
Extraordinary items
9M as q-q% 11
D/E (x)
0.7
0.8
0.8
0.8
0.8
Net D/E (x)
0.6
0.7
0.7
0.7
0.6 8.2
Interest coverage (x) Interest rate Effective tax rate ROA ROE
6
6.6
6.8
7.7
4.7
4.4
4.3
4.3
4.0
21.2
(3.7)
16.3
16.8
16.2
1.9
2.5
3.0
3.8
4.3
3.8
5.0
6.2
7.7
8.9
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
17
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
L.P.N. Development (LPN TB) - HOLD, Price Bt12.60, TP Bt11.80
Results Comment
Phannarai Tiyapittayarut | Email:
[email protected]
Bottom quarter in 3Q17 as expected
▪
▪
▪
LPN reported weak 3Q17 results as expected which was the bottom quarter of this year given no new condominium project completed in the quarter and a significant decline in gross margin as most revenues came from low-margin inventory.
▪
3Q17 net profit was Bt203m, down 35% y-y and 19% q-q, in line with us but 23% below consensus estimate. We believe the market may not aware of weak gross margin on inventory sale from 3Q17 which we have warned earlier in our note published since June this year.
3Q16
4Q16
1Q17
2Q17
3Q17
2,465
2,550
2,473
2,038
2,346
785
784
758
626
601
Gross profit SG&A
9M17 net profit accounts for 59% of our full-year forecast. 4Q17F is expected to be the best quarter of this year on new condo completions.
▪
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
Key reasons for weak results were 1) falling property sales revenues by 7% y-y, and 2) a contraction in gross margin on property sales of 25.0% vs 31.7% in 3Q16 and 30.3% in 2Q17.
Maintain HOLD to Bt11.80 TP.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A
9M as q-q% 15
y-y% (5)
% 2017F 65
2017F 10,605
2018F 14,727
(4)
(23)
66
3,008
4,419
10
(13)
74
1,379
1,767
(18)
(34)
60
1,629
2,652
(17)
(32)
61
1,672
2,697
9
59
49
39
55
na
0
0
398
441
353
314
346
388
343
405
311
255
400
358
421
328
271
Other income
6
13
1
8
9
Other income
Other expense
0
0
0
0
0
Other expense
Interest expense Profit before tax
1
2
2
1
1
(18)
(30)
25
16
30
392
354
404
319
263
Interest expense Profit before tax
(17)
(33)
60
1,653
2,676
82
71
89
71
61
Income tax
(14)
(26)
64
347
562
(0)
Equity & invest. income
na
0
0
(0)
(0)
Operating profit EBITDA
Income tax Equity & invest. income
0
Minority interests Extraordinary items Net profit Norm alized profit
0
0
0
(0)
(0)
(0)
1
1
0 310
0 283
0 315
0 249
0 203
310
283
315
249
203
0.21
0.19
0.21
0.17
0.14
0.21
0.19
0.21
0.17
0.14
3Q16
4Q16
1Q17
2Q17
3Q17
Cash & equivalent
717
591
990
933
A/C receivable
260
226
197
14,524
15,156
10
30
EPS (Bt) Normalized EPS (Bt)
(consolidated)
Balance Sheet Yr-end Dec (Bt m )
Inventory Other current assets Investment Fixed assets Other assets Total assets
Operating profit EBITDA
Minority interests
(60)
na
na
0
0
Net profit
(19)
(35)
59
1,306
2,114
Norm alized profit
(19)
(35)
59
1,306
2,114
(19)
(35)
59
0.88
1.43
(19)
(35)
59
0.88
1.43
3Q17
Extraordinary items
EPS (Bt) Normalized EPS (Bt)
(3,582)
Financial Ratios (%)
3Q16
4Q16
1Q17
2Q17
624
Sales grow th
(59.2)
(20.9)
(44.1)
(60.5)
(4.8)
371
488
Operating profit grow th
(69.5)
(19.5)
(54.4)
(71.0)
(34.2)
15,378
16,671
16,275
EBITDA grow th
(68.8)
(18.6)
(53.1)
(69.9)
(32.2)
81
40
24
Norm profit grow th
(69.4)
(1.8)
(55.2)
(71.2)
(34.5)
Norm EPS grow th
(69.4)
(1.8)
(55.2)
(71.2)
(34.5)
0
0
0
0
0
258
255
251
245
242
2,230
2,300
2,731
2,727
2,806
17,999
18,558
19,628
20,987
20,458
Gross margin
31.9
30.8
30.6
30.7
25.6
Operating margin
15.7
13.4
16.4
15.3
10.9
S-T debt
2,255
2,576
2,383
3,487
3,897
EBITDA margin
16.2
14.0
17.0
16.1
11.6
A/C payable
1,586
1,454
2,820
2,827
2,281
Norm net margin
12.6
11.1
12.7
12.2
8.6
675
706
753
702
432
1,050
1,126
1,530
1,534
1,410
Other current liabilities L-T debt Other liabilities
D/E (x)
0.3
0.3
0.3
0.4
0.4
Net D/E (x)
0.2
0.3
0.2
0.3
0.4 264
304
286
297
302
320
0
0
3
30
29
Interest coverage (x)
271
175
259
260
Shareholders' equity
12,127
12,411
11,841
12,106
12,089
Interest rate
0.2
0.2
0.2
0.1
0.1
Working capital
13,197
13,927
12,755
14,215
14,482
Effective tax rate
21.0
20.1
22.0
22.3
23.1
ROA ROE
6.9
6.2
6.6
4.9
3.9
10.2
9.2
10.4
8.3
6.7
Minority interest
Total debt
3,306
3,701
3,913
5,021
5,307
Net debt
2,589
3,110
2,923
4,088
4,682
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
18
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Malee Group Pcl (MALEE TB) - HOLD, Price Bt45.75, TP Bt40.00
Results Comment
Rata Limsuthiwanpoom | Email:
[email protected] Pattadol Bunnak, Assistant Analyst | Email:
[email protected]
Far weaker-than-expected 3Q17
▪
▪
▪
▪
MALEE reported very weak 3Q17 norm profit of Bt78m, down 52% y-y but up 27% q-q. 9M17 accounts for 64% of our fullyear forecast. Disappointments were mainly from coconut water contract manufacturing (CMG) and domestic branded fruit juice businesses. We have to downgrade earnings further.
▪
Coconut water CMG sales (~25% of tot al sales) fell 50% y-y while domestic fruit juice sales (~25%) fell 15% y-y, but increased 30% q-q. Improvements were from ready-to-drink coffee (20%) and branded export (10%) businesses. The drop in coconut CMG sales was due to 1) The company’s on-going preventive measures for quality control. MALEE expects the adjustment process to be done by this year. 2) The lower demand of coconut water in the US.
▪
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
▪
The y-y drop in domestic fruit juices was from the still weak domestic consumption. The q-q improvement was on the back of the newly packaged-products launched in 3Q17 ( vs. inventory depletion in 2Q17). The q-q improvement however couldn’t offset the y-y disappointments. The growth areas were Ready-to-drink coffee sales which improved by 25% y-y. This was because of the market recovery and the increase of new SKUs from existing customers. Branded export business also grew 60% y-y. The growth was mainly from CLMV countries and China. Domestic canned fruit (10%) remained flat y-y as new crop has started (postponed from 1H17). As MALEE’s 9M17 performance is lower than our expectation, we put our Hold recommendation and TP under review.
Incom e Statem ent
3Q16
4Q16
1Q17
2Q17
3Q17
1,760
1,507
1,515
1,370
1,500
606
486
474
378
446
412
294
341
317
351
194
192
132
61
95
232
234
177
106
141
13
(10)
26
21
8
Other income
Gross profit SG&A Operating profit EBITDA Other income
(Bt m ) Revenue Gross profit SG&A Operating profit EBITDA
Other expense
0
(2)
0
0
0
Other expense
Interest expense Profit before tax
6
5
6
5
6
200
180
152
77
97
Interest expense Profit before tax
Income tax
9M as q-q% 9
y-y% (15)
% 2017F 73
2017F 6,047
2018F 6,752
18
(26)
68
1,899
2,186
11
(15)
73
1,388
1,569
56
(51)
56
511
618
32
(39)
63
671
797
(61)
(36)
91
60
68
10
(8)
54
30
46
27
(52)
60
541
639
40
24
27
14
20
Income tax
36
(51)
56
108
128
Equity & invest. income
0
(40)
(7)
(1)
0
Equity & invest. income
na
na
26
(30)
(20)
Minority interests
1
0
(0)
0
0
Minority interests
Net profit
0 161
0 117
0 118
0 61
0 78
Net profit
27
(52)
64
403
491
Norm alized profit
161
117
118
61
78
Norm alized profit
27
(52)
64
403
491
1.15
0.83
0.85
0.44
0.55
27
(52)
128
1.44
1.75
1.15
0.83
0.85
0.44
0.55
27
(52)
128
1.44
1.75
3Q16
4Q16
1Q17
2Q17
3Q17
(%)
3Q16
4Q16
1Q17
2Q17
3Q17
69
92
95
72
37
Sales grow th
32.3
(0.4)
(1.2)
(21.3)
(14.8)
A/C receivable
815
737
800
682
795
Operating profit grow th
182.8
45.4
(1.0)
(65.9)
(51.2)
Inventory
900
812
786
814
968
EBITDA grow th
161.1
46.5
7.9
(49.7)
(39.3)
Other current assets
116
90
123
137
213
Norm profit grow th
175.5
10.9
7.9
(57.0)
(51.8)
0
0
0
0
0
Norm EPS grow th
175.5
10.4
7.9
(57.0)
(51.8)
Fixed assets
1,236
1,781
1,846
1,941
2,005
Other assets
272
128
152
163
152
29.7
Extraordinary items
EPS (Bt) Normalized EPS (Bt)
(consolidated)
Balance Sheet Yr-end Dec (Bt m ) Cash & equivalent
Investment
Total assets
Extraordinary items
EPS (Bt) Normalized EPS (Bt) Financial Ratios
Gross margin
34.4
32.2
31.3
27.6
11.0
12.7
8.7
4.4
6.3
13.2
15.5
11.7
7.8
9.4
9.1
7.7
7.8
4.5
5.2
3,406
3,640
3,802
3,808
4,170
Operating margin
748
1,087
1,072
1,242
1,499
EBITDA margin
S-T debt A/C payable
487
323
398
402
482
Other current liabilities
469
416
414
370
345
0
0
0
0
0
L-T debt Other liabilities
Norm net margin D/E (x)
0.5
0.7
0.6
0.8
0.9
Net D/E (x)
0.5
0.6
0.6
0.7
0.9
38.0
50.4
31.5
20.9
25.2
3.7
2.0
2.1
1.8
1.6
13.1
17.7
18.7
20.1
240
235
230
203
261
0
0
0
0
0
Shareholders' equity
1,463
1,579
1,687
1,591
1,583
Interest rate
Working capital
1,227
1,226
1,187
1,093
1,281
Effective tax rate
20.0
Total debt
748
1,087
1,072
1,242
1,499
13.2
12.7
6.4
7.8
680
995
977
1,170
1,462
ROA ROE
19.5
Net debt
44.9
30.7
29.0
15.0
19.6
Minority interest
Interest coverage (x)
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
19
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
MC GROUP Pcl (MC TB) - BUY, Price Bt15.30, TP Bt17.00
Results Comment
Siriporn Arunothai | Email:
[email protected]
Weak 3Q17 earnings, in line
▪ ▪
▪
MC reported net profit of Bt94m in 3Q17, down 29% y-y but up 5% q-q. This was in line with our expectation. The company’s weak earnings growth still resulted mainly from weak sales, mainly from upcountry malls due to remaining weak consumption. The company’s sales were up by 3% y-y but drop 2% q-q to Bt903m in 3Q17. MC’s same-store-sales growth in 3Q17 falling by 9% y-y. In 3Q17, MC opened four shops and points of sales (POS), bringing total shops and POS of 879 at ended 3Q17.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
3Q16
4Q16
1Q17
2Q17
3Q17
880
1,411
1,220
919
903
484
805
624
468
473
Gross profit SG&A
9M17 earnings accounted for 57% of our full-year earnings forecast. We expect MC’s earnings momentum to be stronger in 4Q17F due to improving sales (from improving consumption and new product launch and seasonality factor) and improving margin due to economies of scale. Given the in-line results, we maintain our earnings forecast and TP; BUY.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A
9M as q-q% (2)
y-y% 3
% 2017F 67
2017F 4,563
2018F 5,110
1
(2)
66
2,370
2,696
4
5
71
1,613
1,784
(9)
(26)
55
757
913
(7)
(22)
58
920
1,070
(20)
15
65
48
56
0
0
367
447
389
372
386
117
358
235
96
87
161
402
276
135
126
Other income
7
17
12
11
9
Other income
Other expense
0
0
0
0
0
Other expense
Interest expense Profit before tax
1
1
1
1
1
5
(8)
87
2
1
124
374
246
106
95
Interest expense Profit before tax
(10)
(23)
56
803
968
(3)
49
18
16
2
Income tax
(87)
na
47
77
103
5
Equity & invest. income
75
(19)
75
15
20
na
na
63
(10)
(11)
0
0
Net profit
5
(29)
57
730
872
Norm alized profit
5
(29)
57
730
872
5
(29)
57
0.91
1.09
5
(29)
57
0.91
1.09
3Q17
Operating profit EBITDA
Income tax Equity & invest. income
6
Minority interests Extraordinary items Net profit Norm alized profit
(7)
4
3
Operating profit EBITDA
(0)
(2)
(0)
(3)
(3)
Minority interests
0 132
0 317
0 232
0 90
0 94
Extraordinary items
132
317
232
90
94
0.17
0.40
0.29
0.11
0.12
0.17
0.40
0.29
0.11
0.12
3Q16
4Q16
1Q17
2Q17
3Q17
3Q16
4Q16
1Q17
2Q17
Cash & equivalent
864
1,277
1,532
1,313
806
Sales grow th
9.3
9.4
6.6
(8.7)
2.5
A/C receivable
605
796
736
599
571
Operating profit grow th
3.3
40.6
7.6
(47.5)
(25.5)
2,109
1,989
1,925
2,026
2,315
71
53
66
80
136
EPS (Bt) Normalized EPS (Bt)
(consolidated)
Balance Sheet Yr-end Dec (Bt m )
Inventory Other current assets Investment Fixed assets Other assets
0
0
0
0
0
417
422
402
379
505
EPS (Bt) Normalized EPS (Bt) Financial Ratios (%)
EBITDA grow th
4.9
36.3
5.0
(40.3)
(22)
Norm profit grow th
17.3
27.0
14.5
(53.0)
(28.5)
Norm EPS grow th
17.3
27.0
14.5
(53.0)
(28.5)
Gross margin
55.0
57.1
51.1
50.9
52.4
Operating margin
13.3
25.4
19.3
10.4
9.7
658
660
695
694
698
4,724
5,196
5,355
5,091
5,030
S-T debt
163
164
124
111
112
EBITDA margin
18.3
28.5
22.7
14.7
13.9
A/C payable
514
635
543
619
826
Norm net margin
15.0
22.5
19.0
9.8
10.5
25
55
104
82
71
0
0
0
0
0
Total assets
Other current liabilities L-T debt Other liabilities
0.0
0.0
0.0
0.0
0.0
(0.3)
(0.3)
(0.3)
(0.2)
Net D/E (x)
(0.2)
Interest coverage (x)
233
571.6
447.9
222.6
3,817
Interest rate
1.7
1.7
1.7
2.1
2.3
2,061
Effective tax rate
(2.3)
13.0
7.4
15.2
2.2
ROA ROE
11.1
25.6
17.6
6.9
7.5
13.4
31.7
21.7
8.5
9.6
54
55
63
66
69
124
125
129
132
135
Shareholders' equity
3,843
4,161
4,392
4,082
Working capital
2,200
2,149
2,118
2,006
Minority interest
D/E (x)
Total debt
164
165
124
111
113
Net debt
(701)
(1,112)
(1,408)
(1,202)
(693)
197.9
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
20
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Muangthai Leasing Pcl (MTLS TB) - BUY, Price Bt39.25, TP Bt43.0
Results Comment
Sarachada Sornsong | Email:
[email protected]
Strong 3Q17 profits, as expected
▪
▪
MTLS reported very strong 3Q17 profits of Bt650m, up 62% yy and 14% q-q. Results were in-line with our expectation. 9M17 profits made up 73% of our full-year projection. Momentum in 4Q17 will continue to be strong so we re-iterate BUY.
▪
▪ ▪
Key growth drivers y-y were loans expansion, higher interest income and falling cost-to-income ratio.While q-q growth was due mainly to lower provisions.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Interest income
3Q16 1,082
Non-interest income Total income Operating expense Pre-provisioning profit
1,600
3Q17 1,796
102
122
149
189
1,168
1,293
1,451
1,607
119
131
148
165
172
1,113
1,300
1,441
1,616
1,779
537
601
622
705
801
577
699
819
911
978
81
98
152
203
173
496
600
668
708
805
95
117
131
137
154
401
483
536
571
650
Tax Profit after tax
1,415
2Q17
88
Provision for bad&doubtful debt Profit before tax
1,270
1Q17
994
Interest expense Net interest incom e
4Q16
Loans grew 11% q-q and 39% YTD, backed by aggressive branch expansion. NIM dipped slight as funding costs went up on rising proportion of long-term funding. NPL ratio remains low at 1.17% and with its already high loan loss coverage ratio, MTLS put aside lower provisions. Credit costs fell to 1.74% from 2.25% in 2Q17.
Incom e Statem ent (Bt m )
9M as q-q%
y-y% % 2017F
2017F
2018F
Interest & dividend income
12
66
72
Interest expense
27
114
63
729
1,200
11
62
73
5,957
9,002
Net interest incom e Non-interest income Total income Operating expense Pre-provisioning profit Provision for bad&doubtful debt Profit before tax Tax Profit after tax
6,686
10,202
4
44
77
628
812
10
60
73
6,584
9,814
13
49
74
2,875
3,951
7
70
73
3,709
5,863
(15)
114
75
707
1,051
14
62
73
3,002
4,812
13
63
70
600
962
14
62
73
2,402
3,849
Equity income
-
-
-
-
-
Equity income
neg
neg
-
-
Minority interests
-
-
-
-
-
Minority interests
neg
neg
-
-
Extra items
-
-
-
-
-
neg
neg
Net profit
401
483
536
571
650
Net profit
14
62
73
2,402
3,849
Norm alized profit
401
483
536
571
650
Norm alized profit
14
62
73
2,402
3,849
PPP/share (Bt)
0.3
0.3
0.4
0.4
0.5
PPP/share (Bt)
7
70
73
1.7
2.8
EPS (Bt)
0.2
0.2
0.3
0.3
0.3
EPS (Bt)
14
62
73
1.1
1.8
Norm EPS (Bt)
0.2
0.2
0.3
0.3
0.3
Norm EPS (Bt)
14
62
73
1.1
1.8
BV/share (Bt)
2.9
3.2
3.4
3.6
3.9
BV/share (Bt)
9
33
3.9
4.2
5.9
3Q16 307
4Q16 539
1Q17 469
2Q17 458
3Q17 728
3Q17
67 398
65 632
115 615
123 611
133 896
20,513
23,541
25,973
29,306
32,332
Extra items
(consolidated)
Balance Sheet Yr-end Dec (Bt m ) Cash and cash equivalent Other current assets Total current assets Gross loans and accrued interest
Financial Ratios (%)
3Q16
4Q16
1Q17
2Q17
Gross loan grow th (YTD)
65.0
90.3
10.8
25.3
38.5
Gross loan grow th (q-q)
19.7
15.3
10.8
13.1
10.5
Borrow ing grow th (YTD)
101.4
138.7
10.4
26.6
41.3
Borrow ing grow th (q-q)
22.7
18.5
10.4
14.6
11.6
Provisions
559
646
753
923
1,041
Non-interest income (y-y)
41.8
50.0
53.7
56.2
44.4
Net loans
19,954
22,896
25,220
28,383
31,292
Non-interest income (q-q)
12.4
10.4
12.8
11.6
3.9
703
772
829
892
947
Fixed assets
93
99
119
117
130
21,175
24,426
26,813
30,035
33,300
8,269 192
10,288 2,362
9,489 2,563
7,757 3,063
5,592 3,064
Other current liabilities
110
221
361
306
194
ROA
Total current liabilities
8,756
13,100
12,728
11,361
9,227
6,157
4,575
6,793
11,031
15,777
3
8
10
-
-
Other assets Total assets Short term borrow ing Current portion of LT loans
Borrow ings Other liabilities
Cost-to-income
48.2
46.2
43.2
43.6
45.0
Net interest margin
20.3
20.5
20.2
20.4
20.3
Credit cost
1.26
1.31
1.87
2.25
1.74
ROE
26.7
29.9
30.8
30.8
32.9
8.2
8.5
8.4
8.0
8.2
Loan-to-borrow ing
137.1
132.8
132.6
130.6
129.0
Loan-to- total equity
321.4
342.1
348.9
374.1
379.8
NPLs (Btm)
195.0
250.9
283.7
345.5
378.8
-
-
-
-
-
NPL increase
48.6
55.9
32.8
61.9
33.3
Shareholders' equity
6,209
6,692
7,228
7,588
8,238
NPL ratio (%)
Total Liabilities & Equity
21,175
24,426
26,813
30,035
33,300
0.95 286.6
1.07 257.3
1.09 265.3
1.18 267.1
1.17 274.7
Minority interest
Loan loss coverage ratio (%)
Sources: Company data, Thanachart estimates
THANACHART SECURITIES
21
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
PTG Energy Pcl (PTG TB) - SELL, Price Bt21.60, TP Bt26.00
Results Comment
Thanachart Research | Email:
[email protected]
Decent 3Q17 profits
▪
▪
▪
▪
PTG reported 3Q17’s profits of Bt228m, increased 45% y-y but down 14% q-q. Higher sales volume and higher non-oil income base are the key drivers of the y-y growth. The soft profit compared to previous quarter was on seasonal effect. Our earnings forecast and recommendation are under reviewed.
SG&A expenses increased 27% from the same period last year. This is due to the rapid expansion of PTG both in its gas stations, coffee shops, convenience stores, and other non-oil businesses. Flat expense q-q was due to lower sales volume.
▪
Total sales volume was 779m liters in 3Q17, up 16% y-y but down 8% q-q. Lower marketing margin compared to previous quarter was offset by higher gross profit contribution from nonoil businesses.
Numbers of stations increased to 1,609 stations in 3Q17, from 1,506 stations in 2Q17 and 1,407 stations in 4Q16. PTG maintains its target of reaching 1,800 stations by end-2017.
▪
Going forward, the company will continue its aggressive expansion in both gas station and other non-oil businesses. Recovery of oil retail’s marketing margin is intact, while we expect stronger domestic oil demand in 2H17F, after a flat growth y-y in 1H17.
Non-oil revenues increased by 93% y-y and 11% q-q backed by its station expansion and more partnership deals secured this year. Non-oil contributions to gross profit then rose to 8% in 3Q17 from 5% in 3Q16.
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue Gross profit SG&A
3Q16
4Q16
1Q17
2Q17
3Q17
15,733
17,834
20,950
21,520
19,737
1,264
1,526
1,441
1,660
1,667
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A
9M as q-q% (8)
y-y% 25
% 2017F 65
2017F 95,037
2018F 126,553
0
32
61
7,772
9,757
3
27
66
5,808
7,335
(8)
58
47
1,963
2,422
3
49
66
3,359
4,271
1,060
1,218
1,193
1,309
1,345
204
308
249
351
322
535
678
639
778
798
Other income
0
0
0
1
0
Other income
na
0
0
Other expense
0
0
0
0
0
Other expense
na
0
0
Operating profit EBITDA
Interest expense Profit before tax Income tax Equity & invest. income
32
38
37
42
48
172
270
212
310
274
27
69
41
53
53
12
Minority interests
12
11
7
8
0
(0)
0
0
(1)
Net profit
0 157
94 307
(2) 181
0 265
0 228
Norm alized profit
157
212
183
265
228
0.09
0.18
0.11
0.16
0.14
0.09
0.13
0.11
0.16
0.14
3Q16
4Q16
1Q17
2Q17
3Q17
Cash & equivalent
360
637
391
334
A/C receivable
630
675
883
1,208
1,525
4
4
Extraordinary items
EPS (Bt) Normalized EPS (Bt)
Inventory Investment Fixed assets Other assets Total assets
13
47
55
231
318
(12)
60
46
1,733
2,103
Income tax
0
93
42
347
421
Equity & invest. income
9
(38)
26
100
150
na
na
(57)
0
0
na
0
0
Minority interests Extraordinary items
(14)
45
45
1,486
1,833
Norm alized profit
(14)
45
45
1,486
1,833
(14)
45
45
0.89
1.10
(14)
45
45
0.89
1.10
(%)
3Q16
4Q16
1Q17
2Q17
3Q17
583
Sales grow th
31.3
35.3
53.1
22.7
25.4
840
938
Operating profit grow th
81.7
(4.9)
(37.8)
(14.4)
57.7
1,668
1,397
1,823
EBITDA grow th
62.3
19.2
(6.6)
9.0
49.2
83
101
101
Norm profit grow th
127.9
(14.7)
(38.0)
(15.6)
45.4
Norm EPS grow th
127.9
(14.7)
(38.0)
(15.6)
45.4
(consolidated)
Other current assets
Interest expense Profit before tax
Net profit
Balance Sheet Yr-end Dec (Bt m )
Operating profit EBITDA
571
644
642
642
706
5,620
5,800
6,200
6,728
7,472
2,731
3,241
3,447
3,562
4,328
11,124
12,527
13,315
13,604
15,951
EPS (Bt) Normalized EPS (Bt) Financial Ratios
Gross margin
8.0
8.6
6.9
7.7
8.4
Operating margin
1.3
1.7
1.2
1.6
1.6
S-T debt
1,336
1,325
1,346
1,768
2,214
EBITDA margin
3.4
3.8
3.1
3.6
4.0
A/C payable
2,781
3,654
4,107
3,748
4,191
Norm net margin
1.0
1.2
0.9
1.2
1.2
Other current liabilities L-T debt
67
99
151
107
38
2,561
2,684
2,537
3,141
4,418
Other liabilities
121
175
423
167
197
2
14
14
13
14
4,257
4,575
4,737
4,659
4,879
Minority interest Shareholders' equity Working capital
(942)
(1,453)
(1,555)
(1,511)
(1,430)
Total debt
3,897
4,010
3,883
4,909
6,632
Net debt
3,537
3,373
3,492
4,574
6,049
D/E (x)
0.9
0.9
0.8
1.1
1.4
Net D/E (x)
0.8
0.7
0.7
1.0
1.2
Interest coverage (x)
16
18
17
18
17
Interest rate
3.7
3.9
3.8
3.8
3.3
15.9
25.8
19.6
17.0
19.2
5.9
7.2
5.7
7.9
6.2
14.7
19.2
15.7
22.6
19.1
Effective tax rate ROA ROE
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
22
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
TPC Power Holding (TPCH TB) - BUY, Price Bt15.70, TP Bt21.00
Results Comment
Supanna Suwankird | Email:
[email protected]
3Q17 normalized earnings meet our target
▪
▪
▪
TPCH reported 3Q17 net earnings of Bt26m, far below the Bloomberg consensus forecast of Bt36.5m due to extraordinary items. Excluding this, its normalized earnings were at Bt67m, up 35% y-y and 11% q-q. The normalized earnings results were in line with our expectation. The improved performance was mainly due to the start-up of its 80%-owned 9.8MW Pattalung Green Power (PGP) project on 7 July. This drove sales up by 23% q-q while the bigger rise 90% y-y was also pushed by Thungsung Green which commenced operation on 30 September 2016.
Southern provinces the woodchips feedstock cost was stable.
▪ ▪
▪
Gross margin was up to 45.8% from 43.9% in 2Q17 due to lower feedstock cost (woodchips) from GPG than the blended cost. However, GM dropped from 57% in 3Q16 due to increased blended feedstock cost from the Maewong project. (MWE), located in the Central region, which had the supplier management fee contract lifted by 34% from January on increased rice husk feed cost while for the projects in the (consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
3Q16
4Q16
1Q17
2Q17
3Q17
155
234
236
240
295
88
112
117
105
135
23
14
18
20
25
Gross profit SG&A Operating profit EBITDA
SG&A and interest expenses rose along with the start-up of PGP. The share of investment loss was mainly from its 50%owned Siam Power of Bt8.32m. Extraordinary items in 3Q17 comprised: 1) an allowance for deferred income tax recognized of Bt10.8m, and 2) a provision for a capital reserve allowance for NPLs set with Bills of Exchange of Bt29.7m (Bt19.8m was booked in 2Q17). 9M17 normalized earnings account for 74% of our 2017 estimate. We maintain our forecast as is. We reaffirm our BUY call on TPCH. We expect TPCH to continue posting increased normalized earnings as legacy capacity continues to come on stream. Its 2018F performance should be driven by the full-year operation of Thungsung Green and Satun Green, which is scheduled to start operations on 30 December.
Incom e Statem ent (Bt m ) Revenue Gross profit
98
99
86
110
80
118
119
107
139
Other income
4
4
4
4
2
Other income
Other expense
0
0
0
0
0
Other expense
10
14
14
14
18
59
87
89
77
94
0
(2)
0
0
0
Income tax Equity & invest. income
Income tax Equity & invest. income Minority interests
y-y% 90
73
492
819
10
69
91
138
28
68
73
401
680
31
75
74
496
828
(46)
(33)
42
27
33
na
0
0
65
71
105 608
Operating profit EBITDA
Interest expense Profit before tax
35
89
23
58
20
na
70
(117)
(240)
na
0
0
(47)
50
259
388
0
8
4
(25)
(31)
Minority interests
na
0 50
0 70
0 64
(20) 41
(41) 26
Extraordinary items
na (35)
50
70
64
60
67
0.17
0.16
0.10
0.07
0.12
0.17
0.16
0.15
0.17
3Q16
4Q16
1Q17
2Q17
3Q17
Cash & equivalent
173
203
122
144
207
Sales grow th
173.5
A/C receivable
298
295
308
321
371
Operating profit grow th
588.9
(consolidated)
Balance Sheet
Inventory
0
19
0.12
Yr-end Dec (Bt m )
0
64
(25)
Norm alized profit EPS (Bt) Normalized EPS (Bt)
357
(38)
4
Norm alized profit EPS (Bt) Normalized EPS (Bt)
73 na
(52)
(23)
Net profit
2018F 1,659
53
6
Net profit
2017F 1,105
28
(16)
Extraordinary items
% 2017F 70
28
SG&A
66
Interest expense Profit before tax
9M as q-q% 23
11
35
74
259
388
(35)
(47)
50
0.65
0.97
11
35
74
0.65
0.97
3Q16
4Q16
1Q17
2Q17
3Q17
84.5
78.4
59.0
90.4
95.4
109.7
78.3
67.8
Financial Ratios (%)
0
0
0
0
0
EBITDA grow th
370.4
87.8
97.3
72.5
74.8
Other current assets
780
665
675
467
323
Norm profit grow th
711.0
101.3
104.3
20.3
34.7
Investment
302
345
375
414
441
Norm EPS grow th
711.0
101.3
104.3
20.3
34.7
2,674
2,853
3,159
3,497
3,595 Gross margin
57.0
47.8
49.4
43.9
45.8
Operating margin
42.2
41.7
41.9
35.7
37.2
Fixed assets Other assets
79
91
95
93
100
4,305
4,453
4,734
4,936
5,037
S-T debt
139
140
204
246
262
EBITDA margin
51.3
50.4
50.6
44.4
47.1
A/C payable
423
191
174
246
256
Norm net margin
31.9
30.0
27.1
25.2
22.6
0
0
61
91
146
1,311
1,544
1,674
1,698
1,702
D/E (x)
0.8
0.9
0.9
0.9
0.9
97
140
108
61
15
Net D/E (x)
0.7
0.7
0.9
0.9
0.8
429
462
474
526
561
8
8
8
8
8
Shareholders' equity
1,906
1,976
2,040
2,068
2,094
Interest rate
3.0
3.7
3.2
2.8
3.7
Working capital
(125)
104
134
75
115
Effective tax rate
-
-
-
-
ROA ROE
5.0
6.4
5.6
5.0
5.4
10.5
14.5
12.7
11.8
12.8
Total assets
Other current liabilities L-T debt Other liabilities Minority interest
Total debt Net debt
1,450 1,276
1,684 1,481
1,877 1,755
1,945 1,800
1,964 1,757
Interest coverage (x)
(2.1)
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
23
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
TTW Public Co Ltd (TTW TB) - BUY, Price Bt11.90, TP Bt13.50
Results Comment
Saksid Phadthananarak | Email:
[email protected] Stronger-than-expected 3Q17 results
▪
▪
▪
▪
TTW posted 3Q17 normalized earnings of Bt735m, up 14% y-y and 12% q-q. This was stronger than what we had expected. The earnings growth year on year and quarter on quarter was mainly driven by a strong sales volume growth and TTW’s operating leverage. 9M17 earnings make up 78% of our fullyear earnings forecast.
Given its high operating leverage, TTW’s gross margin was improved to 72% in 3Q17 versus 71.3% in 3Q16 while its SG&A expenses slightly increased by 1% y-y. Its interest expense increased 7% y-y in 3Q17 due to the completion of the new tap water plant in June 2017 while its equity income increased 37% y-y in 3Q17 as CKP reported higher earnings.
The strong results confirm our view on TTW’s earnings turnaround in 2H17 onward. We now view TTW as the stock that offers not only decent dividend yield but also earnings growth with high EBITDA margin and ROE. We maintain our BUY rating on TTW. Besides an increase in selling prices year on year, TTW’s sales volume grew by 9.7% y-y in 3Q17 while PTW’s sale volume grew by 4.4% y-y. This caused its total sales in 3Q17 to increase 6% y-y. (consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
3Q16
4Q16
1Q17
2Q17
3Q17
1,356
1,329
1,330
1,394
1,433
967
978
968
1,001
1,032
121
121
124
118
122
846
857
844
883
910
1,083
1,060
1,075
1,128
1,331
27
20
24
33
50
0
0
0
0
0
Gross profit SG&A Operating profit EBITDA Other income Other expense
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA Other income
9M as q-q% 3
y-y% 6
% 2017F 75
2017F 5,575
2018F 5,866 4,216
3
7
75
3,992
4
1
73
502
516
3
8
76
3,490
3,700
18
23
80
4,442
4,703
55
90
817
13
12
Other expense
Interest expense Profit before tax
105
95
93
92
112
768
782
775
824
848
Interest expense Profit before tax
Income tax
22
7
76
391
410
3
10
79
3,113
3,302 660
151
164
167
164
150
Income tax
(8)
(0)
77
623
Equity & invest. income
30
(45)
(11)
2
41
Equity & invest. income
na
37
45
73
135
Minority interests
(4)
(4)
(4)
(4)
(5)
Minority interests
na
na
74
(18)
(18)
Net profit
0 643
0 568
0 593
0 658
0 735
Net profit
12
14
78
2,546
2,758
Norm alized profit
643
568
593
658
735
Norm alized profit
12
14
78
2,546
2,758
0.16
0.14
0.15
0.16
0.18
12
14
78
0.64
0.69
0.16
0.14
0.15
0.16
0.18
12
14
78
0.64
0.69
Yr-end Dec (Bt m )
3Q16
4Q16
1Q17
2Q17
3Q17
(%)
3Q16
4Q16
1Q17
2Q17
3Q17
Cash & equivalent
3,486
4,724
4,844
4,164
3,481
Sales grow th
(2.4)
(0.9)
0.0
2.2
5.7
514
497
566
594
613
Operating profit grow th
(0.3)
3.8
1.1
2.6
7.6
22
22
21
24
23
0.7
1.3
1.9
2.8
22.9
Extraordinary items
EPS (Bt) Normalized EPS (Bt)
(consolidated)
Balance Sheet
A/C receivable Inventory
41
41
49
46
36
Investment
Other current assets
4,527
4,522
4,543
4,434
4,493
Fixed assets
8,705
13,436
8,705
8,644
13,218
Other assets
6,851
2,523
7,377
7,295
2,485
24,147
25,765
26,105
25,201
24,348
S-T debt
Total assets
926
1,090
2,072
2,110
2,120
A/C payable
165
325
186
185
186
Other current liabilities L-T debt
294
439
553
447
307
11,709
12,248
10,995
10,685
10,402
113
127
144
152
161
Other liabilities Minority interest Shareholders' equity
38
42
37
42
38
10,903
11,493
12,118
11,581
11,135
372
194
402
432
450
Total debt
Working capital
12,635
13,338
13,067
12,795
12,522
Net debt
9,149
8,614
8,223
8,631
9,041
Extraordinary items
EPS (Bt) Normalized EPS (Bt) Financial Ratios
EBITDA grow th Norm profit grow th
8.5
(8.4)
(4.2)
2.1
14.2
Norm EPS grow th
8.5
(8.4)
(4.2)
2.1
14.2
Gross margin
71.3
73.6
72.8
71.8
72.0
Operating margin
62.4
64.5
63.5
63.4
63.5
EBITDA margin
79.9
79.7
80.8
80.9
92.9
Norm net margin
47.5
42.8
44.6
47.2
51.3
D/E (x)
1.2
1.2
1.1
1.1
1.1
Net D/E (x)
0.8
0.7
0.7
0.7
0.8
10.4
11.1
11.5
12.3
11.9
3.3
2.9
2.8
2.8
3.5
Effective tax rate
19.6
21.0
21.5
19.9
17.7
ROA ROE
10.5
9.1
9.1
10.3
11.9
23.0
20.3
20.1
22.2
25.9
Interest coverage (x) Interest rate
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
24
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Workpoint Enter’ (WORK TB) - BUY, Price Bt103.5, TP Bt95.0
Results Comment
Kalvalee Thongsomaung | Email:
[email protected]
Strong 3Q17 results, in-line
▪
▪ ▪
▪
WORK’s 3Q17 profit increases y-y and q-q were due to its digital TV ad rate hike, a higher revenue from its online platform, and a higher revenue from its event, concert and stage plays.
▪
WORK reported a profit of Bt380m in 3Q17, up 252% y-y and 2% q-q. WORK’s strong 3Q17 profit was in-line with our expectation, but came at higher than the market’s consensus. TV production revenue (89% of 3Q17 total revenue) came to Bt1,035m, rising by 44% y-y and 1% q-q. The y-y and q-q increases were due to ad rate hike, as well as higher revenue from its digital TV channel via online platform.
3Q16
4Q16
1Q17
2Q17
3Q17
796
473
806
1,114
1,163
358
143
413
666
700
Gross profit SG&A Operating profit EBITDA Other income Other expense Interest expense Profit before tax Income tax Equity & invest. income
3Q17’s portion of SG&A to sales was at 17%, compared with 18% in 2Q17 and 25% in 3Q16. The lower portion y-y and q-q was due to the increases in revenue as well as a lower marketing and administrative expenses.
Incom e Statem ent (Bt m ) Revenue Gross profit SG&A
199
239
160
200
197
160
(96)
253
466
503
296
56
368
588
627
11
23
6
26
6
Other income
0
0
0
0
0
Other expense
2017F 3,857
2018F 4,589 2,790
5
95
80
2,212
(1)
(1)
66
849
964
90
1,363
1,826
8
215
7
112
80
1,986
2,461
(77)
(45)
198
19
23
(19)
71
100
89
93
1,283
1,760
Income tax
10
263
84
295
405
(6)
Equity & invest. income
na
na
na
0
0
Minority interests
na
na
64
(6)
(8)
Net profit
2
252
94
981
1,348
Norm alized profit
2
252
94
981
1,348
2
252
98
2.27
3.08
2
252
98
2.27
3.08
3Q17
23
23
469
486
27
(15)
61
89
98
(5)
% 2017F 80
242
26 234 2
y-y% 46
4
22 (95) 3
Operating profit EBITDA
9M as q-q% 4
0
28 142 1
Minority interests
3Q17 gross margin was at 60.1% vs. 59.8% in 2Q17 and 45.0% in 3Q16. The increases in margin were mainly subject to the improving performances of its digital-TV production business.
▪
(consolidated)
Incom e Statem ent Yr-end Dec (Bt m ) Revenue
Event, concert, and stage play revenues (10% of 3Q17 total revenue) came to Bt116m in 3Q17 vs. Bt88m in 2Q17 and Bt60m in 3Q16. Event, concert, and stage play revenues were recorded via the numbers of stage play, concerts and events
Interest expense Profit before tax
(8)
4
(1)
(1)
(2)
Net profit
0 108
0 (72)
0 173
0 373
0 380
Norm alized profit
108
(72)
173
373
380
0.26
(0.17)
0.42
0.89
0.91
0.26
(0.17)
0.42
0.89
0.91
Yr-end Dec (Bt m )
3Q16
4Q16
1Q17
2Q17
3Q17
(%)
3Q16
4Q16
1Q17
2Q17
Cash & equivalent
1,203
1,241
1,229
1,502
1,614
Sales grow th
24.2
(31.1)
44.0
38.4
46.2
488
282
494
677
632
Operating profit grow th
76.0
322.6
143.1
215.0
Extraordinary items
EPS (Bt) Normalized EPS (Bt)
(consolidated)
Balance Sheet
A/C receivable Inventory Other current assets Investment Fixed assets
Extraordinary items
EPS (Bt) Normalized EPS (Bt) Financial Ratios
87
85
101
137
162
92.8
74.6
111.9
0
118
160
163
70
Norm profit grow th
134.3
na
503.5
178.4
251.8
Norm EPS grow th
134.3
na
503.5
178.4
251.8 60.1
0
36
37
39
34
1,027
1,009
1,008
1,020
1,108
EBITDA grow th
31.4
na (72.8)
2,742
2,652
2,593
2,562
2,674
Gross margin
45.0
30.2
51.3
59.8
5,547
5,422
5,623
6,101
6,294
Operating margin
20.1
(20.3)
31.4
41.8
43.2
S-T debt
787
625
624
596
568
EBITDA margin
37.2
11.9
45.7
52.7
53.9
A/C payable
364
310
423
514
512
Norm net margin
13.6
(15.2)
21.5
33.5
32.7
2
22
79
170
200
467
579
344
739
712
Other assets Total assets
Other current liabilities L-T debt Other liabilities
892
900
907
516
519
25
6
8
6
8
3,010
2,980
3,239
3,561
3,773
211
57
172
301
282
Total debt
1,254
1,204
968
1,334
1,281
Net debt
51
(36)
(261)
(167)
(334)
Minority interest Shareholders' equity Working capital
D/E (x)
0.4
0.4
0.3
0.4
0.3
Net D/E (x)
0.0
(0.0)
(0.1)
(0.0)
(0.1)
10.5
2.5
14.4
25.6
27.3
8.8
7.3
9.4
8.0
7.0
Effective tax rate
19.1
16.3
26.1
19.1
20.2
ROA ROE
7.8
(5.3)
12.6
25.4
24.5
14.6
(9.6)
22.3
43.9
41.4
Interest coverage (x) Interest rate
So urces: Co mpany data, Thanachart estimates
THANACHART SECURITIES
25
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
NEWS CLIPPING
Somkid: Policies to stay steady : Goals will not change in cabinet reshuffle. Thailand's economic
Bangkok Post
growth is solid and economic policies are unlikely to be derailed by any cabinet reshuffles, says Deputy Prime Minister Somkid Jatusripitak.
Growth will continue,says Somkid : More reforms on the cards after estimated economic expansion of
The Nation
more than 4% in Q3. The Thai economy is expected to continue its growth momentum next year with more economic reforms after estimates put the third-quarter growth this year at above 4 per cent.
Political role for the NCPO could break law: Meechai : Junta leaders say pm's questions meant to
The Nation
solicit public's opinions. The National Council for Peace and Order (NCPO) would risk breaking the law if it officially supports a particular political party, Meechai Ruchupan, head of the Constitution Drafting Commission (CDC) and a member of the NCPO,warned yesterday.
Local polls could trigger party ban end : Deputy Prime Minister Wissanu Kreangam hinted yesterday
Bangkok Post
the ban on political activities could be relaxed to allow local elections to take place ahead of national polls.
Thailand 2018 report to provide advice to potential investors : Opportunities for foreign investors
The Nation
emerging from Thailand's 4.0 strategy and planned infrastructural developments will be mapped out in a forthcoming report on the country by the global research and consultancy firm Oxford Business group (OBG).
Flood damages hit Bt14 billion since July with Khon Kaen residents blaming authorities : By the
The Nation
middle of the year,floods had already caused estimated damages of Bt14 billion,the head of the Agricultural Economic Operation Centre said yesterday.
Siam,Tesco Lotus jump aboard tax incentive scheme : A Mega-shopping centre and a major
The Nation
convenience store chain have launched promotion campaigns aligned with the government's shopping tax rebate scheme intended to encourage people to shop their way to a stronger economy.
Nok Air plans to become a 'lifestyle' carrier : Airline Nok Air is hopeful to see a better financial
The Nation
performance next year following its continuous improvement programme to increase operation efficiency and reduce costs, said its chief executive officer Piya Yodmani yesterday.
TCC Land Asset World sets Bt8.2bn budget for shopping centres upgrade: Part of attempt to reach
The Nation
17% growth in retail revenue to bt3.5bn next year. TCC Land Asset World Co Ltd, a property arm of beverage tycoon Charoen Sirivadhanabhakdi, has allocated a budget of Bt8.2 billion to renovate and enhance its shopping centres in 2018-19.
THANACHART SECURITIES
26
THAILAND’s TOP LOCAL KNOWLEDGE
Market data
Friday, November 10, 2017
Close
∆
%∆
SET Index
1,703.0
-11.6
-0.7%
SET50 Index
1,081.5
-7.5
-0.7%
BCPG
PTTEP
-0.7%
PT TGC
DTAC
SET100 Index
2,438.2
MAI Index
-17.0
PRICE CHANGE - MOST ACTIVE Change 1 Day (%)
Change 1 Week (%)
SCB
IVL
IVL
PT TGC
CPALL
MINT
565.9
-1.3
-0.2%
Economic data
Current
-1M
-3M
Saving Rate (%)
0.50
0.50
0.50
PT TEP
PT T
PT T
AOT
ADVANC
SCC
SCC
ADVANC
Fixed Deposit - 3M (%)
1.00
1.00
1.00
Fixed Deposit - 1Y (%)
1.50
1.50
1.50
Govt Bond Yield 1Y (%)
1.40
1.43
1.38
Govt Bond Yield 10Y (%)
2.45
2.41
2.48
Treasury Yield – 10Y (%)
2.33
2.36
2.19
Policy Rate (%)
1.50
1.50
1.50
VIX Index
9.78
10.08
TED Spread (%)
0.19
0.28
Source: Bloomberg, Datastream, Thai BMA
SET Forward PE Band (index) 3,000 2,500 2,000
TRUE
KCE (10)
(5)
0
5
(5)
10
Change 1Month (%)
0
5
10
Change Year-To-Date (%)
15.51
IVL
AOT
0.28
KBANK
PT TGC
PT TEP
ADVANC
PT T
KBANK
TOA
CPALL
SCB
PT T
AOT
PT TEP
25x
PT TGC
SCB
21x
ADVANC
SCC
17x
SCC
BANPU
(10)
(5)
0
5
10
15
(20)
0
20
40
60
2. 0
4. 0
13x
1,500
9x
1,000
6x
500
SECTOR CHANGE Change 1 Day (%)
Change 1 Week (%) PETRO
2016
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
0
2018F
MEDIA
SET PE Discount to MSCI Asia x JP (x) 10 8
+2 STD = 6.2x
6
+1 STD = 3.4x
4 2 (2)
-1 STD = -2.2x
(4)
-2 STD = -5x
(6) (8) Jan-03
Jul-06
Source: Bloomberg
Jan-10
MEDIA
COMM
ENERG
BANK
PROP
TRANS
AUTO
FOOD
FOOD
SET
SET
HELTH
COMM
ENERG
BANK
AUTO
TRANS
ICT
HELTH
PETRO
CONMAT
PROP
ICT
ETRON
ETRON
(1.5)
Average = 0.6x
0
CONMAT
Jul-13
Jan-17
(1.0)
(0.5)
0.0
Change 1 Month (%)
(4.0)
0.0
Change Year-To-Date (%) PETRO
MEDIA AUTO
AUTO
PROP
TRANS
COMM
MEDIA
FOOD
PROP
PETRO
ENERG
BANK
COMM
ENERG
SET
HELTH
BANK
SET
ICT
TRANS
FOOD
CONMAT
HELTH
ETRON
CONMAT ETRON
ICT (10.0) (5.0)
(2.0)
0.0
5.0
10.0
(20.0)
0. 0
20.0
40.0
Source: Bloomberg
THANACHART SECURITIES
27
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
REGIONAL MARKET PERFORMANCE
REGIONAL FUND FLOWS
Change 1 Day (%)
Change 1 Day (-1D)
Change 1 Week (%)
(US$ m)
0
0 Hang Seng
Hang Seng
China
Nikkei
MSCI Asia x JP
China
Malaysia
Singapore
(150 )
Philippines
MSCI Asia x JP
(200 ) (250 )
India
Nasdaq
Singapore
Malaysia
S.Korea
Indonesia
Indonesia
S&P500
(5)
(50)
(13) (52)
(100 )
(60) (104)
India
Phil ip.
Indone sia Thailan d
Kor ea
Taiwan
(96)
(106)
(234) Asia-6
Change 1 Week (-1W) (US$ m)
Nikkei
Thailand
400
S&P500
Philippines
300
288 207
200 Dow Jones
Dow Jones
100
16
0
0
Nasdaq
S.Korea
Thailand
Taiwan
(200 )
Taiwan
India
(300 )
(100 )
(308)
(400 ) (1.0) (0.5) 0. 0
0.5
1. 0
Change 1 Month (%)
(2.0) (1.0) 0. 0 1.0 2.0 3. 0
Change Year-To-Date (%)
India
Kor ea
Phil ip.
Asia-6
Indone sia Thailan d
Taiwan
Change 1 Month (-1M) (US$ m)
Nikkei
4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 (500 ) (1,000)
MSCI Asia x JP
S. Korea
Hang Seng
MSCI Asia x JP
S.Korea
India
Nasdaq
Singapore
India
Dow Jones
Philippines
Nasdaq
Nikkei
Indonesia
Singapore
Hang Seng
Dow Jones
Philippines
S&P500
20,000
S&P500
Indonesia
15,000
China
China
10
Source: Bloomberg
THANACHART SECURITIES
15
Kor ea
India
Taiwan
Phil ip.
(636) (555) Thailan d Indone sia
20,454
7,470
7,297
6,490
5,000
1,098
0
Malaysia
5
55
10,000
Thailand
0
926
(US$ m) 25,000
(5)
1,508
Change Year-To-Date (YTD)
Taiwan
Malaysia
2,276
Asia-6
Taiwan
Thailand
3,574
0
10
20
30
40
(5,000) Asia-6
Kor ea
Taiwan
India
Phil ip.
(127) (1,774) Thailan d Indone sia
Source: Bloomberg
28
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
General Disclaimers And Disclosures: This report is prepared and issued by Thanachart Securities Public Company Limited (TNS) as a resource only for clients of TNS, Thanachart Capital Public Company Limited (TCAP) and its group companies. Copyright © Thanachart Securities Public Company Limited. All rights reserved. The report may not be reproduced in whole or in part or delivered to other persons without our written consent.
This report is prepared by analysts who are employed by the research department of TNS. While the information is from sources believed to be reliable, neither the information nor the forecasts shall be taken as a representation or warranty for which TNS or TCAP or its group companies or any of their employees incur any responsibility. This report is provided to you for informational purposes only and it is not, and is not to be construed as, an offer or an invitation to make an offer to sell or buy any securities. Neither TNS, TCAP nor its group companies accept any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
The information and opinions contained herein have been compiled or arrived at from sources believed reliable. However, TNS, TCAP and its group companies make no representation or warranty, express or implied, as to their accuracy or completeness. Expressions of opinion herein are subject to change without notice. The use of any information, forecasts and opinions contained in this report shall be at the sole discretion and risk of the user. TNS, TCAP and its group companies perform and seek to perform business with companies covered in this report. TNS, TCAP, its group companies, their employees and directors may have positions and financial interest in securities mentioned in this report. TNS, TCAP or its group companies may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any entity mentioned in this report. Therefore, investors should be aware of conflict of interest that may affect the objectivity of this report.
THANACHART SECURITIES
29
THAILAND’s TOP LOCAL KNOWLEDGE
Friday, November 10, 2017
Recommendation Structure: Recommendations are based on absolute upside or downside, which is the difference between the target price and the current market price. If the upside is 10% or more, the recommendation is BUY. If the downside is 10% or more, the recommendation is SELL. For stocks where the upside or downside is less than 10%, the recommendation is HOLD. Unless otherwise specified, these recommendations are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a temporary mismatch between upside/downside for a stock based on the market price and the formal recommendation. For sectors, we look at two areas, ie, the sector outlook and the sector weighting. For the sector outlook, an arrow pointing up, or the word “Positive”, is used when we see the industry trend improving. An arrow pointing down, or the word “Negative”, is used when we see the industry trend deteriorating. A double-tipped horizontal arrow, or the word “Unchanged”, is used when the industry trend does not look as if it will alter. The industry trend view is our top-down perspective on the industry rather than a bottom-up interpretation from the stocks we cover. An “Overweight” sector weighting is used when we have BUYs on majority of the stocks under our coverage by market cap. “Underweight” is used when we have SELLs on majority of the stocks we cover by market cap. “Neutral” is used when there are relatively equal weightings of BUYs and SELLs.
Thanachart Securities Pcl. Research Team 19 Floor, MBK Tower 444 Phayathai Road, Pathumwan Road, Bangkok 10330 Tel: 662 - 617 4900 Email:
[email protected] Pimpaka Nichgaroon, CFA Head of Research
Adisak Phupiphathirungul, CFA Retail Market Strategy
Chak Reungsinpinya Energy, Petrochemical
[email protected]
[email protected]
[email protected]
Kalvalee Thongsomaung Food, Hotel, Media
Phannarai Tiyapittayarut Property, Retail
[email protected]
Pattarawan Wangmingmat Senior Technical Analyst
[email protected]
Rata Limsuthiwanpoom Industrial Estate, Property Fund, REITs
Saksid Phadthananarak Construction, Transportation
Sarachada Sornsong Bank, Financial, Telecom
[email protected]
[email protected]
[email protected]
Siriporn Arunothai Small Cap Research, Healthcare
Supanna Suwankird Energy, Utilities
Wichaya Wongpanuwich, CFA, FRM Analyst, Retail Market
[email protected]
[email protected]
[email protected]
Witchanan Tambamroong Technical Analyst
[email protected]
Nuttapop Prasitsuksant Assistant Analyst
[email protected]
Pattadol Bunnak Assistant Analyst
[email protected]
Sittichet Rungrassameephat Assistant Analyst, Quantitative
Thaloengsak Kucharoenpaisan Assistant Analyst
[email protected]
[email protected]
THANACHART SECURITIES
[email protected]
30
