THAILAND’s TOP LOCAL KNOWLEDGE Current Market

Thursday, November 09, 2017

Net Trade

Market data

Close

%∆

SET Index

1,714.7

0.1%

Turnover (Bt m)

59,447

Mkt Cap (Bt bn)

SET Index vs MSCI Asia x JP Prev.

-1M

YTD

Foreign

+0.5

-14.4

-2.1

4.7%

Retail

+0.1

+8.3

-78.1

Institutes

-0.8

+5.7

+68.9

Proprietary

+0.2

+0.4

+11.2

16,990

0.2%

Stock Gainers

610

stocks

Stock Losers

705

stocks

Net Trade (Bt bn)

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

DTAC (BUY) | Unwarranted concerns

PE (x)

16.7

15.1

13.7

▪ DTAC’s approach is a cost/return optimization one so we don’t expect it to face

Norm EPS growth (%)

10.1

10.2

9.6

EV/EBITDA (x)

10.6

9.5

8.7

P/BV (x)

2.1

1.9

1.8

Yield (%)

3.0

3.3

3.6

ROE (%)

13.0

13.5

13.7

0.5

0.4

0.4

Close

∆

%∆

auction-cost overruns. It is also confident in its partnership deal with TOT for the 2300MHz spectrum, which it expects to sign by 4Q17, so network capacity should not be an issue. DTAC remains a value play, in our view, with substantial 47% upside to our TP.

Net D/E (x)

Major Indices

KCE (BUY)

Key takeaways from analyst meeting

P.3

▪ Weak 3Q17 was from high copper price, FX, and small disruptions. ▪ No significant changes in core operations. ▪ Expects recovering gross margin, subside pressures are catalysts. ▪ Our numbers are under reviewed.

Results Comment CPN (BUY) ICHI (SELL) PLANB (BUY)

▪ ▪ ▪

Stronger-than-expected 3Q17 results Weak 3Q17 results Strong 3Q17 results, slightly below our expectation

Dow Jones

23,563

6.1

0.0%

NASDAQ

6,789

21.3

0.3%

FTSE

7,530

16.6

0.2%

SHCOMP (China)

3,415

1.9

0.1%

28,908

-86.7

-0.3%

FTSSI (Singapore)

3,421

8.2

0.2%

KOSPI

2,552

7.0

0.3%

JCI (Indonesia)

6,049

-11.1

-0.2%

Hang Seng

P.4-9

MSCI Asia

159

0.2

0.1%

MSCI Asia x JP

703

-1.4

-0.2%

Currency /Bond data Dollar index Bt/US$

Close

∆

%∆

94.9

0.0

0.0%

33.1

0.0

-0.1%

113.9

-0.1

-0.1%

10Y bond yield (TH)

2.4

0.0

0.3%

10Y treasury yield (US)

2.3

0.0

0.9%

100JPY/US$

PTTGC (BUY)

▪

Strong 3Q17 result; ahead of expectation

Commodities

▪

Close

∆

%∆

SPCG (BUY)

3Q17: Good results and in line

NYMEX (US$/bbl)

56.8

-0.4

-0.7%

▪

BRENT (ICE) (US$/bbl)

63.5

-0.2

-0.3%

TVO (SELL)

Weak 3Q17 earnings

DUBAI (US$/bbl)

61.7

-0.2

-0.3%

Baltic Dry Index

1,486.0

9.0

0.6%

GRM (US$/bbl)

6.7

-0.4

-5.9%

Gold (US$/oz) Coal (Newcastle)*

1,283.7

7.9

0.6%

98.5

-0.3

-0.3%

(US$/tonne)* (US$ cent/lb)** HDPE-Naphtha

639.5

-19.8

Ethylene-Naphtha

639.5

-84.8 -11.7%

PX-Naphtha

264.5

-39.8 -13.1%

BZ-Naphtha

239.5

-24.8

-9.4%

Steel-HRC

609.0

-2.0

-0.3%

Rubber SICOM TSR20

1,438

-10.0

-0.7%

Rubber TOCOM

1,799

-10.3

-0.6%

Raw Sugar**

14.8

0.1

0.8%

White Sugar**

17.6

0.2

1.4%

Source: Thanachart , Bloomberg, Datastream,

Please note that due to the interest of timeliness, this product was not edited.

-3.0%

BUY

(Unchanged)

Change in Numbers

TP: Bt 70.00

9 NOVEMBER 2017

(Unchanged)

Upside : 46.6%

Total Access Comm. (DTAC TB) Unwarranted concerns DTAC’s approach is a cost/return optimization one so we don’t expect it to face auction-cost overruns. It is also confident in its partnership deal with TOT for the 2300MHz spectrum, which it expects to sign by 4Q17, so network capacity should not be an issue. DTAC remains a value play, in our view, with substantial 47% upside to our TP.

Thanachart Securities

Limited chance of auction cost overruns Preliminary details released last week by NBTC on 900MHz and 1800MHz auctions in 2018 are skewed toward expensive bids, raising cost overrun worries. DTAC’s share price is down 11% within a week. While bid details aren’t yet finalized, we see a small chance of DTAC facing cost issues. 1) DTAC is confident in its 2300MHz partnership deal with TOT. Learning from Advanced Info Service’s (ADVANC TB, Bt184.50, BUY) 2100MHz deal, DTAC is closing loopholes so it expects to ink the contract by 4Q17. 2) DTAC is preparing its network in case it has no 850MHz spectrum upon its 3Q18 concession expiry. Together with extra 2300MHz capacity, this means DTAC is not desperate to bid at any price. 3) With rising debt and heavy spectrum payments, we do not expect ADVANC and True Corp (TRUE TB, Bt5.65, SELL) to bid aggressively. Lastly, the possibility of new entrants looks slim as the Thai telecom market is mature with fierce competition.

Digitalizing the core to further save costs As has been the case with Telenor in other developed markets, DTAC is moving toward digitalization. After a major organizational restructuring in 2Q16, DTAC has been able to lower general administration expenses from 15.2% for service revenues to 13.9% in 4Q16 and 11.6% in 3Q17. We see room for this to come down further to meet its digitalization plan. An example of this is cutting the multilayer commission for prepaid card sales via the use of the DTAC One application for dealers. We also see the launch of Line mobile paving the way for it to move its entire platform to digital. This would enhance its EBITDA margin, which we assume will expand by 2.9pp over 2018-20F.

SARACHADA SORNSONG 662 – 617 4966 [email protected]

COMPANY VALUATION Y/E Dec (Bt m)

2016A

2017F

2018F

2019F

Sales

82,478

80,684

82,396

84,568

2,086

1,689

2,024

10,003 6,547

Net profit Consensus NP



1,931

1,259

Diff frm cons (%)



(12.5)

60.8

52.8

2,002

1,561

2,024

10,003

Prev. Norm profit



1,612

2,050

10,042

Chg frm prev (%)



(3.1)

(1.3)

(0.4)

0.8

0.7

0.9

4.2

(67.6)

(22.0)

29.7

394.1

56.5

72.4

55.8

11.3

EV/EBITDA (x)

5.3

4.4

5.8

5.3

P/BV (x)

4.2

4.0

3.7

3.0

Div yield (%)

0.9

0.0

0.0

4.4

Norm profit

Norm EPS (Bt) Norm EPS grw (%) Norm PE (x)

ROE (%) Net D/E (%)

7.4

5.6

6.9

29.3

113.7

68.9

176.6

135.2

PRICE PERFORMANCE (Bt/shr) 70 60 50 40 30 20 10 0 Nov-16

DTA C

Rel to SET In dex

(%) 80 60 40 20 0

Mar-17

Jul-17

(20) Nov-17

Recovery of underlying revenues DTAC’s weak reported service revenues in 3Q17 (down 1.5% y-y and 2.7% q-q) were due to a one-off adjustment of revenues for tourists’ prepaid SIMs and a hiccup related to stricter regulations on migrant workers. Excluding these, 9M17 underlying service revenues rose by 0.2% y-y, vs. 2% and 5% y-y drops in 2016 and 2015. Postpaid revenues have turned around. We see the challenge lying with prepaid where revenues continue to fall. So, DTAC is launching more attractive promotions (double the speed at similar prices) to slow down the drop in prepaid revenues.

A bargain, in our view; BUY for 47% upside We trim our earnings mainly to reflect softer international direct dialing revenues. We maintain our assumption of DTAC acquiring 15MHZ of the 1800MHz spectrum for Bt40bn in 4Q18. DTAC’s valuation looks like a bargain to us, trading at a 2018F EV/EBITDA of 5.8x, at a 40% discount to the sector and at 19% of its 5-year average. Reaffirm BUY and top sector pick.

COMPANY INFORMATION Price as of 8-Nov-17 (Bt)

47.75

Market Cap (US$ m)

3,413.9

Listed Shares (m shares)

2,367.8

Free Float (%)

29.4

Avg Daily Turnover (US$ m)

17.4

12M Price H/L (Bt) Sector Major Shareholder

58.75/32.50 Telecom Telenor Asia Pte Ltd 42.62%

Sources: Bloomberg, Company data, Thanachart estimates

Please see the important notice on the back page

THAILAND’s TOP LOCAL KNOWLEDGE

KCE Electronics Pcl

(KCE TB)

Thursday, November 09, 2017

- BUY

Analyst Meeting

Chak Reungsinpinya | Email: [email protected] Nuttapop Prasitsuksant, Assistant Analyst | Email: [email protected]

Key takeaways from analyst meeting

Key Valuations Y/E Dec (Bt m)

 

2016

2017F

2018F

2019F

Weak 3Q17 was from high copper price, FX, and small disruptions.

Revenue

13,797

14,649

16,770

19,644

No significant changes in core operations.

Net profit

3,039

2,787

3,391

4,473

Norm net profit

2,913

2,787

3,391

4,473



Expects recovering gross margin, subside pressures are catalysts.



Our numbers are under reviewed.

Norm EPS (Bt)

5.0

4.7

5.8

7.6

Norm EPS gr (%)

32.7

(4.3)

21.6

31.9

Norm PE (x)

We joined KCE’s analyst meeting yesterday where Mr. Pitharn Ongkosit, KCE’s

18.0

18.9

15.5

11.8

EV/EBITDA (x)

14.0

14.6

12.1

9.4

CEO attended the meeting to recap on the reasons behind the weak results in

P/BV (x)

5.3

4.6

4.0

3.3

3Q17 and share his view on future business outlook.

Div. yield (%)

2.3

2.7

3.2

4.3



Key pressures which resulted in weak earnings in 3Q17 were high copper foil

ROE (%)

32.3

26.0

27.5

30.9

price stocked since 2Q17 and strong baht. These were in-line with our view

Net D/E (%)

36.3

20.9

10.8

3.4

earlier. However, there was also an impact from the production disruption

Source: Thanachart estimates

due to two small fire incidents in June and July.

Stock Data

The disruption created a backlog since total output was lower than targeted.

Closing price (Bt)

89.50

The issue was short-term and completely solved. There will be no delayed

Target price (Bt)

116.00



delivery charges while replacement cost is covered by an insurance claim.



KCE expects a gradual improvement of its gross margin assuming stable

Market cap (US$ m)

1,585

Avg daily turnover (US$ m)

12.0

12M H/L price (Bt)

129.00/81.00

external factors; copper and copper foil prices, and FX.

-

Excluding external factors, KCE targets gross margin increases by 1.52.0% per year on continuously improved production efficiency, lower scrap rate, operating leverage, and better product mix.

-

Scrap rate of its HDI products (4% sales) remains high at around 12% in 3Q17 versus blended scrap rate of 5-6%. The most optimized product is the double-layer PCB, scrap rate under 3%. The CEO targets an HDI production to reach an optimized level by the next 6-9 months.

-

The company expects flat sales from double-layer PCBs next year while

Price Performance (Bt) 145 125 105 85 65 45 25 Nov-16

Kce Electronics Rel to SET Index

Mar-17

Jul-17

(%) 20 10 0 (10) (20) (30) (40) Nov-17

Source: Bloomberg

targets 10-12% growth in total US$ sales. Thus, the portion of highermargin products (6+ layers PCBs and HDI) would be higher.

-

KCE maintains the expansion plan of its Lad-Krabang plant to 1.7m sq.ft/month in 4Q17F and 2.0m in 2Q18F, from 1.5m in 2Q17. The expanded capacity is forecasted to be fully utilized by end-2018. Then, there will be another expansion phase in 2019F, and a new factory to be built around 2019-20F.

-

Subsided external pressures would boost gross margin recovery to a faster pace.



The company expects slightly lower US$ sales (from 3Q17) on seasonal effect, and a small recovery of gross margin in 4Q17F. The sales growth targeted for 2018F is supported by its capacity expansion.

We see a downside to our current numbers due to a company’s guidance of only small improvements in 4Q17F while 9M17’s profits were only 70% of our full-year forecast. We then put our earnings forecast under reviewed.

THANACHART SECURITIES

3

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 2017

Central Pattana Pcl (CPN TB) - BUY, Price Bt83.00, TP Bt90.00

Results Comment

Phannarai Tiyapittayarut | Email: [email protected]

Stronger-than-expected 3Q17 results

▪

▪ ▪

▪

CPN reported 3Q17 net profit of Bt5.98bn, up 155% y-y and 141% q-q, driven by Bt3.5bn insurance claim received under the terrorism protection policy regarding the fire incident at CentralWorld.

Average occupancy rate at 30 existing malls stood at 91%, dropped slightly from 92% in 2Q17.

▪

Rental income growth was 2% y-y, despite renovations at CentralWorld and Rama 3, on a 3.3% same-store rent growth and revenues from new mall opened last year in Nakhon Si Thammarat and CentralMarina mall resumed full operations after renovation.

Excluding extra gain, 3Q17 normalized profit beats our and market expectation to Bt2.48bn, up 6% y-y and flat q-q, due to a significant jump in other income to Bt604m.

▪ ▪

Due to major renovations at CentralWorld and Rama 3 shopping malls, operating profit fell by 2% y-y and 5% q-q (lower occupancy rate caused by renovations and falling gross margin on rental income to 49.4% in 3Q17 vs 50.2% in 3Q16 and 51.1% in 2Q17) and equity income declined by 8% y-y to Bt201m on lower profit contribution from CPNRF.

(consolidated)

Incom e Statem ent Yr-end Dec (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA

3Q16

4Q16

1Q17

2Q17

3Q17

6,930

7,100

7,205

7,167

7,103

3,419

3,461

3,745

3,589

3,442

1,091

1,329

1,054

1,197

1,160

2,328

2,132

2,691

2,392

2,282

3,322

3,198

3,725

3,965

3,618

397

390

524

455

604

Other income Other expense Interest expense Profit before tax

0

0

0

0

0

Gross profit SG&A Operating profit EBITDA Other income

9M as q-q% (1)

y-y% 2

% 2017F 72

2017F 29,959

2018F 35,248 18,312

(4)

1

73

14,749

(3)

6

72

4,734

5,463

(5)

(2)

74

10,015

12,849

(9)

9

81

14,024

17,350

33

52

97

1,636

1,733

na

0

0

68

441

450

Other expense 1

9

77

11,210

14,132

481

Income tax

9

15

76

1,906

2,402

200

201

Equity & invest. income

1

(8)

72

866

1,072

(29)

(30)

(26)

Minority interests

na

na

80

(108)

(74)

0 2,219

0 2,776

0 2,483

3,500 5,983

100

3,500

560

83

13,562

13,288

2,219

2,776

2,483

2,483

132

110

93

97

2,390

3,106

2,755

2,789

Income tax

419

358

519

441

Equity & invest. income

219

214

219

Minority interests

(26)

(27)

Net profit

0 2,342

Norm alized profit

2,342 0.52

Incom e Statem ent (Bt m ) Revenue

Interest expense Profit before tax

155

EPS (Bt) Normalized EPS (Bt)

Reiterate BUY as a top pick in retail sector and one of our top country pick.

5

2,570

Extraordinary items

9M17 normalized profit came to 77% of our full-year forecast.

0.49

0.62

0.55

1.33 0.55

(37)

Extraordinary items Net profit Norm alized profit EPS (Bt) Normalized EPS (Bt)

141 (0) 141 (0)

155 6

77

10,062

12,728

155

83

3.02

2.96

6

77

2.24

2.84

3Q17

0.52

0.49

0.62

0.55

Yr-end Dec (Bt m )

3Q16

4Q16

1Q17

2Q17

3Q17

(%)

3Q16

4Q16

1Q17

2Q17

Cash & equivalent

3,118

3,204

3,328

2,205

2,013

Sales grow th

14.1

7.5

5.9

5.4

2.5

A/C receivable

1,095

1,102

1,260

1,239

1,194

Operating profit grow th

24.7

21.9

12.0

2.9

(2.0) 8.9

(consolidated)

Balance Sheet

Inventory

Financial Ratios

0

0

0

0

0

EBITDA grow th

21.5

18.5

10.5

20.2

Other current assets

2,246

2,353

2,014

3,105

4,072

Norm profit grow th

29.0

16.1

16.2

8.3

6.0

Investment

6,087

6,156

6,359

6,795

7,384

Norm EPS grow th

29.0

16.1

16.2

8.3

6.0

Fixed assets

87,780

89,145

89,611

91,182

82,809

Other assets

2,115

2,568

2,634

4,102

14,883

102,441

104,527

105,205

108,628

112,354

6,741

5,390

3,117

8,886

8,153

Total assets S-T debt A/C payable

5,662

825

861

863

892

Other current liabilities

2,542

8,663

9,085

8,596

8,705

L-T debt

13,595

13,197

12,523

11,890

9,829

Other liabilities

23,139

23,447

23,812

23,733

24,034

941

968

997

1,091

1,192

Shareholders' equity

Minority interest

49,821

52,037

54,810

53,568

59,549

Working capital

(4,567)

277

399

376

302

Total debt

20,336

18,587

15,640

20,776

17,982

Net debt

17,219

15,383

12,312

18,572

15,969

Gross margin

49.3

48.7

52.0

50.1

48.5

Operating margin

33.6

30.0

37.4

33.4

32.1

EBITDA margin

47.9

45.0

51.7

55.3

50.9

Norm net margin

33.8

31.2

38.5

34.6

35.0

D/E (x)

0.4

0.4

0.3

0.4

0.3

Net D/E (x)

0.3

0.3

0.2

0.3

0.3

Interest coverage (x)

21

24

34

43

37

Interest rate

3.0

2.7

2.6

2.0

2.0

16.3

15.0

16.7

16.0

17.2

9.8

9.1

11.0

9.7

9.3

19.3

17.4

20.8

18.3

17.6

Effective tax rate ROA ROE

So urces: Co mpany data, Thanachart estimates

THANACHART SECURITIES

4

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 2017

Ichitan Group Pcl (ICHI TB) - SELL, Price Bt8.45, TP Bt8.80

Results Comment

Kalvalee Thongsomaung | Email: [email protected]

Weak 3Q17 results

▪ ▪

▪

▪

ICHI reported normalized profit of Bt69m in 3Q17 vs. Bt70m in 2Q17 vs. Bt32m in 3Q16. The 3Q17 earnings results were below our expectation.

ICHI’s SG&A to sales ratio was at 16.2% in 3Q17 vs. 14.8% in 2Q17 and 13.7% in 3Q16. The increasing ratios were due to higher marketing expenses for local campaign.

▪

ICHI’s 3Q17 revenue increased 31% y-y. The higher sale was mainly due to an increase in export sale while its domestic sale was negatively impacted by the sluggish consumption and tough competition.

ICHI’s equity income booked Bt18m loss in 3Q17 vs. Bt39m loss in 2Q17 vs. Bt12m loss in 3Q16 due to a higher loss contribution from its Indonesia project given high SG&A expenses.

▪

We still expect ICHI’s earnings visibility to be negatively affected by tough competition and changes in regulation, we maintain our SELL rating.

3Q17 gross margin improved to 23.9%, due mainly to a higher export portion at 30% of total revenue.

(consolidated)

Incom e Statem ent Yr-end Dec (Bt m ) Revenue

3Q16

4Q16

1Q17

2Q17

3Q17

1,110

1,039

1,488

1,439

1,456

217

176

353

329

348

Gross profit SG&A

Incom e Statem ent (Bt m ) Revenue Gross profit SG&A

153

232

246

214

236

65

(56)

107

115

112

195

630

236

245

242

Other income

2

12

4

9

2

Other income

Other expense

0

0

0

0

0

Other expense

18

18

18

16

16

48

(63)

93

108

99

Interest expense Profit before tax

4

(69)

(14)

(1)

11

Operating profit EBITDA

Interest expense Profit before tax Income tax Equity & invest. income

(12)

(61)

(44)

(39)

0

0

0

0

0

Net profit

0 32

0 (55)

0 62

21 90

0 69

Norm alized profit

32

(55)

62

70

69

0.02

(0.04)

0.05

0.07

0.05

0.02

(0.04)

0.05

0.05

0.05

3Q16

4Q16

1Q17

2Q17

3Q17

Cash & equivalent

103

34

132

139

A/C receivable

882

875

1,055

Inventory

640

514

53

38

Minority interests Extraordinary items

EPS (Bt) Normalized EPS (Bt)

(consolidated)

Balance Sheet Yr-end Dec (Bt m )

Other current assets Investment Fixed assets

6

60

62

1,667

1,677

11

55

76

921

947

(3)

73

45

746

729

(1)

25

56

1,283

1,304

(74)

26

86

17

24

(4)

(15)

58

86

90

(8)

105

44

677

663

Income tax

na

180

47

46

Equity & invest. income

na

na

172

(59)

(33)

(23)

117

39

571

583

(1)

117

35

571

583

(23)

117

39

0.44

0.45

(1)

117

35

0.44

0.45

3Q17

(7)

Minority interests Extraordinary items Net profit Norm alized profit EPS (Bt) Normalized EPS (Bt) Financial Ratios 4Q16

1Q17

2Q17

(9.2)

(10.6)

(12.0)

(3.9)

31.1

739

804

Operating profit grow th

(63.6)

(33.5)

73.0

532

656

600

45

81

81

0

0

0

0

6,383

6,886

6,844

(56.0)

na

EBITDA grow th

(28.8)

155.7

(43.8)

(18.4)

24.6

Norm profit grow th

(72.8)

na

(75.0)

(50.9)

117.0

Norm EPS grow th

(72.8)

na

(75.0)

(50.9)

117.0 23.9

368

667

657

243

349

8,509

8,627

8,805

8,744

8,787

Operating margin

774

1,238

1,078

989

1,233

EBITDA margin

A/C payable

374

257

604

540

466

361

312

371

524

510

1,174

1,043

912

759

584

25

26

27

28

29

0

0

0

0

0

Shareholders' equity

5,801

5,751

5,813

5,903

5,964

Working capital

1,148

1,132

983

855

939

Total debt

1,948

2,280

1,989

1,748

1,817

Net debt

1,845

2,247

1,857

1,609

1,710

Minority interest

2018F 6,242

3Q16

6,500

Other liabilities

2017F 5,740

Sales grow th

Other current liabilities L-T debt

% 2017F 76

108

0

S-T debt

y-y% 31

(%)

6,464

Other assets Total assets

(18)

Operating profit EBITDA

9M as q-q% 1

Gross margin

Norm net margin

19.6

16.9

23.7

22.9

5.8

(5.4)

7.2

8.0

7.7

17.5

60.6

15.9

17.0

16.7

2.9

(5.3)

4.2

4.8

4.8

D/E (x)

0.3

0.4

0.3

0.3

0.3

Net D/E (x)

0.3

0.4

0.3

0.3

0.3 15.6

10.6

34.3

13.1

15.1

Interest rate

3.9

3.5

3.4

3.5

3.5

Effective tax rate

8.4

109.8

(14.6)

(1.2)

11.5

ROA ROE

1.5

(2.6)

2.9

3.2

3.2

2.1

(3.8)

4.3

4.8

4.7

Interest coverage (x)

So urces: Co mpany data, Thanachart estimates

THANACHART SECURITIES

5

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 2017

Plan B Media (PLANB TB) - BUY, Price Bt6.90, TP Bt7.30

Results Comment

Kalvalee Thongsomaung | Email: [email protected]

Strong 3Q17 results, slightly below our expectation

▪

▪ ▪

▪

PLANB reported 3Q17 profit of Bt150m, up 12% y-y and 24% q-q. The increases were due to higher utilization, media expansion, and higher revenue from its sports marketing business.

▪

3Q17 outdoor static media revenue of Bt209m (27% of total revenues) was up 22% y-y and 15% q-q. The increases were mainly due to higher utilization.

3Q16

4Q16

1Q17

2Q17

3Q17

651

611

684

734

788

242

182

217

265

300

Gross profit SG&A

3Q17 media revenue from sports marketing (a new source of income) was at Bt34m (4% of total revenues).

▪

(consolidated)

Incom e Statem ent

3Q17 airport media revenue of Bt34m (4% of total revenues) was up 124% y-y but down 7% q-q.

▪

3Q17 digital outdoor media revenue of Bt347m (44% of total revenues) was up by 18% y-y and 11% q-q. The increases were due to higher utilization and a capacity expansion of billboards in Bangkok and the provinces.

Yr-end Dec (Bt m ) Revenue

3Q17 transit media revenue of Bt121m (15% of total revenues) was up 15% y-y but down 15% q-q.

We reaffirm our BUY rating on PLANB’s business expansion and improving performance.

Incom e Statem ent (Bt m ) Revenue Gross profit SG&A

87

103

110

116

124

155

80

107

150

176

275

187

217

258

289

Other income

6

8

9

6

7

Other income

Other expense

0

0

0

0

0

Other expense Interest expense Profit before tax

Operating profit EBITDA

Interest expense Profit before tax Income tax Equity & invest. income

0

0

1

0

0

161

87

115

155

183

26

4

13

30

31

1

Minority interests

1

2

1

2

Operating profit EBITDA

Income tax

9M as q-q% 7

y-y% 21

% 2017F 78

2017F 2,827

2018F 3,412

13

24

7

43

74

1,051

1,328

78

449

18

14

72

601

454 875

12

5

67

1,137

1,497

19

7

94

23

27

1

65

58

3

(1)

18

13

73

621

903 181

2

16

69

106

Equity & invest. income

60

53

na

0

0

Minority interests

na

na

111

(10)

(12)

Net profit

24

23

74

505

710

Norm alized profit

24

12

74

505

710

24

22

73

0.14

0.20

24

12

73

0.14

0.20

(%)

(2)

(4)

(3)

(5)

(4)

Net profit

(12) 122

(21) 58

0 101

0 121

0 150

Norm alized profit

134

79

101

121

150

0.03

0.02

0.03

0.03

0.04

0.04

0.02

0.03

0.03

0.04

3Q16

4Q16

1Q17

2Q17

3Q17

3Q16

4Q16

1Q17

2Q17

3Q17

Cash & equivalent

568

344

420

442

529

Sales grow th

13.9

0.5

23.5

21.0

21.0

A/C receivable

802

761

945

908

924

Operating profit grow th

14.7

(40.7)

39.2

24.5

13.5

Inventory

436

429

527

571

635

EBITDA grow th

19.6

(20.7)

16.9

12.9

5.2

74

50

50

48

53

Norm profit grow th

21.3

(24.3)

67.0

9.4

12.1

Norm EPS grow th

20.9

(24.6)

66.6

9.1

11.8 38.1

Extraordinary items

EPS (Bt) Normalized EPS (Bt)

(consolidated)

Balance Sheet Yr-end Dec (Bt m )

Other current assets Investment Fixed assets

10

18

18

18

18

1,265

1,506

1,476

1,430

1,414

Other assets Total assets

535

565

524

499

485

3,690

3,673

3,960

3,916

4,058

9

10

18

16

14

S-T debt A/C payable

458

335

487

425

426

Other current liabilities

135

120

146

159

146

17

25

15

14

15

L-T debt Other liabilities

7

7

7

8

8

37

41

44

49

52

3,028

3,135

3,244

3,245

Minority interest Shareholders' equity Working capital

Extraordinary items

EPS (Bt) Normalized EPS (Bt) Financial Ratios

Gross margin

37.2

29.8

31.7

36.1

Operating margin

23.9

13.0

15.6

20.4

22.4

EBITDA margin

42.2

30.6

31.8

35.1

36.7

Norm net margin

20.6

12.9

14.8

16.5

19.1

D/E (x) Net D/E (x)

0.0

0.0

0.0

0.0

0.0

(0.2)

(0.1)

(0.1)

(0.1)

(0.1)

Interest coverage (x)

na

na

na

na

na

3,396

Interest rate

8.5

4.1

7.1

6.2

6.7

Effective tax rate

16.3

5.1

10.9

19.5

16.8

ROA ROE

15.0

8.6

10.6

12.3

15.1

18.1

10.3

12.7

14.9

18.1

780

855

985

1,054

1,133

Total debt

26

35

33

30

29

Net debt

(543)

(309)

(388)

(413)

(500)

So urces: Co mpany data, Thanachart estimates

THANACHART SECURITIES

6

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 2017

PTT Global Chemical (PTTGC TB) - BUY, Price Bt80.25, TP Bt98.00 Results Comment Chak Reungsinpinya | Email: [email protected]

Strong 3Q17 result; ahead of expectation

▪

▪

▪

PTTGC reports 3Q17 net profit of Bt9.96bn (EPS Bt2.23/sh). Excluding inventory and FX gains, we estimate normalized net profit to be Bt8.99bn (norm EPS Bt2.02/sh), up 63% y-y and 26% q-q. The result was stronger than expected, and we potential upside risks to our numbers. Maintain BUY.

improved to 82% in 3Q17 from 66% in the previous quarter. Aromatics made up 7% of adjusted EBITDA.

▪

Refining: Market GRM (on crude distillation) was $9.05/bbl. This was surprisingly strong especially considering PTTGC’s refining margin has rarely outperformed the Singapore benchmark (which averaged $8.3/bbl in 3Q17). Refining makes up 25% of adjusted EBITDA.

▪

Aromatics: Adjusted EBITDA for aromatics declined 17% y-y (volume impact) and 27% q-q (margin impact). Market productto-feed (P2F) declined to $185/ton from $212/ton in 2Q17 but higher than $181/ton in 3Q last year. This was in line with market movements in PX and BZ spreads. Utilization rate

Gross profit SG&A Operating profit EBITDA

3Q16

4Q16

1Q17

2Q17

3Q17

92,263

108,980

108,042

101,660

105,344

9,554

16,543

16,297

9,240

14,051

3,046

3,343

2,955

2,887

3,584

6,508

13,200

13,342

6,354

10,467

11,000

17,740

18,348

11,197

15,320

1,859

(1,459)

1,968

922

955

0

0

0

0

0

Interest expense Profit before tax

1,046

1,016

1,001

973

985

7,321

10,725

14,309

6,303

10,436

Income tax

1,052

970

1,597

(33)

1,233

Equity & invest. income

1,007

(792)

538

360

875

(1,050)

782

(68)

(93)

(123)

Net profit

710 6,226

271 9,744

1,638 13,182

(547) 6,603

777 9,955

Norm alized profit

5,516

9,474

11,544

7,150

9,178

1.40

2.18

2.96

1.48

2.23

1.24

2.12

2.59

1.60

2.06

3Q16

4Q16

1Q17

2Q17

3Q17

Cash & equivalent

41,654

32,720

28,775

39,049

A/C receivable

30,357

37,752

34,240

Inventory

36,459

38,358

Other income Other expense

Minority interests Extraordinary items

EPS (Bt) Normalized EPS (Bt)

Other current assets

Non-operating items: PTTGC recorded the following in pretax gains: Bt963m in inventory gain, Bt5m in hedging gain and Bt239m in FX gain.

Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA Other income

9M as q-q% 4

y-y% 14

% 2017F 78

2017F 406,458

2018F 435,015

52

47

79

49,859

51,799

24

18

77

12,194

12,615

65

61

80

37,665

39,184

37

39

79

56,503

60,108

4

(49)

176

2,185

2,104

na

0

0

(6)

81

3,668

3,407

Other expense 1

Interest expense Profit before tax

66

43

86

36,183

37,881

Income tax

na

17

77

3,618

3,788

143

(13)

77

2,300

3,800

Minority interests

na

na

102

(280)

(293)

Extraordinary items

na

9

na

0

0

Net profit

51

60

86

34,584

37,599

Norm alized profit

28

66

81

34,584

37,599

51

60

86

7.75

8.43

28

66

81

7.75

8.43

(%)

3Q16

4Q16

1Q17

2Q17

3Q17

32,870

Sales grow th

(2.3)

12.5

32.6

53.1

14.2

30,850

35,133

Operating profit grow th

89.3

183.6

163.6

11.9

60.8

39,373

37,455

38,229

EBITDA grow th

44.5

99.1

99.7

14.0

39.3

(consolidated)

Balance Sheet Yr-end Dec (Bt m )

Equity income: PTTGC started consolidating 6 companies it purchased from PTT beginning 3 Jul 2017. Net equity income jumped to Bt875m in 3Q17.

▪

(consolidated)

Incom e Statem ent Yr-end Dec (Bt m ) Revenue

Olefins: Olefin adjusted EBITDA increased 12% both y-y and q-q. This was mainly due to higher utilization rates: 3Q17 utilization rebounded to 96% from 89% in 2Q17 (planned turnaround) and 92% in 3Q16 (unplanned outage). Product prices were roughly unchanged y-y and q-q except for MEG which showed 29% increase y-y due to better spread. Olefin made up 59% of adjusted EBITDA.

Equity & invest. income

EPS (Bt) Normalized EPS (Bt) Financial Ratios

4,812

20,338

31,878

21,225

16,135

Norm profit grow th

356.9

102.0

163.2

130.8

66.4

22,995

39,311

23,720

23,662

42,570

Norm EPS grow th

361.7

104.1

163.2

130.8

66.4

Fixed assets

221,660

223,992

219,450

218,895

222,240

Other assets

18,627

21,042

22,956

23,373

32,385

10.4

15.2

15.1

9.1

13.3

376,563

413,513

400,392

394,509

419,561

7.1

12.1

12.3

6.2

9.9

10,692

11,450

14,051

11,978

13,019

EBITDA margin

11.9

16.3

17.0

11.0

14.5

Norm net margin

6.0

8.7

10.7

7.0

8.7

Investment

Total assets S-T debt A/C payable

23,774

28,426

25,630

22,317

28,673

Other current liabilities

11,761

14,593

12,333

11,161

13,420

L-T debt

85,250

85,665

34,325

80,680

88,354

Gross margin Operating margin

D/E (x)

0.4

0.4

0.2

0.4

0.4

0.2

0.3

0.1

0.2

0.3

Other liabilities

6,577

6,365

52,571

6,250

6,559

Net D/E (x)

Minority interest

2,493

20,998

2,698

5,253

5,460

Interest coverage (x)

11

17

18

12

16

236,016

246,016

258,784

256,870

264,076

Interest rate

4.5

4.2

5.5

5.5

4.1

Working capital

43,041

47,684

47,984

45,988

44,688

14.4

9.0

11.2

(0.5)

11.8

Total debt

95,941

97,115

48,375

92,658

101,373

5.9

9.6

11.3

7.2

9.0

Net debt

54,288

64,395

19,601

53,609

68,503

9.4

15.7

18.3

11.1

14.1

Shareholders' equity

Effective tax rate ROA ROE

So urces: Co mpany data, Thanachart estimates

THANACHART SECURITIES

7

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 2017

SPCG Public Co Ltd (SPCG TB) - BUY, Price Bt23.90, TP Bt25.00

Results Comment

Supanna Suwankird | Email: [email protected]

3Q17: Good results and in line

▪

▪

▪

▪

SPCG’s 3Q17 net earnings came in at Bt545m. Excluding gain on asset divestment, its norm earnings would be Bt537m, up 9% y-y due to falling interest expenses but down 5% q-q due to seasonality (3Q is rainy season). For business breakdown, SPCG’s solar power business saw improved operation, despite y-y declined in power output and contracted tariff caused by falling Ft. Thanks to the fall in interest expense due to significant debt repayment.

9M17 norm earnings made up 71% of our full year estimate. We maintain our estimate as is. We expect its solar power business in 4Q17 to resume normal level given strong radiation in 4Q. Also, we expect continued increasing solar rooftop installation demand going forward.

▪

SPCG’s share price has risen 15% in the past three months and come closed to our TP of Bt25.0. We are putting our recommendation under review.

SPCG’s trading and installation of solar rooftop business also improved. Operating margin rose to 7.9% (from 3.8% in 3Q16), we believe due to its lower cost of solar panels. Also, interest expenses fell y-y.

(consolidated)

Incom e Statem ent Yr-end Dec (Bt m ) Revenue

3Q16

4Q16

1Q17

2Q17

3Q17

1,227

1,793

1,268

1,249

1,212

802

920

944

876

824

Gross profit SG&A Operating profit EBITDA Other income

55

71

63

74

67

747

850

880

802

757

909

1,012

1,038

960

921

6

8

7

13

13

Other expense

Incom e Statem ent (Bt m ) Revenue Gross profit SG&A Operating profit EBITDA Other income

9M as q-q% (3)

Income tax Equity & invest. income

189

176

157

158

153

564

681

730

658

617

2

11

0

14

14

70

3,762

57

359

368

(6)

1

72

3,404

3,440

(4)

1

70

4,183

4,219

(1)

130

134

24

49

na

Interest expense Profit before tax

(3)

(19)

71

658

556

(6)

9

72

2,770

2,933

Income tax

(0)

730

0

(0)

0

(78)

(81)

(77)

(66)

Minority interests

Extraordinary items

37 630

27 675

15 581

7 545

Extraordinary items

Net profit

9 503

Norm alized profit

495

593

648

567

537

0.54

0.68

0.73

0.63

0.59

0.54

0.64

0.70

0.61

0.58

Yr-end Dec (Bt m )

3Q16

4Q16

1Q17

2Q17

3Q17

(%)

3Q16

Cash & equivalent

4,357

3,360

3,469

2,210

2,171

Sales grow th

10.1

A/C receivable

966

856

878

792

1,112

Operating profit grow th

Inventory

445

581

764

717

925

EBITDA grow th

Other current assets

188

223

276

392

168

Other assets Total assets S-T debt

17,899

17,589

17,477

1,471

1,469

2,027

2,473

2,266

24,232

25,004

24,061

24,303

2,477

2,706

2,708

2,946

2,950

378

816

838

432

748

Other current liabilities

254

307

231

200

99

13,081

10,615

10,699

10,032

10,034

Other liabilities

na

na

71

(49)

(14)

na

(317)

(331)

Net profit

(6)

8

Norm alized profit

(5)

9

73

2,453

2,593

71

2,453

(6)

2,593

8

73

2.65

(5)

2.81

9

71

2.65

2.81

4Q16

1Q17

2Q17

3Q17

39.3

3.7

3.5

(1.2)

(0.6)

12.6

0.5

(0.3)

1.4

(0.3)

10.6

0.2

(0.5)

1.3

Norm profit grow th

4.6

24.2

6.7

3.4

8.6

Norm EPS grow th

4.6

24.2

6.7

3.4

8.6

EPS (Bt) Normalized EPS (Bt) Financial Ratios

Gross margin

65.3

51.3

74.4

70.2

68.0

Operating margin

60.8

47.4

69.5

64.2

62.5

EBITDA margin

74.0

56.4

81.9

76.9

76.0

Norm net margin

40.3

33.1

51.1

45.4

44.3

D/E (x)

1.7

1.4

1.3

1.2

1.2

Net D/E (x)

1.2

1.0

0.9

1.0

1.0

29

23

19

18

18

Minority interest

1,422

1,471

1,553

1,547

1,456

Interest coverage (x)

Shareholders' equity

7,684

8,295

8,956

8,888

8,998

Interest rate

Working capital

9

17,660

25,326

A/C payable L-T debt

17,744

na na

(0)

Investment

3,807

3

Equity & invest. income

(consolidated)

2018F 5,170

22

(67)

Balance Sheet

2017F 5,136

(6)

Minority interests

EPS (Bt) Normalized EPS (Bt)

% 2017F 73

(9)

Other expense

Interest expense Profit before tax

Fixed assets

y-y% (1)

1,034

621

804

1,078

1,290

Total debt

15,559

13,320

13,407

12,977

12,983

Net debt

11,202

9,961

9,937

10,767

10,813

5

6

7

6

6

4.9

4.9

4.7

4.8

4.7

Effective tax rate

0.3

1.6

0.0

2.1

2.3

ROA ROE

7.9

9.6

10.5

9.2

8.9

25.9

29.7

30.0

25.4

24.0

So urces: Co mpany data, Thanachart estimates

THANACHART SECURITIES

8

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 2017

Thai Vegetable Oil Pcl (TVO TB) - SELL, Price Bt27.25, TP Bt21.00

Results Comment

Siriporn Arunothai | Email: [email protected]

Weak 3Q17 earnings

▪ ▪

▪

▪

TVO reported net profit of Bt343m in 3Q17, down 68% y-y but up 65% q-q. Weak y-y earnings growth resulted from weak sales volumes and falling selling prices both in soybean meal and soybean oil products. This caused its sales falling by 19% y-y to Bt6.1bn in 3Q17. Gross margin also dropped from 20.2% in 3Q16 to 10.3% in 3Q17 due to declining soybean meal-soybean spread and soybean oil-soybean spread.

▪

According to Bloomberg data, average soybean meal price declined by 12% y-y but up 2% q-q to US$342/tonne in 3Q17 and average soybean oil price upped by 8% y-y and 9% q-q to US$1,216/tonne. Meanwhile, average soybean price in 3Q17 declined by 6% y-y and up 3% to US$347/tonne. With lower-than-expected earnings in 9M17 and unexciting earnings in 4Q17F, we maintain our SELL recommendation on TVO.

Meanwhile, q-q earnings growth resulted from improving gross margin from 8% in 2Q17 to 10.3% in 3Q17 due to benefit from low-cost inventory and falling SG&A to sales expense ratio from 5.2% in 2Q17 to 4.9% in 3Q17.

(consolidated)

Incom e Statem ent Yr-end Dec (Bt m ) Revenue Gross profit SG&A

3Q16

4Q16

1Q17

2Q17

3Q17

7,515

7,070

6,091

6,222

6,105

1,519

891

623

501

626

Incom e Statem ent (Bt m ) Revenue

9M as q-q% (2)

y-y% (19)

25

(59)

(8)

8

86

Gross profit SG&A

% 2017F 64

2017F 28,607

2018F 29,261

54

3,267

3,241

69

1,351

1,346

(74)

43

1,915

1,895

59

(69)

47

2,257

2,236

67

212

165

91

93

0

0

280

395

305

327

302

1,239

496

318

174

324

1,322

581

403

255

404

27

16

15

50

84

Other expense

0

0

0

0

0

Other expense

Interest expense Profit before tax

1

1

1

1

1

0

9

217

1

3

1,265

511

332

223

408

Interest expense Profit before tax

82

(68)

48

2,005

1,985

184

72

44

29

48

Income tax

66

(74)

41

301

318

Operating profit EBITDA Other income

Income tax Equity & invest. income Minority interests

0

0

0

0

0

Operating profit EBITDA Other income

Equity & invest. income

(16)

(18)

(14)

(12)

(10)

Minority interests

9 430

(10) 263

25 208

(7) 343

Extraordinary items

Net profit

(9) 1,056

Norm alized profit

1,065

421

274

183

349

1.31

0.53

0.33

0.26

0.42

1.32

0.52

0.34

0.23

0.43

3Q16

4Q16

1Q17

2Q17

3Q17

229

296

324

288

267

Extraordinary items

EPS (Bt) Normalized EPS (Bt)

(consolidated)

Balance Sheet Yr-end Dec (Bt m ) Cash & equivalent

na

na

0

0

51

(70)

(77)

na

na

0

0

Net profit

65

(68)

50

1,634

1,590

Norm alized profit

91

(67)

49

1,634

1,590

65

(68)

50

2.02

1.97

91

(67)

49

2.02

1.97

(%)

3Q16

4Q16

1Q17

2Q17

3Q17

Sales grow th

17.7

5.4

(12.6)

(7.0)

(18.8) (73.8)

EPS (Bt) Normalized EPS (Bt) Financial Ratios

A/C receivable

1,425

1,464

1,399

1,288

1,213

Operating profit grow th

139.8

85.9

(37.7)

(81.4)

Inventory

6,079

5,785

7,041

6,563

6,279

EBITDA grow th

119.4

64.7

(32.1)

(75.0)

(69)

Other current assets

2,435

905

2,399

684

1,310

Norm profit grow th

164.2

69.1

(38.4)

(77.4)

(67.2)

Norm EPS grow th

164.2

69.1

(38.4)

(77.4)

(67.2)

Gross margin

20.2

12.6

10.2

8.0

10.3

Operating margin

16.5

7.0

5.2

2.8

5.3

EBITDA margin

17.6

8.2

6.6

4.1

6.6

Norm net margin

14.2

6.0

4.5

2.9

5.7

Investment Fixed assets

72

72

74

73

73

2,132

2,492

2,453

2,457

2,517

Other assets Total assets

75

69

72

64

65

12,446

11,083

13,761

11,416

11,725

0

0

0

0

0

3,507

1,705

3,567

1,578

2,495

372

357

893

1,558

1,079

0

0

0

0

0

S-T debt A/C payable Other current liabilities L-T debt Other liabilities

D/E (x)

-

-

-

-

-

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

83

105

107

110

112

Net D/E (x)

355

373

388

368

363

Interest coverage (x)

Shareholders' equity

8,129

8,543

8,807

7,802

7,675

Interest rate

Working capital

3,996

5,545

4,873

6,272

4,997

Minority interest

Total debt

0

0

0

0

0

Net debt

(229)

(296)

(324)

(288)

(267)

1,459

683.8

436.3

257.1

na

na

na

na

407.8 na

Effective tax rate

14.6

14.0

13.3

13.1

11.9

ROA ROE

37.3

14.3

8.8

5.8

12.1

52.6

20.2

12.6

8.8

18.1

So urces: Co mpany data, Thanachart estimates

THANACHART SECURITIES

9

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 2017

NEWS CLIPPING 

PM slammed for six questions : Politicians and academics say 'dangerous'move indicates ncpo's

The Nation

intention to cling to power and legitimise undemocratic rule. Prime minister general Prayut Chan-o-cha's latest efforts to survey people's thoughts on politics with six controversial questions appeared to be an attempt not only to set a political agenda but also to legitimise the junta's rule despite it being undemocratic, politicians and academics have concluded. 

NBTC board unsure over auction draft : The National Broadcasting and Telecommunications

Bangkok Post

Commission (NBTC) plans to ask the Council of State to carry on with a hearing for the auction draft for the 1800- and 850-megahertz spectrum in December if new NBTC officers are not appointed. 

KBank plans major push to strengthen digital platform : Kasikornbank plans to invest Bt4 billion to

The Nation

Bt5 billion to enlarge and strengthen its digital banking platform next year,the bank's executives said. 

Ambitious Sansiri spreads its wings : Property firm diversifies bt2.8 bn investments in five related

The Nation

fields. Listed property firm Sansiri Plc is investing more than Bt2.8 billion to take stakes in five global firms in the hospitality, co-working space,rental management and indoor farm businesses. The firm also signed a memorandum of understanding to buy 53 condominium units of Ritz-Carlton Residences Bangkok in the MahaNakhon building and Nimit Lang Suan project from listed property firm Pace Development Corporation Plc. 

Pace to sell B14.5bn in assets : Developer seeks relief by unloading projects. In the latest effort to

Bangkok Post

tackle its massive debt, embattled Pace Development Corporation Plc plans to raise funds through recapitalisation and the sale of two residential projects whose acquisition value could be 14.5 billion baht.

THANACHART SECURITIES

10

THAILAND’s TOP LOCAL KNOWLEDGE

Market data

Thursday, November 09, 2017

Close

∆

%∆

SET Index

1,714.7

1.9

0.1%

SET50 Index

1,089.0

1.1

0.1%

BCPG

PTTEP

0.1%

PT TGC

DTAC

SET100 Index

2,455.2

MAI Index

2.2

PRICE CHANGE - MOST ACTIVE Change 1 Day (%)

Change 1 Week (%)

SCB

IVL

IVL

PT TGC

CPALL

MINT

567.2

-4.5

-0.8%

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 (%)

2.44

2.43

2.48

Treasury Yield – 10Y (%)

2.31

2.36

2.19

Policy Rate (%)

1.50

1.50

1.50

VIX Index

9.89

10.33

TED Spread (%)

0.20

0.29

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

13x

1,500

9x

1,000

6x

2016

2014

2012

2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

0

2018F

500

SET PE Discount to MSCI Asia x JP (x) 10 8

+2 STD = 6.1x

6

+1 STD = 3.4x

4 2

-1 STD = -2.2x

(4)

-2 STD = -5x

(6) Jul-06

Source: Bloomberg

Jan-10

Change 1 Week (%)

PETRO

PETRO

PROP

ENERG

BANK

AUTO

ENERG

PROP

SET

MEDIA

AUTO

TRANS

TRANS

SET

HELTH

BANK

COMM

COMM

FOOD

FOOD

ICT

HELTH

MEDIA

CONMAT

CONMAT

ETRON

(2.0)

(2)

(8) Jan-03

Change 1 Day (%)

ICT

ETRON

Average = 0.6x

0

SECTOR CHANGE

Jul-13

Jan-17

(1.0)

0.0

1.0

2.0

Change 1 Month (%)

(6.0) (4.0) (2.0) 0. 0

4. 0

Change Year-To-Date (%) PETRO

MEDIA AUTO

AUTO

PROP

TRANS

COMM

PROP

FOOD

MEDIA

ENERG

ENERG

BANK

COMM

PETRO

SET

SET

BANK

HELTH

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

11

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 2017

REGIONAL MARKET PERFORMANCE

REGIONAL FUND FLOWS

Change 1 Day (%)

Change 1 Day (-1D)

Change 1 Week (%)

(US$ m) Nasdaq S.Korea

Philippines

Singapore

Hang Seng

S&P500

Nasdaq

Thailand

Singapore

China

MSCI Asia x JP

Dow Jones

S&P500

Nikkei

China

Philippines

Dow Jones

16

3

0

(61)

Kor ea

Thailan d

Phil ip.

India

69

35

Indone sia

(103) Asia-6

(US$ m) 526

S.Korea

600

Taiwan

Indonesia

400

MSCI Asia x JP

Taiwan

200

Hang Seng

Malaysia

0

Malaysia

Thailand

265

(200 )

(102)

(400 )

India

(242) (413)

(600 ) (0.6) (0.4) (0.2) 0.0 0.2 0. 4

Change 1 Month (%)

(110) Taiwan

Change 1 Week (-1W)

Indonesia

India

48

60 40 20 0 (20) (40) (60) (80) (100 ) (120 )

Nikkei

(2.0) 0. 0

2. 0

4.0

6. 0

Change Year-To-Date (%)

India

Kor ea

Asia-6

Phil ip.

Thailan d

Taiwan Indone sia

Change 1 Month (-1M) (US$ m)

Nikkei

5,000

MSCI Asia x JP

S. Korea

4,000

Hang Seng

India

Nasdaq

2,000

S.Korea

1,000

Singapore

India

0

Philippines

(1,000)

Nasdaq

3,053

3,000

MSCI Asia x JP

Dow Jones

4,510

1,446

1,031 70

Asia-6

Kor ea

India

Taiwan

Phil ip.

(434) (657) Thailan d Indone sia

Nikkei

Taiwan

Dow Jones

Change Year-To-Date (YTD)

Indonesia

Singapore

Hang Seng

Taiwan

25,000

S&P500

S&P500

20,000

Philippines

Indonesia

15,000

Thailand

Thailand

China

(US$ m)

0

5

10

Source: Bloomberg

THANACHART SECURITIES

15

7,398

6,490

5,000

1,103

0

Malaysia

(5)

7,535

10,000

China

Malaysia

20,691

0

10

20

30

40

(75)

(5,000) Asia-6

Kor ea

Taiwan

India

Phil ip.

(1,760)

Thailan d Indone sia

Source: Bloomberg

12

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 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

13

THAILAND’s TOP LOCAL KNOWLEDGE

Thursday, November 09, 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]

14