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

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

<p><strong>Yesterday analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt141 based on 35xPE’21E, the average of the Thailand energy drink stocks.</strong></p><div>• Market expansion in CLMV is a key success factor for CBG. The company aims to penetrate the market in Vietnam by using the same strategy that has implemented successfully in Thailand, Cambodia and Myanmar.</div><div></div><div>• WOODY C+ LOCK is a main driver in domestic sales in the next three years driven by growing segment of functional driven following by health concern and aggressive point-of-sales expansion strategy.</div><div></div><div>• We expect 4Q20 earnings continue to break the record level given continuing growth momentum from CLMV and liquor’s distribution.</div><div>
<br>
</div><p><strong>We still like CBG for its 1) Bright outlook in CLMV energy drinks; 2) Potential growth from China market; 3) New S-Curve from new product (WOODY C+ LOCK); and 4) Solid liquor’s distribution sales growth momentum.</strong></p>

Yesterday analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt141 based on 35xPE’21E, the average of the Thailand energy drink stocks.• Market expansion in CLMV is a key success factor for CBG. The company aims to penetrate the market in Vietnam by using the same strategy that has implemented successfully in Thailand, Cambodia and Myanmar.• WOODY C+ LOCK is a main driver in domestic sales in the next three years driven by growing segment of functional driven following by health concern and aggressive point-of-sales expansion strategy.• We expect 4Q20 earnings continue to break the record level given continuing growth momentum from CLMV and liquor’s distribution.
 
We still like CBG for its 1) Bright outlook in CLMV energy drinks; 2) Potential growth from China market; 3) New S-Curve from new product (WOODY C+ LOCK); and 4) Solid liquor’s distribution sales growth momentum.

CBG: WOODY C+ LOCK and Vietnam Market Are a Key Catalyst

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p><a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> was hit quite hard in 2Q2020 in both its core retail and packaging businesses after a reasonable performance in 1Q2020 before the lockdown in Thailand and Vietnam took hold and during a period when consumers began stocking up. </p>
<p>The real impact on the company's packaging business came in mid-April when the Thai government put an alcohol ban in place, which was lifted in mid-May but led breweries to close operations for 4-6 weeks. </p>
<p>The ban was gradually lifted for retail stores initially followed by restaurants and bars and as a result, June saw recovery and July beer sales almost back to pre-COVID-19 levels. </p>
<p><a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> non-alcohol bottling saw positive momentum from strong growth in sales of Vitamin C drinks. It also saw a strong response to its new 500ml cans, which are popular for home beer consumption. </p>
<p>The aluminium can division has also seen the benefits of new customers coming on stream and replacing the gap left by reduced demand from Carabao. It is also seeing some scale benefits as a result of this for its slim cans.</p>
<p><a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)'</a>s core retail business under Big C saw a serious impact from COVID-19 in 2Q2020 with total sales down by -11.4%, with SSSG -17% but excluding its B-to-B business, SSSG fell an even greater -21.1% in 2Q2020.</p>
<p><a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> remains a well-rounded South East Asia recovery story through its packaging, with exposure to Thailand, Vietnam and Malaysia, as well as retail, with its number two position in Thailand in the hypermarket and supermarket space.</p>
<div class="content-highlight">
<p>Valuations look attractive versus history and with the prospect of a rapid recovery next year with the company trading in 22.0x FY21E PER versus its 5-year average forward PER of 29x, especially given a strong forecast recovery in earnings over the next two years. It also trades at a discount to Thai retail peers, despite a more positive earnings outlook. </p>
</div>

Berli Jucker (BJC TB) was hit quite hard in 2Q2020 in both its core retail and packaging businesses after a reasonable performance in 1Q2020 before the lockdown in Thailand and Vietnam took hold and during a period when consumers began stocking up. 
The real impact on the company's packaging business came in mid-April when the Thai government put an alcohol ban in place, which was lifted in mid-May but led breweries to close operations for 4-6 weeks. 
The ban was gradually lifted for retail stores initially followed by restaurants and bars and as a result, June saw recovery and July beer sales almost back to pre-COVID-19 levels. 
Berli Jucker (BJC TB) non-alcohol bottling saw positive momentum from strong growth in sales of Vitamin C drinks. It also saw a strong response to its new 500ml cans, which are popular for home beer consumption. 
The aluminium can division has also seen the benefits of new customers coming on stream and replacing the gap left by reduced demand from Carabao. It is also seeing some scale benefits as a result of this for its slim cans.
Berli Jucker (BJC TB)'s core retail business under Big C saw a serious impact from COVID-19 in 2Q2020 with total sales down by -11.4%, with SSSG -17% but excluding its B-to-B business, SSSG fell an even greater -21.1% in 2Q2020.
Berli Jucker (BJC TB) remains a well-rounded South East Asia recovery story through its packaging, with exposure to Thailand, Vietnam and Malaysia, as well as retail, with its number two position in Thailand in the hypermarket and supermarket space.

Valuations look attractive versus history and with the prospect of a rapid recovery next year with the company trading in 22.0x FY21E PER versus its 5-year average forward PER of 29x, especially given a strong forecast recovery in earnings over the next two years. It also trades at a discount to Thai retail peers, despite a more positive earnings outlook. 


Berli Jucker (BJC TB) - SE Asia's Consumer Recovery Proxy

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Thematic (Sector/Industry)

<section><div id="ember1644"><div><p>We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai market to try to find interesting ideas base upon Fundamentals or Valuation or Momentum or Risk or some combination thereof.</p></div></div></section>

We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai market to try to find interesting ideas base upon Fundamentals or Valuation or Momentum or Risk or some combination thereof.

The Stocks to Own in Thailand – Vol. 30

<p><strong>We maintain our BUY rating and roll over our target price to Bt141 based on 35xPE’21E (Previous TP is Bt110), the average of the Thailand energy drink group.</strong></p>
<ul>
<li>2Q20 net profit of Bt881m (+60%YoY,+10%QoQ) is the record level. The YoY growth was driven by sales growth at 20%YoY to Bt4.5bn especially from CLMV sales of Bt1.8bn (+41%YoY) and liquor’s distribution sales of Bt598m (+90%YoY). 1H20 was Bt1.7bn (+73%YoY) which is above our previous forecast and better than our expectation and the street.</li>
<li>Revised up 2020-21E earnings forecast by 7% and 11%, respectively.</li>
<li>We expect 3Q20 earnings continue to break the record level given continuing growth momentum from CLMV and liquor’s distribution.</li>
<li>The price correction after 2Q20 result announcement should provide an opportunity to accumulate the stock for long-term investment.</li>
</ul>
<p><strong>We still like CBG for its 1) Bright outlook in CLMV energy drinks; 2) Potential growth from china markets; 3) New S-Curve from new product (WOODY C+ LOCK); and 4) Solid liquor’s distribution sales growth momentum.</strong></p>

We maintain our BUY rating and roll over our target price to Bt141 based on 35xPE’21E (Previous TP is Bt110), the average of the Thailand energy drink group.

2Q20 net profit of Bt881m (+60%YoY,+10%QoQ) is the record level. The YoY growth was driven by sales growth at 20%YoY to Bt4.5bn especially from CLMV sales of Bt1.8bn (+41%YoY) and liquor’s distribution sales of Bt598m (+90%YoY). 1H20 was Bt1.7bn (+73%YoY) which is above our previous forecast and better than our expectation and the street.
Revised up 2020-21E earnings forecast by 7% and 11%, respectively.
We expect 3Q20 earnings continue to break the record level given continuing growth momentum from CLMV and liquor’s distribution.
The price correction after 2Q20 result announcement should provide an opportunity to accumulate the stock for long-term investment.

We still like CBG for its 1) Bright outlook in CLMV energy drinks; 2) Potential growth from china markets; 3) New S-Curve from new product (WOODY C+ LOCK); and 4) Solid liquor’s distribution sales growth momentum.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

<p>We continue to believe the path of least resistance is higher for global equities. As a result, our outlook remains bullish and we suggest buying any dips. This week we are focusing on Consumer Staples and Health Care, two Sectors that have been less-loved over the past several months. We also highlight additional ideas in the following Sectors: Services, Technology, Financials, Real Estate, Communications, and Utilities.</p>

We continue to believe the path of least resistance is higher for global equities. As a result, our outlook remains bullish and we suggest buying any dips. This week we are focusing on Consumer Staples and Health Care, two Sectors that have been less-loved over the past several months. We also highlight additional ideas in the following Sectors: Services, Technology, Financials, Real Estate, Communications, and Utilities.

EM Equities At New Highs Despite Some Caution Signs

Thailand

Carabao Group PCL, through its subsidiary, manufactures and distributes energy drinks.

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Carabao Group (CBG TB)

CBG: WOODY C+ LOCK and Vietnam Market Are a Key Catalyst

Yesterday analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt141 based on 35xPE’21E, the average of the...

Pi Securities PCL, Thailand

Berli Jucker (BJC TB) - SE Asia's Consumer Recovery Proxy

Berli Jucker (BJC TB)

Angus Mackintosh

The Stocks to Own in Thailand – Vol. 30

We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai...

A. Stotz Investment Research

CBG: Trading on High Valuation Zone

We maintain our BUY rating and roll over our target price to Bt141 based on 35xPE’21E (Previous TP is Bt110), the average of the Thailand energy...

Pi Securities PCL, Thailand

EM Equities At New Highs Despite Some Caution Signs

We continue to believe the path of least resistance is higher for global equities. As a result, our outlook remains bullish and we suggest buying...

Vermilion Research

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