Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>CPF reported a 2Q23 net loss of Bt792mn, better than our projection of a net loss of Bt2.1bn due to higher-than- expected extra gain of Bt3.0bn vs. our estimate of Bt1.4bn.</li><li>Excluding the extra items, the firm reported a core loss of Bt3.8bn, missing our projection calling for a core loss of Bt3.5bn.</li><li>The core loss of Bt3.8bn in 2Q23 was much worse than the core profit of Bt1.5bn in 2Q22 and in line with the amount in 1Q23.</li></ul>

CPF reported a 2Q23 net loss of Bt792mn, better than our projection of a net loss of Bt2.1bn due to higher-than- expected extra gain of Bt3.0bn vs. our estimate of Bt1.4bn.Excluding the extra items, the firm reported a core loss of Bt3.8bn, missing our projection calling for a core loss of Bt3.5bn.The core loss of Bt3.8bn in 2Q23 was much worse than the core profit of Bt1.5bn in 2Q22 and in line with the amount in 1Q23.

Earnings Review - Charoen Pokphand Foods Plc. (CPF) - August 15, 2023

Thematic (Sector/Industry)

<ul><li>KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.</li><li>This surplus was achieved with imports declining by 1.7% YoY, driven by reduced imports of EVs.</li><li>Concurrently, exports surged to a 14-month high, rising by 7.2% YoY, buoyed by global trade volume trends expected to grow by 2.6% YoY due to easing inflationary pressures.</li></ul>

KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.This surplus was achieved with imports declining by 1.7% YoY, driven by reduced imports of EVs.Concurrently, exports surged to a 14-month high, rising by 7.2% YoY, buoyed by global trade volume trends expected to grow by 2.6% YoY due to easing inflationary pressures.

Economic Update – Exports & Imports - June 24, 2024

<ul><li>The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.</li><li>In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.</li><li>Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. </li></ul>

The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. 

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

<ul><li>The SET was volatile, moving in a narrow range after being pressured by shrinking March export figures and profit taking on DELTA.</li><li>But most large cap stocks were able to rise, while foreign investors turned to buy — this allowed the index to close up with light volume.</li><li>The index has moved sideways in a tight range and will probably have an upward direction toward the resistance at 1,367 points; standing above this level would lead the index to the major resistance at 1,380 points, and surpassing it would allow the index to run up to the 1,400-point area.</li></ul>

The SET was volatile, moving in a narrow range after being pressured by shrinking March export figures and profit taking on DELTA.But most large cap stocks were able to rise, while foreign investors turned to buy — this allowed the index to close up with light volume.The index has moved sideways in a tight range and will probably have an upward direction toward the resistance at 1,367 points; standing above this level would lead the index to the major resistance at 1,380 points, and surpassing it would allow the index to run up to the 1,400-point area.

<ul><li>The SET fell due to profit taking after rebounding for four consecutive days, but it still increased 2.09% from the previous week, with the market focusing on the 1Q24 earning results and foreign investors playing an important role in steering the market.</li><li>However, the trading atmosphere was sluggish, and volume remained light.</li><li>The index has been trading sideways recently, fluctuating within the range of 1,355-1,368 points in the short term. </li></ul>

The SET fell due to profit taking after rebounding for four consecutive days, but it still increased 2.09% from the previous week, with the market focusing on the 1Q24 earning results and foreign investors playing an important role in steering the market.However, the trading atmosphere was sluggish, and volume remained light.The index has been trading sideways recently, fluctuating within the range of 1,355-1,368 points in the short term. 

Thailand

Thai Union Group Public Company Limited produces and exports frozen and canned seafood products including frozen tuna loin, shrimp and cephalopod. The Company also produces canned pet foods from by products of its seafood process.  Additionally, the Company produces fish snack and canned tuna which are marketed locally.

Sappe Public Company Limited manufactures and distributes health drinks. The Company manufactures dietary and fruit juice drinks. Sappe distributes their products internationally.

President Bakery PCL produces and distributes a wide variety of baked goods to fast food restaurants and convenient stores.  The company also sells its product through its own retail stores under Farmhouse shop and Deliya by Farmhouse.

Ichitan Group PCL operates in the beverage industry. The Company, through its subsidiaries, produces and distributes a variety of tea beverages.

Thai Vegetable Oil Public Company Limited produces and markets soybean cooking oil under its A-ngoon brand name.  Additionally, the Company produced other soybean products including soymeal, full-fat soy, cooked and un-extracted soybeanseed, and lecithin.  Its products are also used in industrial applications such as the production of paint or canned food.

Thaitheparos PCL manufactures food seasoning products including flavor sauce, vinegar, chili sauce, tomato sauce, oyster sauce, chili and tomato sauce, soy sauce, and powdered sauce, under branded names.  The Company also produces canned fruits.

GFPT Public Company Limited produces frozen chicken parts and distributes its products under GFPT, Common Food, and Nichirei Core.  The Company sells its products to domestic and export markets.

Kaset Thai International Sugar Corp PCL produces and distributes sugar to domestic and international clients.  The Company also produces bio products, which are used by-products from sugar production as raw materials, such as paper pulp from bagasse, and, ethanol from molasses and electrical energy from biomass.

Kaset Thai International Sugar Corp (KTIS TB)

Exotic Food Public Company Limited manufactures Thai food products that are sold in independent food stores globally.

Khon Kaen Sugar Industry PCL produces sugar, energy and agricultural products. The Company produces sugar and molasses, fertilizers, ethanol, and electricity.

PPB Group Berhad is an investment holding company. The Company operations include grains trading, flour and animal feed milling industry as well as downstream activities including livestock farming, food processing and consumer products distribution with primary focus in Indonesia, Malaysia, China, India and Europe.

Dali Foods Group Company Ltd. is a snack food and beverage company. The Company is actively expanding its products offering and distributes its products through retailers.

IOI Corporation Berhad cultivates and processes oil palm and rubber.  The Company, through its subsidiaries, operates in property development and investment, provides landscape services, and sells ornamental plants and turfing grass. IOI Corporation also manufactures industrial and medical gases, and provides building, engineering, and construction services.

CJ CheilJedang Corp. manufactures processed food products.  The Company's products include refined sugar, monosodium glutamate (MSG), condiment, wheat powder, flour, cooking oil, processed meats, and animal feed.  CJ CheilJedang also manufactures pharmaceutical and household products.

Flowers Foods, Inc. produces and markets packaged bakery foods for retail and foodservice customers. The Company offers fresh packaged and frozen bakery products, as well as pastries, doughnuts, and bakery snack products. Flowers Foods serves customers in the State of Georgia.

Universal Robina Corporation manufactures, markets, and distributes branded consumer foods. The Company's products include hogs and poultry farming, animal feeds, corn products, and animal health products.

YAMAZAKI BAKING CO., LTD. produces baking foods including bread, pastry, and cake.  The Company operates nationwide sales network.  YAMAZAKI BAKING also operates franchised cafeterias and convenience stores.

Nestle (Malaysia) Berhad is an investment holding company.  The Company, through its subsidiaries, markets and sells powdered milk and drinks, liquid milk and juices, instant coffee, and instant noodles. Nestle also manufactures and provides packaging for culinary and chocolate-based food products and trades flavoring ingredients.

PT Charoen Pokphand Indonesia Tbk manufactures and distributes animal feeds, woven plastic bags, and poultry equipment as well as processes chicken.  Through its subsidiaries, the Company also operates poultry farms and distributes its products.

Ruchi Soya Industries Limited manufactures soybean oil, vanaspati vegetable fat, texturized soya protein, soya flour and other soya products.  The Group has also developed Palm stearin and Palm olein cooking oils.

Charoen Pokphand Foods Public Company Limited produces a wide range of food products. The Company's products include chicken, pork, shrimp, fish, eggs. and duck.

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CP FOODS (CPF TB)

Earnings Review - Charoen Pokphand Foods Plc. (CPF) - August 15, 2023

CPF reported a 2Q23 net loss of Bt792mn, better than our projection of a net loss of Bt2.1bn due to higher-than- expected extra gain of Bt3.0bn vs....

Krungthai XSpring

Economic Update – Exports & Imports - June 24, 2024

KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.

Krungthai XSpring

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits

Krungthai XSpring

Technical Analysis - APRIL 30, 2024

The SET was volatile, moving in a narrow range after being pressured by shrinking March export figures and profit taking on DELTA.

Krungthai XSpring

Technical Analysis - April 29, 2024

The SET fell due to profit taking after rebounding for four consecutive days, but it still increased 2.09% from the previous week

Krungthai XSpring

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