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

<ul>
<li>MINT report all-time high level of net profit at 4.6bn. However, stripping out extra items, core profit would be at Bt2.0bn (+66%QoQ vs. Bt2.4bn loss in 3Q21) </li>
<li>Two consecutive quarters of strong net profit   The company booked core profit at Bt2.0bn (+66%QoQ,turnaround from Bt2.4bn loss in 3Q21)supported by all-time high level of hotel revenue at Bt26bn</li>
<li>Food revenue climbed to all-time high level at Bt7.0bn (+16%QoQ +48%YoY) following strong SSSG at 16.6% compared with -7.2% and 7.8% in 3Q21 and 2Q22 respectively</li>
</ul>


MINT report all-time high level of net profit at 4.6bn. However, stripping out extra items, core profit would be at Bt2.0bn (+66%QoQ vs. Bt2.4bn loss in 3Q21) 
Two consecutive quarters of strong net profit   The company booked core profit at Bt2.0bn (+66%QoQ,turnaround from Bt2.4bn loss in 3Q21)supported by all-time high level of hotel revenue at Bt26bn
Food revenue climbed to all-time high level at Bt7.0bn (+16%QoQ +48%YoY) following strong SSSG at 16.6% compared with -7.2% and 7.8% in 3Q21 and 2Q22 respectively


MINT : 3Q22 Earnings Beat Our and Consensus Estimates

<ul>
<li>MINT has been underperforming Thai listed hotel peers by around30%YTD to trade at 34xPE’23E,or 30%discount to the sector as it has substantially absorbed overhang concerns over recession fear in Europe </li>
<li>Two consecutive quarters net profit should be seen. We expect the company to book core profit at Bt1.5bn (+25%QoQ, turnaround from Bt2.4bn loss in 3Q21) supported by all-time high level </li>
<li>Food revenue is expected to increase to Bt6.1bn (+1%QoQ +29%YoY) as we anticipate continuing solid SSSG at 20.3% compared with 4.2% and -7.2% in 3Q21 and 2Q22 respectively</li>
</ul>


MINT has been underperforming Thai listed hotel peers by around30%YTD to trade at 34xPE’23E,or 30%discount to the sector as it has substantially absorbed overhang concerns over recession fear in Europe 
Two consecutive quarters net profit should be seen. We expect the company to book core profit at Bt1.5bn (+25%QoQ, turnaround from Bt2.4bn loss in 3Q21) supported by all-time high level 
Food revenue is expected to increase to Bt6.1bn (+1%QoQ +29%YoY) as we anticipate continuing solid SSSG at 20.3% compared with 4.2% and -7.2% in 3Q21 and 2Q22 respectively


MINT : Limited Downside from Recession in Europe

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.

Thematic (Sector/Industry)

<div><div><div><div><ul><li>We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.</li><li>Our recommended stocks are CBG and SCGP.</li><li><div><div><p>The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.</p></div></div></li></ul></div></div></div></div>

We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.Our recommended stocks are CBG and SCGP.The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

<ul>
<li>We believe a 17%QTD correction in stock price create opportunity for investor to accumulate as it has substantially priced in potential impact from surging utility cost as a consequence </li>
<li>Increasing room rate should cover up the impact According to the management, utility cost accounted for around 5% of the company’s operating expense for hospitality business.</li>
<li>Expect 2H22 hotel operation to improve gradually The company’s hospitality business should continue to gain benefit from pent-up demand in Europe in 3Q22 before entering winter season in 4Q22.</li>
</ul>


We believe a 17%QTD correction in stock price create opportunity for investor to accumulate as it has substantially priced in potential impact from surging utility cost as a consequence 
Increasing room rate should cover up the impact According to the management, utility cost accounted for around 5% of the company’s operating expense for hospitality business.
Expect 2H22 hotel operation to improve gradually The company’s hospitality business should continue to gain benefit from pent-up demand in Europe in 3Q22 before entering winter season in 4Q22.


MINT : Concern over Surging Utility Price in EU Has Priced In’’

<ul>
<li>The company post net profit for the first time since pandemic began at Bt1.6bn in 2Q22 (vs. 3.8bn loss in 1Q22).The result came out above our expectations. Impressive result supported </li>
<li>Impressive recovery in hospitality business. Hotel revenue hit 12-quarter high at Bt25bn,thanks to NH Hotel Group (NHH) performance that posted record high of revenue at Є506m in 2Q22after its occupancy </li>
<li>Food revenue was at Bt6.3bn (+21%YoY-1%QoQ) backed by continuing solid SSSG at 7.8% compared with 4.2% and 6.1% in 2Q21 and 1Q22 respectively. This thanks to an increase in traffic </li>
</ul>


The company post net profit for the first time since pandemic began at Bt1.6bn in 2Q22 (vs. 3.8bn loss in 1Q22).The result came out above our expectations. Impressive result supported 
Impressive recovery in hospitality business. Hotel revenue hit 12-quarter high at Bt25bn,thanks to NH Hotel Group (NHH) performance that posted record high of revenue at Є506m in 2Q22after its occupancy 
Food revenue was at Bt6.3bn (+21%YoY-1%QoQ) backed by continuing solid SSSG at 7.8% compared with 4.2% and 6.1% in 2Q21 and 1Q22 respectively. This thanks to an increase in traffic 


MINT : Continue to Deliver Solid Earnings in 2H22

Thailand

Minor International PCL is a global company focused on three primary businesses including restaurants, hotels and lifestyle brands distribution.

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Minor International (MINT TB)

MINT : 3Q22 Earnings Beat Our and Consensus Estimates

MINT report all-time high level of net profit at 4.6bn. However, stripping out extra items, core profit would be at Bt2.0bn (+66%QoQ vs. Bt2.4bn...

Pi Securities PCL, Thailand

MINT : Limited Downside from Recession in Europe

MINT has been underperforming Thai listed hotel peers by around 30%YTD to trade at 34xPE’23E, or 30% discount to the sector as it has substantially...

Pi Securities PCL, Thailand

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth...

Krungthai XSpring

MINT : Concern over Surging Utility Price in EU Has Priced In’’

We believe a 17%QTDcorrection in stock price create opportunity for investor to accumulate as it has substantially priced in potential impact from...

Pi Securities PCL, Thailand

MINT : Continue to Deliver Solid Earnings in 2H22

The company post net profit for the first time since pandemic began at Bt1.6bn in 2Q22 (vs. 3.8bn loss in 1Q22). The result came out above our...

Pi Securities PCL, Thailand

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