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>The 3Q22 net profit fall to a multi-year low of Bt2.4bn, shallow than ours and consensus expectation.The analyst meeting also came out in a negative tone indicating a bleak 4Q22-2023 </li>
<li>3Q22 earnings fall to a multi-year low The 3Q22 net profit fall to Bt2.4bn (-64% YoY, -75% QoQ), mainly dragged by chemicals and cement-building material (CBM) businesses.</li>
<li>Expect olefins downcycle prolong till 2024 The sluggish petrochemical segment performance should continue in 4Q22 due to inferior spreads of olefins, and PVC. Olefins spreads viz</li>
</ul>


The 3Q22 net profit fall to a multi-year low of Bt2.4bn, shallow than ours and consensus expectation.The analyst meeting also came out in a negative tone indicating a bleak 4Q22-2023 
3Q22 earnings fall to a multi-year low The 3Q22 net profit fall to Bt2.4bn (-64% YoY, -75% QoQ), mainly dragged by chemicals and cement-building material (CBM) businesses.
Expect olefins downcycle prolong till 2024 The sluggish petrochemical segment performance should continue in 4Q22 due to inferior spreads of olefins, and PVC. Olefins spreads viz


SCC : Bleak 4Q22-2023 Outlook Due to Petrochemical Trough

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 keep our BUY call with a TP of Bt445 derived from 13.7xPE’22E, which is close to its 10-years trailing average.We recommend accumulating to capture better 2H22 outlook and beyond</li>
<li>Solid 2Q22 core profit result as expected SCC’s 2Q22 core profit was at Bt10bn (-42%YoY, +29%QoQ), which was in-line with our estimates. Behind the resilient QoQ rise is attributed </li>
<li>Petrochemical unit’s earnings was at Bt3.7bn (-64%YoY, +3%QoQ). The QoQ slightly grew on the back of seasonal high dividend income.</li>
</ul>


We keep our BUY call with a TP of Bt445 derived from 13.7xPE’22E, which is close to its 10-years trailing average.We recommend accumulating to capture better 2H22 outlook and beyond
Solid 2Q22 core profit result as expected SCC’s 2Q22 core profit was at Bt10bn (-42%YoY, +29%QoQ), which was in-line with our estimates. Behind the resilient QoQ rise is attributed 
Petrochemical unit’s earnings was at Bt3.7bn (-64%YoY, +3%QoQ). The QoQ slightly grew on the back of seasonal high dividend income.


SCC : 2Q22 Core Profit Recovered as Expected

<ul>
<li>We maintain our BUY call with a TP of Bt445 based on 13.7xPE’22E,which is close to its 10-years trailing mean. We recommend investors to accumulate in light of 4% yield </li>
<li>Solid QoQ improvement expected in 2Q22 core profit We forecast 2Q22 core profit at Bt9.2bn,decline 46%YoY but edge-up 19%QoQ.The YoY erosion is due to weaker assumed gross margin of 16.2%</li>
<li>We foresee chemical unit’s profit to fall 63%YoY but to march up 8%QoQ with wider spreads. In our view, the QoQ uptrend is underpin by solid PVC spread (+41%QoQ), despite </li>
</ul>


We maintain our BUY call with a TP of Bt445 based on 13.7xPE’22E,which is close to its 10-years trailing mean. We recommend investors to accumulate in light of 4% yield 
Solid QoQ improvement expected in 2Q22 core profit We forecast 2Q22 core profit at Bt9.2bn,decline 46%YoY but edge-up 19%QoQ.The YoY erosion is due to weaker assumed gross margin of 16.2%
We foresee chemical unit’s profit to fall 63%YoY but to march up 8%QoQ with wider spreads. In our view, the QoQ uptrend is underpin by solid PVC spread (+41%QoQ), despite 


SCC : Meaningful QoQ Recovery Expected in 2Q22

<ul>
<li>Maintain BUY rating with a TP of Bt445.00, based on 13.7xPE’22E, which is close to its 10-years trading mean.</li>
<li>Unlock value potential through SCGCs IPO, citing a stronger position in PE/PP/PVC, fuel by solid olefins demand in Vietnam and Indonesia, increasing HVA products and Vinyl.</li>
<li>LSP project is on planned at 93% completion, which is expected to COD in 1H23. We view the new capacity to come into operation in times of better petrochemical outlook.</li>
</ul>


Maintain BUY rating with a TP of Bt445.00, based on 13.7xPE’22E, which is close to its 10-years trading mean.
Unlock value potential through SCGCs IPO, citing a stronger position in PE/PP/PVC, fuel by solid olefins demand in Vietnam and Indonesia, increasing HVA products and Vinyl.
LSP project is on planned at 93% completion, which is expected to COD in 1H23. We view the new capacity to come into operation in times of better petrochemical outlook.


SCC: SCGC’s Spin-Off Moves a Step Closer

Thailand

The Siam Cement Public Company Limited is a diversified industrial company. The Company's operations include cement manufacturing, petrochemicals manufacturing, paper manufacturing, building product manufacturing, and distribution.

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Siam Cement (SCC TB)

SCC : Bleak 4Q22-2023 Outlook Due to Petrochemical Trough

The 3Q22 net profit fall to a multi-year low of Bt2.4bn, shallow than ours and consensus expectation. The analyst meeting also came out in a...

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

SCC : 2Q22 Core Profit Recovered as Expected

We keep our BUY call with a TP of Bt445 derived from 13.7xPE’22E, which is close to its 10-years trailing average. We recommend accumulating to...

Pi Securities PCL, Thailand

SCC : Meaningful QoQ Recovery Expected in 2Q22

We maintain our BUY call with a TP of Bt445 based on 13.7xPE’22E, which is close to its 10-years trailing mean.We recommend investors to accumulate...

Pi Securities PCL, Thailand

SCC: SCGC’s Spin-Off Moves a Step Closer

Maintain BUY rating with a TP of Bt445.00, based on 13.7xPE’22E, which is close to its 10-years trading mean. Unlock value potential through SCGCs...

Pi Securities PCL, Thailand

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