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>We keep our BUY rating with a TP of Bt21.4, derived from 14xPE’23E. We recommend increasing position in ASIAN on expected brighter 2H22 outlook and onwards, supported by capacity expansion</li>
<li>Margin resilience was key to decent 2Q22 results ASIAN’s 2Q22 earnings posted at Bt264m, dropped 10%YoY but rose 7%QoQ, which was in-line with our forecast. Behind the QoQ growth </li>
<li>Brighter prospects in 2H22 Looking ahead,we see 2H22 earnings momentum on highway to growth,backed by capacity expansion in the pet food unit,which increased to 42,000t/pa (+17%QoQ) in the late 1H22</li>
</ul>


We keep our BUY rating with a TP of Bt21.4, derived from 14xPE’23E. We recommend increasing position in ASIAN on expected brighter 2H22 outlook and onwards, supported by capacity expansion
Margin resilience was key to decent 2Q22 results ASIAN’s 2Q22 earnings posted at Bt264m, dropped 10%YoY but rose 7%QoQ, which was in-line with our forecast. Behind the QoQ growth 
Brighter prospects in 2H22 Looking ahead,we see 2H22 earnings momentum on highway to growth,backed by capacity expansion in the pet food unit,which increased to 42,000t/pa (+17%QoQ) in the late 1H22


<ul>
<li>We maintain our BUY rating but roll over TP to 14xPE’23E(+0.5SD of its 5-yrs trading mean)at Bt21.4 or -7% from previous TP.We recommend to accumulate ASIAN on expected positive 2Q22 </li>
<li>Expect 2Q22 result to recover QoQ We expect 2Q22 core profit at Bt259m (-12%YoY, +5%QoQ). Despite expected 3%QoQ sales growth to Bt2.9bn,the QoQ growth in 2Q22 earnings will be driven </li>
<li>Profit momentum poised to further climb in 2H22 We expect 2H22 core profit to stride a firmer upward path on the back of capacity expansion effect.The pet food segment’s production </li>
</ul>


We maintain our BUY rating but roll over TP to 14xPE’23E(+0.5SD of its 5-yrs trading mean)at Bt21.4 or -7% from previous TP.We recommend to accumulate ASIAN on expected positive 2Q22 
Expect 2Q22 result to recover QoQ We expect 2Q22 core profit at Bt259m (-12%YoY, +5%QoQ). Despite expected 3%QoQ sales growth to Bt2.9bn,the QoQ growth in 2Q22 earnings will be driven 
Profit momentum poised to further climb in 2H22 We expect 2H22 core profit to stride a firmer upward path on the back of capacity expansion effect.The pet food segment’s production 


<ul>
<li>Maintain BUY rating with TP of B23.00 derived from 16xPE’22E, which is close to +1SD of 5-years trading average. Our rating reflects strong pet food growth outlook, attractive 3.8% yield</li>
<li>We foresee earnings momentum to improve QoQ in 2Q22, supported by better pet food business unit from new capacity, and further strengthen by Baht downtrend.</li>
<li>In our view, the new pet food capacity should gather pace in 2H22, upon better demand in light of favorable macro dynamics. Moreover</li>
</ul>


Maintain BUY rating with TP of B23.00 derived from 16xPE’22E, which is close to +1SD of 5-years trading average. Our rating reflects strong pet food growth outlook, attractive 3.8% yield
We foresee earnings momentum to improve QoQ in 2Q22, supported by better pet food business unit from new capacity, and further strengthen by Baht downtrend.
In our view, the new pet food capacity should gather pace in 2H22, upon better demand in light of favorable macro dynamics. Moreover


ASIAN: Pet Food Unit Continue to Be Key Growth Driver

<ul>
<li>Maintain BUY rating with a TP of B23.00 based on 16xPE’22E, which is close to +1SD of its five-years average trading.Our rating is premised on positive pet food growth outlook</li>
<li>We expect 1Q22E earnings to come in at Bt250m (+16%YoY,-6%QoQ), soften QoQ on the back of weak margin outlook from surging raw material costs. </li>
<li>We foresee earnings visibility to pick up in 2Q22 onwards, driven by stronger pet food revenue thanks to new capacity and margin improvement given easing cost pressures.</li>
</ul>


Maintain BUY rating with a TP of B23.00 based on 16xPE’22E, which is close to +1SD of its five-years average trading.Our rating is premised on positive pet food growth outlook
We expect 1Q22E earnings to come in at Bt250m (+16%YoY,-6%QoQ), soften QoQ on the back of weak margin outlook from surging raw material costs. 
We foresee earnings visibility to pick up in 2Q22 onwards, driven by stronger pet food revenue thanks to new capacity and margin improvement given easing cost pressures.


ASIAN: Expect 1Q22 Earnings to Modestly Drop QoQ

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>The long-term decline in Thailand allocations among Asia Ex-Japan funds appears to be stabilising.</li>
<li>Over the past 6-months, Thailand weights have increased by 0.29%, with 6.5% of the funds in our analysis adding exposure, though managers remain underweight and underinvested.</li>
<li>CP ALL PCL is the most widely held stock, but recent fund activity has favoured Central Pattana Pub, Bangkok Dusit Medical Services and Asian Sea.</li>
</ul>


The long-term decline in Thailand allocations among Asia Ex-Japan funds appears to be stabilising.
Over the past 6-months, Thailand weights have increased by 0.29%, with 6.5% of the funds in our analysis adding exposure, though managers remain underweight and underinvested.
CP ALL PCL is the most widely held stock, but recent fund activity has favoured Central Pattana Pub, Bangkok Dusit Medical Services and Asian Sea.


Thailand

Asian Sea Corporation Public Company Limited processes and exports frozen seafood and Pet Food. The Company offers frozen shrimp, canned tuna, breaded sillago fish fillet, and pet foods in canes and pouches. Asian Sea serves customers worldwide.

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Asian Sea (ASIAN TB)

ASIAN : In-Line 2Q22 Result

We keep our BUY rating with a TP of Bt21.4, derived from 14xPE’23E. We recommend increasing position in ASIAN on expected brighter 2H22 outlook and...

Pi Securities PCL, Thailand

ASIAN : Picking up Steam in 2Q22

We maintain our BUY rating but roll over TP to 14xPE’23E (+0.5SD of its 5-yrs trading mean) at Bt21.4 or -7% from previous TP. We recommend to...

Pi Securities PCL, Thailand

ASIAN: Pet Food Unit Continue to Be Key Growth Driver

Maintain BUY rating with TP of B23.00 derived from 16xPE’22E,which is close to +1SD of 5-years trading average. Our rating reflects strong pet food...

Pi Securities PCL, Thailand

ASIAN: Expect 1Q22 Earnings to Modestly Drop QoQ

Maintain BUY rating with a TP of B23.00 based on 16xPE’22E, which is close to +1SD of its five-years average trading. Our rating is premised on...

Pi Securities PCL, Thailand

The Thailand Turnaround

The long-term decline in Thailand allocations among Asia Ex-Japan funds appears to be stabilising. We analyse the shift in sentiment among investors.

Steven Holden

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