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

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Thai Equity - Bottom-up - Equities

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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 maintain our BUY call with a lower DCF-based target price of Bt40.0 (from 42.0). We expect BRGIM’s 3Q22 recurring profit to fall 75% QoQ to Bt74.0</li>
<li>Weak earnings in 3Q22 We expect BGRIM to post a loss of Bt936.0m in 3Q22 due to its unrealized FX loss of around Bt1.0bn.</li>
<li>The recurring profit is expected to decline by 75%QoQ to Bt74m in 3Q22(-90%YoY), pressured by an increase in gas cost which rose to a record high of Bt550/MMBtu (+100%YoY, +22%QoQ)</li>
</ul>


We maintain our BUY call with a lower DCF-based target price of Bt40.0 (from 42.0). We expect BRGIM’s 3Q22 recurring profit to fall 75% QoQ to Bt74.0
Weak earnings in 3Q22 We expect BGRIM to post a loss of Bt936.0m in 3Q22 due to its unrealized FX loss of around Bt1.0bn.
The recurring profit is expected to decline by 75%QoQ to Bt74m in 3Q22(-90%YoY), pressured by an increase in gas cost which rose to a record high of Bt550/MMBtu (+100%YoY, +22%QoQ)


BGRIM : Rising Gas Cost to Drag 3Q22 Earnings

<ul>
<li>We maintain the BUY call with a TP of Bt42. The current share price has factored in the weak 2Q22 earnings impacted by high gas cost (+80% YoY). </li>
<li>Core earnings recovery in line with our forecast.BGRIM’s 2Q22 normalized net profit was at Bt147m (-86% YoY, 332% QoQ).The significant QoQ growth was driven by improvement in the SPP margin </li>
<li>However, BGRIM reported their 1st time quarterly loss of -Bt193m in 2Q22caused by unrealized FX loss of Bt541m booked during the period due to Thai baht depreciation against the USD</li>
</ul>


We maintain the BUY call with a TP of Bt42. The current share price has factored in the weak 2Q22 earnings impacted by high gas cost (+80% YoY). 
Core earnings recovery in line with our forecast.BGRIM’s 2Q22 normalized net profit was at Bt147m (-86% YoY, 332% QoQ).The significant QoQ growth was driven by improvement in the SPP margin 
However, BGRIM reported their 1st time quarterly loss of -Bt193m in 2Q22caused by unrealized FX loss of Bt541m booked during the period due to Thai baht depreciation against the USD


<ul>
<li>We maintain the BUY call with a TP of Bt42. We believe the current share paice has factored in the weak 2Q22 earnings impacted by high gas cost (+80% YoY). </li>
<li>Core earnings to rebound in 2Q22 We expect BGRIM to report the 1st time quarterly loss of 5m  in 2Q22 due to unrealized FX loss of Bt251m.</li>
<li>Meanwhile,  we expect its recurring profit to rise to a 3-quarter high at Bt246m (-73% YoY, +&gt;100% QoQ). The QoQ growth will be driven by Improving SPP margin</li>
</ul>


We maintain the BUY call with a TP of Bt42. We believe the current share paice has factored in the weak 2Q22 earnings impacted by high gas cost (+80% YoY). 
Core earnings to rebound in 2Q22 We expect BGRIM to report the 1st time quarterly loss of 5m  in 2Q22 due to unrealized FX loss of Bt251m.
Meanwhile,  we expect its recurring profit to rise to a 3-quarter high at Bt246m (-73% YoY, +&gt;100% QoQ). The QoQ growth will be driven by Improving SPP margin


BGRIM : 2Q22 Will See a Recovery in Core Earnings

<ul>
<li>The analyst meeting came out in a negative tone, as the projected rise in gas cost will pressure the SPP margins and drag the earnings in 1H22.  </li>
<li>We expect 1Q22 recurring profit to soften due to continued rise of fuel cost. The earnings should bottom out in 1H22 and pick up gradually 3Q22 onwards.</li>
<li>The SPP gas price has rose to Bt336/ MMBTU in 4Q21 compared to Bt268/MMBTU in 3Q21.According to management guidance the gas prices are further expected to rise near Bt450/MMBTU level</li>
</ul>


The analyst meeting came out in a negative tone, as the projected rise in gas cost will pressure the SPP margins and drag the earnings in 1H22.  
We expect 1Q22 recurring profit to soften due to continued rise of fuel cost. The earnings should bottom out in 1H22 and pick up gradually 3Q22 onwards.
The SPP gas price has rose to Bt336/ MMBTU in 4Q21 compared to Bt268/MMBTU in 3Q21.According to management guidance the gas prices are further expected to rise near Bt450/MMBTU level


BGRIM: Rising Gas Cost to Drag SPP Margins in 1H22

<ul>
<li>Last week analyst meeting came out in a neutral tone. We maintain the BUY recommendation based on the target price of Bt55.0 derived using DCF methodology(5.9% WACC and 1.0% TG)</li>
<li>Expect 4Q21 earnings to drop QoQ dragged by seasonal low electricity sales, declining SPP margin from rising gas cost and higher SG&amp;A expenses.</li>
<li>Positive 2022-23 outlook on the back of an expected 20% CAGR EPS growth for the period driven by 1) new capacity additions and 2) recovering SPP margin after adjustment</li>
</ul>


Last week analyst meeting came out in a neutral tone. We maintain the BUY recommendation based on the target price of Bt55.0 derived using DCF methodology(5.9% WACC and 1.0% TG)
Expect 4Q21 earnings to drop QoQ dragged by seasonal low electricity sales, declining SPP margin from rising gas cost and higher SG&amp;A expenses.
Positive 2022-23 outlook on the back of an expected 20% CAGR EPS growth for the period driven by 1) new capacity additions and 2) recovering SPP margin after adjustment


BGRIM: Growth Intact from 30% Capacity Expansion in 2022-23

Thailand

B.Grimm Power Public Company Limited operates as a renewable energy company. The Company focuses on the development, financing, construction, and operation of green field power plants. B.Grimm Power also renders electricity distribution, operations, and maintenance services. B.Grimm Power serves clients in Asia.

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B Grimm Power (BGRIM TB)

BGRIM : Rising Gas Cost to Drag 3Q22 Earnings

We maintain our BUY call with a lower DCF-based target price of Bt40.0 (from 42.0). We expect BRGIM’s 3Q22 recurring profit to fall 75% QoQ to...

Pi Securities PCL, Thailand

BGRIM : 2Q22 Core Earnings Recovered QoQ

We maintain the BUY call with a TP of Bt42. The current share price has factored in the weak 2Q22 earnings impacted by high gas cost (+80% YoY)....

Pi Securities PCL, Thailand

BGRIM : 2Q22 Will See a Recovery in Core Earnings

We maintain the BUY call with a TP of Bt42. We believe the current share paice has factored in the weak 2Q22 earnings impacted by high gas cost...

Pi Securities PCL, Thailand

BGRIM: Rising Gas Cost to Drag SPP Margins in 1H22

The analyst meeting came out in a negative tone, as the projected rise in gas cost will pressure the SPP margins and drag the earnings in 1H22. ...

Pi Securities PCL, Thailand

BGRIM: Growth Intact from 30% Capacity Expansion in 2022-23

Last week analyst meeting came out in a neutral tone. We maintain the BUY recommendation based on the target price of Bt55.0 derived using DCF...

Pi Securities PCL, Thailand

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