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

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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

<p><strong>Yesterday analyst meeting came out in a neutral tone. Expect the 2H21 earnings to be pressured by lower domestic electricity sales due to partial lockdown and normalize by 1H22. New M&amp;As to be key growth driver.</strong></p><div>• Expect 3Q21 recurring profit to improve YoY from increasing electricity sales to IU clients (Thailand), and revenue recognition from Cambodia solar power plant (39MW) COD in 4Q20. While soften QoQ due to anticipated lower electricity sales to EGAT &amp; IU dragged by partial domestic lockdown and shrinking SPP gross profit margin from escalating gas price.</div><div></div><div>• Target to expand the power plant operating capacity to 7.2GW by 2025, from 3.1GW in 2020 representing a 19% CAGR growth. 444MW projects are in pipeline and remaining 3,7GW will come from new M&amp;A’s.</div><div></div><div>• Each 100MWe addition will bring an upside of Bt2.1/sh to our TP.</div><div></div><div><strong>We maintain the BUY recommendation based on a target price of Bt55.0 derived using DCF methodology (5.9% WACC and 1.0% TG), implying 44.0x PE’22E</strong></div>

Yesterday analyst meeting came out in a neutral tone. Expect the 2H21 earnings to be pressured by lower domestic electricity sales due to partial lockdown and normalize by 1H22. New M&amp;As to be key growth driver.• Expect 3Q21 recurring profit to improve YoY from increasing electricity sales to IU clients (Thailand), and revenue recognition from Cambodia solar power plant (39MW) COD in 4Q20. While soften QoQ due to anticipated lower electricity sales to EGAT &amp; IU dragged by partial domestic lockdown and shrinking SPP gross profit margin from escalating gas price.• Target to expand the power plant operating capacity to 7.2GW by 2025, from 3.1GW in 2020 representing a 19% CAGR growth. 444MW projects are in pipeline and remaining 3,7GW will come from new M&amp;A’s.• Each 100MWe addition will bring an upside of Bt2.1/sh to our TP.We maintain the BUY recommendation based on a target price of Bt55.0 derived using DCF methodology (5.9% WACC and 1.0% TG), implying 44.0x PE’22E

<p><strong>Yesterday analyst meeting came out in a positive 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), implying 44.0x PE’22E.</strong></p><div>• Expect 2Q21 earnings to improve QoQ on the back of better contribution from solar projects in Vietnam and expending IU customer base of Thailand SPPs.</div><div></div><div>• Maintain positive 2021 earnings outlook with a 19% YoY EPS growth from full year and partial profit recognition from 148MWe projects COD in 2020-21 and improving GPM of SPP power plants</div><div></div><div>• Plan to expand portfolio by 2x to 7.2GWe by 2025. New project acquisitions expected in 2H21.</div>

Yesterday analyst meeting came out in a positive 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), implying 44.0x PE’22E.• Expect 2Q21 earnings to improve QoQ on the back of better contribution from solar projects in Vietnam and expending IU customer base of Thailand SPPs.• Maintain positive 2021 earnings outlook with a 19% YoY EPS growth from full year and partial profit recognition from 148MWe projects COD in 2020-21 and improving GPM of SPP power plants• Plan to expand portfolio by 2x to 7.2GWe by 2025. New project acquisitions expected in 2H21.

BGRIM: Expecting New Project Announcements in 2H21

<p><strong>Yesterday analyst meeting came out with positive tone. We maintain the BUY recommendation based on the target price of Bt55.0 derived from DCF methodology (5.9% WACC and 1.0% TG), implying 48.0x PE’21.</strong></p><div>• Expect 1Q21 earnings to improve both YoY and QoQ, on the back of earnings recognition from 119MWe added in 2020, and improving GPM.</div><div></div><div>• LNG import for use in existing SPP power plants, is expected to commence by 2H21.</div><div></div><div>• Upside from new projects totaling 270MW to be finalized within 2021.</div>

Yesterday analyst meeting came out with positive tone. We maintain the BUY recommendation based on the target price of Bt55.0 derived from DCF methodology (5.9% WACC and 1.0% TG), implying 48.0x PE’21.• Expect 1Q21 earnings to improve both YoY and QoQ, on the back of earnings recognition from 119MWe added in 2020, and improving GPM.• LNG import for use in existing SPP power plants, is expected to commence by 2H21.• Upside from new projects totaling 270MW to be finalized within 2021.

BGRIM: Expect LNG Import to Commence by 2H21

Thematic (Sector/Industry)

<p><strong>BCPG, GUNKUL, GULF top pick growth stocks</strong></p><ul>
<li>
<strong>Earnings upcycle in 2021:</strong> We expect BCPG, GULF and GUNKUL to achieve 15 to 30% net profit growth during 2021 on the back 12 to 30% power generation capacity expansion in 2020-21 period.</li>
<li>
<strong>Declining gas price to support SPP performance:</strong> The industrial user power sales of SPP players BGRIM, GPSC and GULF (accounting 10 to 20% of the revenue) has rebound to pre – COVID 19 levels as of 4Q20.  We expect the declining gas cost (-10% YoY) will help in revamping the GPM and support the sector performance.</li>
</ul><p><strong>EGCO, RATCH top pick value stocks</strong></p><ul>
<li>
<strong>Cheap valuation:</strong> The stock price of EGCO and RATCH faced 70% and 30% fall in 2020 respectively. The stocks are trading very cheap at 9 to 13x PE’21E and having the companies already overcome the COVID-19 impact we believe the price correction has created an investment opportunity.</li>
<li>
<strong>Decent dividend yield:</strong> We expect RATCH and EGCO to pay a decent dividend yield of 3.3 to 4.4% in 2021.</li>
</ul><p><strong>Maintain HOLD rating on BGRIM, EA and GPSC</strong></p><ul><li>We have a positive view on BGRIM and GPSC as the SPP players will benefit from declining gas price. However, due to limit upside from current share price we maintain the HOLD rating. We recommend to HOLD EA, as the stock performance will depend on new EV-ESS business success and valuation demands.</li></ul>

BCPG, GUNKUL, GULF top pick growth stocks

Earnings upcycle in 2021: We expect BCPG, GULF and GUNKUL to achieve 15 to 30% net profit growth during 2021 on the back 12 to 30% power generation capacity expansion in 2020-21 period.

Declining gas price to support SPP performance: The industrial user power sales of SPP players BGRIM, GPSC and GULF (accounting 10 to 20% of the revenue) has rebound to pre – COVID 19 levels as of 4Q20.  We expect the declining gas cost (-10% YoY) will help in revamping the GPM and support the sector performance.
EGCO, RATCH top pick value stocks

Cheap valuation: The stock price of EGCO and RATCH faced 70% and 30% fall in 2020 respectively. The stocks are trading very cheap at 9 to 13x PE’21E and having the companies already overcome the COVID-19 impact we believe the price correction has created an investment opportunity.

Decent dividend yield: We expect RATCH and EGCO to pay a decent dividend yield of 3.3 to 4.4% in 2021.
Maintain HOLD rating on BGRIM, EA and GPSCWe have a positive view on BGRIM and GPSC as the SPP players will benefit from declining gas price. However, due to limit upside from current share price we maintain the HOLD rating. We recommend to HOLD EA, as the stock performance will depend on new EV-ESS business success and valuation demands.

Thailand Power Sector: Overweight-Bright 2021 Performance

<p><strong>Last week's analyst meeting came out in a positive 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), implying 47.0x PE’21.</strong></p><div>• We expect 4Q20 earnings to grow YoY on the back of earnings recognition from 126MWe projects added in 1H20, Improving Industrial user (IU) electricity sales and declining gas cost. While softening QoQ due to seasonal factor and higher SG&amp;A expenses</div><div></div><div>• Positive 2021 earnings outlook as we expect an 18.0% YoY EPS growth from 1) Improving gross profit margin due to declining gas cost (-9.0% YoY) 2) Ful year and partial earnings recognition from 181MWe projects added in 2020-21.</div><div></div><div>• Target to expand power generation capacity to 7.2GW by 2025 (2.0x from present level).</div>

Last week's analyst meeting came out in a positive 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), implying 47.0x PE’21.• We expect 4Q20 earnings to grow YoY on the back of earnings recognition from 126MWe projects added in 1H20, Improving Industrial user (IU) electricity sales and declining gas cost. While softening QoQ due to seasonal factor and higher SG&amp;A expenses• Positive 2021 earnings outlook as we expect an 18.0% YoY EPS growth from 1) Improving gross profit margin due to declining gas cost (-9.0% YoY) 2) Ful year and partial earnings recognition from 181MWe projects added in 2020-21.• Target to expand power generation capacity to 7.2GW by 2025 (2.0x from present level).

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: Expect New M&As in near Term

Yesterday analyst meeting came out in a neutral tone. Expect the 2H21 earnings to be pressured by lower domestic electricity sales due to partial...

Pi Securities PCL, Thailand

BGRIM: Expecting New Project Announcements in 2H21

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

Pi Securities PCL, Thailand

BGRIM: Expect LNG Import to Commence by 2H21

Yesterday analyst meeting came out with positive tone. We maintain the BUY recommendation based on the target price of Bt55.0 derived from DCF...

Pi Securities PCL, Thailand

Thailand Power Sector: Overweight-Bright 2021 Performance

Power Sector: Overweight-Bright 2021 sector performance. BCPG, GUNKUL, GULF top pick growth stocks. EGCO, RATCH top pick value stocks

Pi Securities PCL, Thailand

BGRIM: Advantage from Declining Gas Cost

Last week's analyst meeting came out in a positive tone. We maintain the BUY recommendation based on the target price of Bt55.0

Pi Securities PCL, Thailand

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