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

BJC’s 3Q20 net profit was at Bt1.1bn (-40%YoY, +247%QoQ). The 9M20 result accounted for 60% of 2020E earnings forecast.<ul>
<li>The fall in 3Q20 earnings was pressured by a drop in revenue to Bt35bn (-9%YoY,-3%QoQ). SSSG reported at -17.8% from -17% in 2Q20.</li>
<li>We maintain our positive outlook in 2021 earnings driven by (1) improvement of SSSG by 3%YoY in 2021E (2) recovery in rental income after easing lockdown as we expect occupancy rate to pick up to 95% in 2021 from a bottom at 85% in 2Q20 (3) cost saving from tax-deductible item in the next three year.</li>
<li>We still like this stock given (1) its strong integrated solid supply chain which allow the company to benefit from industry growth and recovery; (2) double digits growth for small format stores in the next two years (ie., Mini BigC and BigC Market which currently contribute 15% of total sales).</li>
</ul>We maintain BUY rating with a new target price of Bt43 (Previous TP of Bt55) based on 30xPE’21E, closed to Consumer Discretionary Sector. Target price cut was due to earnings downward revision by 22% in 2021E.

BJC’s 3Q20 net profit was at Bt1.1bn (-40%YoY, +247%QoQ). The 9M20 result accounted for 60% of 2020E earnings forecast.
The fall in 3Q20 earnings was pressured by a drop in revenue to Bt35bn (-9%YoY,-3%QoQ). SSSG reported at -17.8% from -17% in 2Q20.
We maintain our positive outlook in 2021 earnings driven by (1) improvement of SSSG by 3%YoY in 2021E (2) recovery in rental income after easing lockdown as we expect occupancy rate to pick up to 95% in 2021 from a bottom at 85% in 2Q20 (3) cost saving from tax-deductible item in the next three year.
We still like this stock given (1) its strong integrated solid supply chain which allow the company to benefit from industry growth and recovery; (2) double digits growth for small format stores in the next two years (ie., Mini BigC and BigC Market which currently contribute 15% of total sales).
We maintain BUY rating with a new target price of Bt43 (Previous TP of Bt55) based on 30xPE’21E, closed to Consumer Discretionary Sector. Target price cut was due to earnings downward revision by 22% in 2021E.

BG Container Glass PCL / Equity Bottom-Up

BGC announced the Stock Exchange of Thailand on 15th October to acquire the three companies with an investment cost of Bt4bn.<ul>
<li>This deal will be paid by Right Offering (Bt2.5bn) and banking loan (Bt1.5bn). However, we expect three acquired companies continued to make loss in the next twelve months, there is no accretive value to BGC.</li>
<li>The deal is needed to be approved from the shareholder’s meetings on 15th Dec 2020. Meanwhile, the major shareholder ‘Bangkok Glass’ (owned 72% of BGC) are unable to make vote.</li>
<li>Under our base case scenario (see. Case No.4 on the back page (1) shareholders approve capital raising (2) new three company continue to make equal loss in 2021 as occurred in 2019 and (3) 4% interest rate for  banking loan.), we expect 55% dilution effect  to our EPS’21E forecast and 52% to our existing target price of Bt11.5.</li>
</ul>We downgrade our rating  for BGC from BUY to HOLD. As this deal is not finalized yet, we will revise our target price after analysts’ meeting on 17 November 2020.

BGC announced the Stock Exchange of Thailand on 15th October to acquire the three companies with an investment cost of Bt4bn.
This deal will be paid by Right Offering (Bt2.5bn) and banking loan (Bt1.5bn). However, we expect three acquired companies continued to make loss in the next twelve months, there is no accretive value to BGC.
The deal is needed to be approved from the shareholder’s meetings on 15th Dec 2020. Meanwhile, the major shareholder ‘Bangkok Glass’ (owned 72% of BGC) are unable to make vote.
Under our base case scenario (see. Case No.4 on the back page (1) shareholders approve capital raising (2) new three company continue to make equal loss in 2021 as occurred in 2019 and (3) 4% interest rate for  banking loan.), we expect 55% dilution effect  to our EPS’21E forecast and 52% to our existing target price of Bt11.5.
We downgrade our rating  for BGC from BUY to HOLD. As this deal is not finalized yet, we will revise our target price after analysts’ meeting on 17 November 2020.

BGC: Negative View for the Acquisition of the Three Companies

Yesterday analyst meeting came out with a slightly positive tone. We expect 3Q20 performance to grow QoQ and YoY as revenue from packaging business recovery and revenue contribution from power plant business.
<ul>
<li>We expect 3Q20 earnings to grow both YoY and QoQ given revenue from packaging business turn to slightly growth YoY in July 2020 and revenue contribution from power plant business. </li>
<li>Revise down 2020-21E earnings by 9% and 8% to factor in weak sales than our forecast.</li>
<li>Announced a quarterly dividend payment of Bt0.09 (XD on 26 Aug), which is equivalent to 1% dividend yield.</li>
<li>We still like BGC on 1). Secured earnings with attractive dividend yield, 2) Gross margin is in an expansion phase, and 3) Potential growth from M&amp;As.</li>
</ul>
We upgrade to BUY from HOLD rating and roll over target price to Bt11.5 based on 12.3xPE’21E, close to the average for the Asia ex-Japan Materials Sector.

Yesterday analyst meeting came out with a slightly positive tone. We expect 3Q20 performance to grow QoQ and YoY as revenue from packaging business recovery and revenue contribution from power plant business.

We expect 3Q20 earnings to grow both YoY and QoQ given revenue from packaging business turn to slightly growth YoY in July 2020 and revenue contribution from power plant business. 
Revise down 2020-21E earnings by 9% and 8% to factor in weak sales than our forecast.
Announced a quarterly dividend payment of Bt0.09 (XD on 26 Aug), which is equivalent to 1% dividend yield.
We still like BGC on 1). Secured earnings with attractive dividend yield, 2) Gross margin is in an expansion phase, and 3) Potential growth from M&amp;As.

We upgrade to BUY from HOLD rating and roll over target price to Bt11.5 based on 12.3xPE’21E, close to the average for the Asia ex-Japan Materials Sector.

BGC: Re-Opening the Cities Will Drive 2H20 Performance

On the back of 42% earnings recovery in 2021, we maintain our BUY rating and roll over target price to Bt55 (up from previous TP of Bt43) based on 30xPE’21E, the Thai Commerce group.<ul>
<li>Benefit from government stimulus measures.</li>
<li>Expansion phase for Mini BigC still go on.</li>
</ul>We still like this stock for 12-months holding given (1) its strong integrated solid supply chain which allow the company to benefit from industry growth and recovery; (2) growth potential from small stores expansion by double digit growth in the next two years (ie., Mini BigC and BigC Market which currently contribute 15% of total sales).

On the back of 42% earnings recovery in 2021, we maintain our BUY rating and roll over target price to Bt55 (up from previous TP of Bt43) based on 30xPE’21E, the Thai Commerce group.
Benefit from government stimulus measures.
Expansion phase for Mini BigC still go on.
We still like this stock for 12-months holding given (1) its strong integrated solid supply chain which allow the company to benefit from industry growth and recovery; (2) growth potential from small stores expansion by double digit growth in the next two years (ie., Mini BigC and BigC Market which currently contribute 15% of total sales).

Yesterday analyst meeting came out with a positive tone. We maintain our BUY rating with a target price of Bt61 based on DCF, implying 30xPE’20E, close to Thai Commerce group.Key takeaway:We are still confidence with our 2020-21E forecast and target price based on five key earnings drivers.<ul>
<li>New store expansion and SSSG of Mini BigC (SSSG +3% in Jan-Feb 2020).</li>
<li>Cost saving from 67 unprofitable Mini BigC stores closure.</li>
<li>Operating improvement of Packaging Business.</li>
<li>Solid sales volume growth of snack (Tasto Potato Chips) and Tissue (Cellox and Zilk) which is a key “product champions”.</li>
<li>Healthcare &amp; Technical Supply business earnings continues to grow YoY driven by government budget after delayed in 4Q19.</li>
</ul>

Yesterday analyst meeting came out with a positive tone. We maintain our BUY rating with a target price of Bt61 based on DCF, implying 30xPE’20E, close to Thai Commerce group.Key takeaway:We are still confidence with our 2020-21E forecast and target price based on five key earnings drivers.
New store expansion and SSSG of Mini BigC (SSSG +3% in Jan-Feb 2020).
Cost saving from 67 unprofitable Mini BigC stores closure.
Operating improvement of Packaging Business.
Solid sales volume growth of snack (Tasto Potato Chips) and Tissue (Cellox and Zilk) which is a key “product champions”.
Healthcare &amp; Technical Supply business earnings continues to grow YoY driven by government budget after delayed in 4Q19.


BJC: More Positive on Modern Retail Business

Thailand

Berli Jucker PCL is a large Thai conglomerate whose business spans various industries. The Company's operations include the distribution and manufacturing of its own products plus contract distribution and manufacturing for other firms. BJC's core lines of business are packaging, consumer, healthcare, technical and other businesses.

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Berli Jucker (BJC TB)

BJC: Expect SSSG to Bottom Out in 4Q20

We maintain our positive outlook in 2021 earnings driven by improvement of SSSG by 3%YoY in 2021E , recovery in rental income and cost saving from...

Pi Securities PCL, Thailand

BGC: Negative View for the Acquisition of the Three Companies

Negative view for the acquisition of the three companies. We downgrade our rating to HOLD. As this deal is not finalized yet, we will revise our...

Pi Securities PCL, Thailand

BGC: Re-Opening the Cities Will Drive 2H20 Performance

Yesterday analyst meeting came out with a slightly positive tone. We expect 3Q20 performance to grow QoQ and YoY as revenue from packaging business...

Pi Securities PCL, Thailand

BJC: Expected Strong Recovery in 2021

On the back of 42% earnings recovery in 2021, we maintain our BUY rating and roll over target price to Bt55 (up from previous TP of Bt43) based on...

Pi Securities PCL, Thailand

BJC: More Positive on Modern Retail Business

Yesterday analyst meeting came out with a positive tone. We maintain our BUY rating with a target price of Bt61 based on DCF, implying 30xPE’20E,...

Pi Securities PCL, Thailand

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