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

JUBILE reported 2Q19 net profit of Bt67m (+37%YoY, +26%QoQ), the record level and better than our expectation.  <ul>
<li>YoY growth was driven by 15%YoY growth in sales to Bt487m and margin expansion to 44.6% from 42.9% in 2Q18. Meanwhile, SSSG at 4.5%, branch expansion at 4.5% and special events are main contributor to sales growth. Overall, 1H19 net profit was Bt119m (+25%YoY) driven mainly by SSSG.</li>
<li>We expect 3Q19 earnings to grow both YoY and QoQ backed by strong SSSG momentum.</li>
<li>Announced an interim dividend payment of Bt0.42 (XD on 21 Aug), which is equivalent to 2.5% dividend yield.</li>
</ul>We maintain our BUY rating and roll over our target price to Bt24 based on 15xPE’20E. Our rating reflect our positive view toward its 2019-21 outlook driven by CRM implementation in selling and marketing plan and new product launches.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/910/original/Picture1.jpg?1565928901" class="editor-image img-responsive" data-smartkarma-image-id="95910"></figure><div class="content-caption">Sources: CGS Research, company data</div>

JUBILE reported 2Q19 net profit of Bt67m (+37%YoY, +26%QoQ), the record level and better than our expectation.  
YoY growth was driven by 15%YoY growth in sales to Bt487m and margin expansion to 44.6% from 42.9% in 2Q18. Meanwhile, SSSG at 4.5%, branch expansion at 4.5% and special events are main contributor to sales growth. Overall, 1H19 net profit was Bt119m (+25%YoY) driven mainly by SSSG.
We expect 3Q19 earnings to grow both YoY and QoQ backed by strong SSSG momentum.
Announced an interim dividend payment of Bt0.42 (XD on 21 Aug), which is equivalent to 2.5% dividend yield.
We maintain our BUY rating and roll over our target price to Bt24 based on 15xPE’20E. Our rating reflect our positive view toward its 2019-21 outlook driven by CRM implementation in selling and marketing plan and new product launches.Sources: CGS Research, company data

We initiate coverage of BJC with a BUY rating and a target price of Bt61, derived from a DCF methodology (WACC 7.2% and terminal growth of 1%), implying 30xPE’20E, or a 28% premium to the Thai Consumer Staples Sector. 
The story:
<ul>
<li>Securing market position via hypermarket expansion</li>
<li>Aggressive opening of Mini BigCs will support long-term sustainable growth</li>
<li>Government policy will be a key catalyst to boost SSSG</li>
<li>Expect packaging earnings to recover in 2H19</li>
</ul>
Risks:
<ul>
<li>Economic slowdown</li>
<li>FX &amp; raw material price fluctuation</li>
<li>Household debt to GDP remains high at roughly 80%, suggesting low purchasing power.</li>
</ul>
Background: Berli Jucker Public Company Limited (BJC) was founded in 1882 by Albert Jucker and Henry Sigg. The company has four core businesses including packaging, consumer, healthcare and technical and modern retail supply chain. BJC provides a wide range of products under its own brands and customers’ bands (OEM) for the domestic and international markets. In 2001, Thai Charoen Corporation (TCC), under the leadership of Charoen and Wanna Sirivadhanabhakdi, became the majority shareholders of the company. In 2016 BJC acquired BigC Supercenter, which is the second-largest hypermarket operator in Thailand.

We initiate coverage of BJC with a BUY rating and a target price of Bt61, derived from a DCF methodology (WACC 7.2% and terminal growth of 1%), implying 30xPE’20E, or a 28% premium to the Thai Consumer Staples Sector. 
The story:

Securing market position via hypermarket expansion
Aggressive opening of Mini BigCs will support long-term sustainable growth
Government policy will be a key catalyst to boost SSSG
Expect packaging earnings to recover in 2H19

Risks:

Economic slowdown
FX &amp; raw material price fluctuation
Household debt to GDP remains high at roughly 80%, suggesting low purchasing power.

Background: Berli Jucker Public Company Limited (BJC) was founded in 1882 by Albert Jucker and Henry Sigg. The company has four core businesses including packaging, consumer, healthcare and technical and modern retail supply chain. BJC provides a wide range of products under its own brands and customers’ bands (OEM) for the domestic and international markets. In 2001, Thai Charoen Corporation (TCC), under the leadership of Charoen and Wanna Sirivadhanabhakdi, became the majority shareholders of the company. In 2016 BJC acquired BigC Supercenter, which is the second-largest hypermarket operator in Thailand.

BJC: Solid Supply Chain in the 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)

JUBILE: 2Q19 Earnings Hit a Record Level

JUBILE reported 2Q19 net profit of Bt67m (+37%YoY, +26%QoQ), the record level and better than our expectation. YoY growth was driven by 15%YoY...

Pi Securities PCL, Thailand

BJC: Solid Supply Chain in the Retail Business

We initiate coverage of BJC with a BUY rating and a target price of Bt61, derived from a DCF methodology (WACC 7.2% and terminal growth of 1%),...

Pi Securities PCL, Thailand

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