Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>KTX maintains a Neutral rating and the 12M fair value of Bt24.14, based on the earnings yield and a required rate of return of 4.1% ( vs. Bt22. 65 previously) .</li><li>The valuation metrics suggest that the long- term earnings prospects are strong, with an expected turnaround.</li><li>The current view on the fundamentals is neutral, while the tactical upside risk is very limited.</li></ul>

KTX maintains a Neutral rating and the 12M fair value of Bt24.14, based on the earnings yield and a required rate of return of 4.1% ( vs. Bt22. 65 previously) .The valuation metrics suggest that the long- term earnings prospects are strong, with an expected turnaround.The current view on the fundamentals is neutral, while the tactical upside risk is very limited.

Betagro - Expect 2Q24E Earnings Turnaround; Positive Momentum in 3Q24E

<ul><li>KTX maintains our Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%).</li><li>Our valuation metrics suggest a strong earnings outlook in the long term, with an expected earnings turnaround.</li><li>Meanwhile, the fundamental and tactical views are neutral.</li></ul>

KTX maintains our Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%).Our valuation metrics suggest a strong earnings outlook in the long term, with an expected earnings turnaround.Meanwhile, the fundamental and tactical views are neutral.

Betagro - Expected a Core Loss in 1Q24E Before an Earnings Turnaround in 2H24E

<ul><li>The firm reported losses in 4Q23 and 2023, but the 2024E earnings are forecast to turn around to profit.</li><li>The GPM is expected to improve clearly in 2H24E. However, the recovery outlook in 1H24E is still at risk, as swine prices may remain stable or weaken.</li><li>KTX maintains a Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%).</li></ul>

The firm reported losses in 4Q23 and 2023, but the 2024E earnings are forecast to turn around to profit.The GPM is expected to improve clearly in 2H24E. However, the recovery outlook in 1H24E is still at risk, as swine prices may remain stable or weaken.KTX maintains a Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%).

<ul><li>BTG reported a 2Q23 net loss of Bt351mn, in line with the expectation.</li><li>The net loss in 2Q23 represented an earnings deterioration both YoY and QoQ due to significant YoY and QoQ declines in the gross profit margin (GPM) as well as the QoQ drops in sales.</li><li>Sales declined by 5% YoY and 7% QoQ to Bt26.5bn owing to lower domestic swine prices.</li></ul>

BTG reported a 2Q23 net loss of Bt351mn, in line with the expectation.The net loss in 2Q23 represented an earnings deterioration both YoY and QoQ due to significant YoY and QoQ declines in the gross profit margin (GPM) as well as the QoQ drops in sales.Sales declined by 5% YoY and 7% QoQ to Bt26.5bn owing to lower domestic swine prices.

Earnings Review - Betagro Plc. (BTG) - AUGUST 15, 2023

Thematic (Sector/Industry)

<ul><li>KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.</li><li>This surplus was achieved with imports declining by 1.7% YoY, driven by reduced imports of EVs.</li><li>Concurrently, exports surged to a 14-month high, rising by 7.2% YoY, buoyed by global trade volume trends expected to grow by 2.6% YoY due to easing inflationary pressures.</li></ul>

KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.This surplus was achieved with imports declining by 1.7% YoY, driven by reduced imports of EVs.Concurrently, exports surged to a 14-month high, rising by 7.2% YoY, buoyed by global trade volume trends expected to grow by 2.6% YoY due to easing inflationary pressures.

Economic Update – Exports & Imports - June 24, 2024

Thailand

Thai Union Group Public Company Limited produces and exports frozen and canned seafood products including frozen tuna loin, shrimp and cephalopod. The Company also produces canned pet foods from by products of its seafood process.  Additionally, the Company produces fish snack and canned tuna which are marketed locally.

Sappe Public Company Limited manufactures and distributes health drinks. The Company manufactures dietary and fruit juice drinks. Sappe distributes their products internationally.

President Bakery PCL produces and distributes a wide variety of baked goods to fast food restaurants and convenient stores.  The company also sells its product through its own retail stores under Farmhouse shop and Deliya by Farmhouse.

Ichitan Group PCL operates in the beverage industry. The Company, through its subsidiaries, produces and distributes a variety of tea beverages.

Thaitheparos PCL manufactures food seasoning products including flavor sauce, vinegar, chili sauce, tomato sauce, oyster sauce, chili and tomato sauce, soy sauce, and powdered sauce, under branded names.  The Company also produces canned fruits.

Thai Vegetable Oil Public Company Limited produces and markets soybean cooking oil under its A-ngoon brand name.  Additionally, the Company produced other soybean products including soymeal, full-fat soy, cooked and un-extracted soybeanseed, and lecithin.  Its products are also used in industrial applications such as the production of paint or canned food.

GFPT Public Company Limited produces frozen chicken parts and distributes its products under GFPT, Common Food, and Nichirei Core.  The Company sells its products to domestic and export markets.

Kaset Thai International Sugar Corp PCL produces and distributes sugar to domestic and international clients.  The Company also produces bio products, which are used by-products from sugar production as raw materials, such as paper pulp from bagasse, and, ethanol from molasses and electrical energy from biomass.

Kaset Thai International Sugar Corp (KTIS TB)

Exotic Food Public Company Limited manufactures Thai food products that are sold in independent food stores globally.

Khon Kaen Sugar Industry PCL produces sugar, energy and agricultural products. The Company produces sugar and molasses, fertilizers, ethanol, and electricity.

Xinjiang Tecon Animal Husbandry Bio-Technology Co., Ltd. is engaged in producing and distributing feeds and feed additives. The Company also produces and sells veterinary drugs, agricucutural and milk products.

Xinjiang Tecon Anml Hsbndry Bio Tchnlgy (002100 CH)

Visionox Technology Inc. manufactures electronic components. The Company researches, develops, produces, and sells organic light emitting displays. Visionox Technology markets its products domestically and overseas.

Star Lake Bioscience Co., Inc. Zhaoqing Guangdong manufactures and markets biochemical pharmaceuticals and seasoning products, including inosine medicines, L-proline medicines, monosodium glutamate and other related products.  The Company also operates in real estate development.

Starlake Bioscience Co Inc Zhqng Gngdng (600866 CH)

Yunnan Energy Investment CO.,LTD manufactures and distributes chemical products. The Company produces table salt, industrial salt, glauber salt, and other related products. Yunnan Energy Investment also participates in the natural gas industry.

Yunnan Salt & Chemical Industry Co., (002053 CH)

Hunan New Wellful Co., Ltd. operates pig farms and trades pigs. The Company exports pigs to Hong Kong and Macau as well as sells them domestically.

ARIAKE JAPAN Co., Ltd. produces natural seasonings and flavorings from meat products.  The Company sells the products to major food makers such as Ajinomoto Co., Ltd. and Myojo Foods Co., Ltd.  Ariake also has a plant in the United States.

Shree Renuka Sugars Limited is an integrated manufacturing company with a focus on sugar, distillery products and ethanol. The Company also generates power which is used for captive consumption besides being sold externally.

Del Monte Pacific Limited produces and markets packaged vegetable and fruit, beverage and culinary products. The Group has the exclusive right to use the Del Monte brand for packaged products in the USA, South America, Philippines, the Indian subcontinent and Myanmar, and the S&W brand for both packaged and fresh products globally except Australia and New Zealand.

Great Wall Enterprise Co., Ltd. produces and markets livestock feeds, cooking oils, and meat products.

Ottogi Corporation manufactures food seasonings and instant food, such as mayonnaise, ketchup, salad dressing, sesame and cooking oils, and instant curry. The Company also produces frozen salads, fruit preservatives, instant noodles, and canned tuna.

Betagro Public Company Limited manufactures agricultural food products. The Company offers animal feed, raises livestock, produces animal health products, and markets meat products for human consumption. Betagro serves customers worldwide.

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Betagro (BTG TB)

Betagro - Expect 2Q24E Earnings Turnaround; Positive Momentum in 3Q24E

KTX maintains a Neutral rating and the 12M fair value of Bt24.14, based on the earnings yield and a required rate of return of 4.1% ( vs. Bt22. 65...

Krungthai XSpring

Betagro - Expected a Core Loss in 1Q24E Before an Earnings Turnaround in 2H24E

KTX maintains our Neutral rating (FV = Bt22.76, based on the earnings yield and a required rate of return of 3.6%). Our valuation metrics suggest a...

Krungthai XSpring

Betagro -In- Line 4Q23 and 2023 Earnings

The GPM is expected to improve clearly in 2H24E. However, the recovery outlook in 1H24E is still at risk, as swine prices may remain stable or weaken.

Krungthai XSpring

Earnings Review - Betagro Plc. (BTG) - AUGUST 15, 2023

The net loss in 2Q23 represented an earnings deterioration both YoY and QoQ due to significant YoY and QoQ declines in the gross profit margin...

Krungthai XSpring

Economic Update – Exports & Imports - June 24, 2024

KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.

Krungthai XSpring

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