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

Pi Research

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

BG Container Glass PCL / Equity Bottom-Up

We initiate coverage of <a href="https://www.smartkarma.com/entities/bg-container-glass-pcl" target="_blank" data-smartkarma-citation="entities:28453:1" rel="noopener">BG Container Glass PCL (BGC TB)</a> with a BUY rating, based on a target price of Bt11.0, which is derived from 12.3xPE’20E, close to the average for the Asia ex-Japan Materials Sector.
The story:
<ul>
<li>Secured earnings with attractive dividend yield</li>
<li>Gross margin is in an expansion phase</li>
<li>Potential growth from M&amp;As</li>
</ul>
Risks:
<ul>
<li>Raw material price fluctuation</li>
<li>Reliance on a few major customers</li>
<li>New innovative liquid container products</li>
</ul>
Background: BGC, a subsidiary of Bangkok Glass Public Company Limited, operates in the glass packaging business. The firm was established in 1974 and started production in Pathumthani in 1980. BGC is one of the largest glass container manufacturers in the ASEAN region with five glass packaging plants in Ayutthaya, Pathumthani, Khon Kaen, Prachinburi and Ratchaburi. Its combined maximum production capacity is 3,495 tons per day.

We initiate coverage of BG Container Glass PCL (BGC TB) with a BUY rating, based on a target price of Bt11.0, which is derived from 12.3xPE’20E, close to the average for the Asia ex-Japan Materials Sector.
The story:

Secured earnings with attractive dividend yield
Gross margin is in an expansion phase
Potential growth from M&amp;As

Risks:

Raw material price fluctuation
Reliance on a few major customers
New innovative liquid container products

Background: BGC, a subsidiary of Bangkok Glass Public Company Limited, operates in the glass packaging business. The firm was established in 1974 and started production in Pathumthani in 1980. BGC is one of the largest glass container manufacturers in the ASEAN region with five glass packaging plants in Ayutthaya, Pathumthani, Khon Kaen, Prachinburi and Ratchaburi. Its combined maximum production capacity is 3,495 tons per day.

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

In this next part of a Smartkarma Originals Series on ASEAN Retail, we look at Thailand and specifically two companies including <a href="https://www.smartkarma.com/entities/cp-all-pcl" target="_blank" data-smartkarma-citation="entities:13889:1" rel="noopener">CP All PCL (CPALL TB), </a>the operator of over 11,600 7Eleven stores in the country, as well as cash &amp; carry operator Makro and, <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB),</a> a relative newcomer and owner of number two hypermarket operator Big C Supercentre.
In this report, we take a deep dive into both <a href="https://www.smartkarma.com/entities/cp-all-pcl" target="_blank" data-smartkarma-citation="entities:13889:1" rel="noopener">CP All PCL (CPALL TB)</a> and <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> having had face to face meetings with the management of both companies in Thailand, as well as visiting a number of their stores in Bangkok.
Both companies are pushing forward with innovative strategies in their own sub-segments, with <a href="https://www.smartkarma.com/entities/cp-all-pcl" target="_blank" data-smartkarma-citation="entities:13889:1" rel="noopener">CP All PCL (CPALL TB)</a> gradually increasing the size of its convenience store offering and adding to the services side of its revenue mix. It is also exploring some higher-end offerings, with a greater range of ready-to-eat options in a new clean shiny environment.  
Big C rapidly pushing out it's Mini Big C offering, with larger size convenience stores, more like mini-markets, targetting top-up shoppers in residential areas. It has also introduced a new Big C Food Place concept targetting more affluent customers in urban areas. Its other major business is consumer packaging and consumer supply chain, which are stable growth businesses with significant synergies with its retail business. The company's aluminium can business has growth potential given a switch from other packaging mediums to cans.
The other major player in Thailand is TESCO through its TESCO Lotus stores. It operates around 400 supermarkets and hypermarkets and 1,500  Tesco Express convenience stores and recent newsflow suggest that it is looking to sell those assets together with its 74 Malaysian stores for a price tag of US$9bn.
A potential front-runner to buy those assets is <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB),</a> which would further transform that company's business towards being a purer retail play and the number one player in the hypermarket space by a significant margin. Should this transaction take place, it would likely narrow the valuation gap between the two players, though <a href="https://www.smartkarma.com/entities/cp-all-pcl" target="_blank" data-smartkarma-citation="entities:13889:1" rel="noopener">CP All PCL (CPALL TB),</a> would likely continue to trade at a premium, given its higher ROE and pure retail status.
In terms of upside, both companies look attractive versus there 3-year average PER multiples. <a href="https://www.smartkarma.com/entities/cp-all-pcl" target="_blank" data-smartkarma-citation="entities:13889:1" rel="noopener">CP All PCL (CPALL TB)</a> trades on a forward PER of 25.9x FY20E versus a three year average PER multiple of 29.4x implying upside of 13.5% or a target price of THB85.00. <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> looks even more attractive, trading on a forward PER of 21.8x versus a 3-year mean forward PER of 30x implying upside of 37% to a target price of THB56.70.

In this next part of a Smartkarma Originals Series on ASEAN Retail, we look at Thailand and specifically two companies including CP All PCL (CPALL TB), the operator of over 11,600 7Eleven stores in the country, as well as cash &amp; carry operator Makro and, Berli Jucker (BJC TB), a relative newcomer and owner of number two hypermarket operator Big C Supercentre.
In this report, we take a deep dive into both CP All PCL (CPALL TB) and Berli Jucker (BJC TB) having had face to face meetings with the management of both companies in Thailand, as well as visiting a number of their stores in Bangkok.
Both companies are pushing forward with innovative strategies in their own sub-segments, with CP All PCL (CPALL TB) gradually increasing the size of its convenience store offering and adding to the services side of its revenue mix. It is also exploring some higher-end offerings, with a greater range of ready-to-eat options in a new clean shiny environment.  
Big C rapidly pushing out it's Mini Big C offering, with larger size convenience stores, more like mini-markets, targetting top-up shoppers in residential areas. It has also introduced a new Big C Food Place concept targetting more affluent customers in urban areas. Its other major business is consumer packaging and consumer supply chain, which are stable growth businesses with significant synergies with its retail business. The company's aluminium can business has growth potential given a switch from other packaging mediums to cans.
The other major player in Thailand is TESCO through its TESCO Lotus stores. It operates around 400 supermarkets and hypermarkets and 1,500  Tesco Express convenience stores and recent newsflow suggest that it is looking to sell those assets together with its 74 Malaysian stores for a price tag of US$9bn.
A potential front-runner to buy those assets is Berli Jucker (BJC TB), which would further transform that company's business towards being a purer retail play and the number one player in the hypermarket space by a significant margin. Should this transaction take place, it would likely narrow the valuation gap between the two players, though CP All PCL (CPALL TB), would likely continue to trade at a premium, given its higher ROE and pure retail status.
In terms of upside, both companies look attractive versus there 3-year average PER multiples. CP All PCL (CPALL TB) trades on a forward PER of 25.9x FY20E versus a three year average PER multiple of 29.4x implying upside of 13.5% or a target price of THB85.00. Berli Jucker (BJC TB) looks even more attractive, trading on a forward PER of 21.8x versus a 3-year mean forward PER of 30x implying upside of 37% to a target price of THB56.70.

Thailand: A Two-Player Retail Market? - CPALL and Berli Jucker

Thailand

BG Container Glass Public Company Limited manufactures and sells packaging products. The Company offers glass and crate containers, polyethylene terephthalate bottles, plastic closures, boxes, caps, and corrugated cartons. BG Container Glass serves customers in Thailand.

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BG Container Glass PCL (BGC TB)

BGC: Stable Yield Play

We initiate coverage of BG Container Glass PCL (BGC TB) with a BUY rating, based on a target price of Bt11.0, which is derived from 12.3xPE’20E,...

Pi Securities PCL, Thailand

Thailand: A Two-Player Retail Market? - CPALL and Berli Jucker

In this next part of a Smartkarma Originals Series on ASEAN Retail, we look at Thailand and specifically two companies including CP All PCL (CPALL...

Angus Mackintosh

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