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

<p><strong>BTS report FY1Q22 (April’21-June’21) net profit at Bt1.4bn (+212%YoY -18%QoQ), stripping out extra items, core earnings would be at Bt1.0bn (+126%YoY +105%QoQ). The result was above our expectation while accounts for 43% of full-year forecast.</strong></p><div>• YoY surge in profit supported by a recovery in equity income as there was a heavy write-off from U-city in FY1Q21 and O&amp;M revenue from Northern Green-line Extension (kicked of Dec’20). QoQ recovery was mainly due to an absence of MACO’s heavy expense in FY4Q21 and  improving U-city performance.</div><div></div><div>• We expect core earnings in 2QFY22 (July’21-Sep’21) to drop QoQ as we anticipate performance for BTSGIF and hospitality business under U-City to remain weak as a result from city lockdown. However, we expect a YoY recovery due to an O&amp;M revenue recognition, which obtained high margin.</div><div></div><div>• Revise earnings forecast down in FY2022 and FY2023 by 23% and 11%</div><div></div><div><strong>We reiterate a BUY rating for BTS with a new the target price of Bt10.20 (Previous TP:Bt11.20), derived from SOTP. TP cut was due to earnings downgrade and VGI’s target price cut.</strong></div>

BTS report FY1Q22 (April’21-June’21) net profit at Bt1.4bn (+212%YoY -18%QoQ), stripping out extra items, core earnings would be at Bt1.0bn (+126%YoY +105%QoQ). The result was above our expectation while accounts for 43% of full-year forecast.• YoY surge in profit supported by a recovery in equity income as there was a heavy write-off from U-city in FY1Q21 and O&amp;M revenue from Northern Green-line Extension (kicked of Dec’20). QoQ recovery was mainly due to an absence of MACO’s heavy expense in FY4Q21 and  improving U-city performance.• We expect core earnings in 2QFY22 (July’21-Sep’21) to drop QoQ as we anticipate performance for BTSGIF and hospitality business under U-City to remain weak as a result from city lockdown. However, we expect a YoY recovery due to an O&amp;M revenue recognition, which obtained high margin.• Revise earnings forecast down in FY2022 and FY2023 by 23% and 11%We reiterate a BUY rating for BTS with a new the target price of Bt10.20 (Previous TP:Bt11.20), derived from SOTP. TP cut was due to earnings downgrade and VGI’s target price cut.

BTS: Earnings Performance Rely Chiefly on Progress of Vaccination

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

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

<p><a href="https://www.smartkarma.com/entities/comfortdelgro-corp-ltd" target="_blank" data-smartkarma-citation="entities:497:1" rel="noopener">Comfortdelgro Corp (CD SP)</a>is back to profit after a gruelling 1 year navigating around the COVID-19 situation in Singapore and their other geographical presence around the world. As Singapore hit a high vaccination rate, there is a lot of potential for further restrictions relaxation that will increase mobility in the country, which will increase ridership in Singapore. </p>
<p>The Australian's business IPO could unlock the value for ComfortDelgro to <strong>double</strong> from the current market capitalization that makes it even sweeter to own Comfortdelgro. </p>

Comfortdelgro Corp (CD SP)is back to profit after a gruelling 1 year navigating around the COVID-19 situation in Singapore and their other geographical presence around the world. As Singapore hit a high vaccination rate, there is a lot of potential for further restrictions relaxation that will increase mobility in the country, which will increase ridership in Singapore. 
The Australian's business IPO could unlock the value for ComfortDelgro to double from the current market capitalization that makes it even sweeter to own Comfortdelgro. 

Comfortdelgro (CD): Reopening and Australia IPO

<p><strong>We expect BTS’s core earnings to gradually recover from late 2QFY22 (July’21-Sep’21) onwards when majority of Bangkok commuters received vaccines after the rollout program that already kicked off on 7th June. We reiterate a BUY rating for BTS with a new the target price of Bt11.20 (Previous TP:Bt11.50), derived from SOTP. Target price cut was due to a reduction in VGI holding stake and earnings downgrade.</strong></p><div>• We expect core earnings in 1QFY22 (April’21-June’21) to drop QoQ as we anticipate performance for BTSGIF and media business under VGI to remain subdue after 3rd wave of Covid-19 emerged. However, YoY recovery is due to low base of media revenue and U City’s share of loss in 1QFY21.</div><div></div><div>• Revise earnings forecast down in FY2022 and FY2023 by 3% and 22%</div><div></div><p><strong>BTS’s long-term earnings growth profile remain intact supported by farebox revenue from secured Yellow-Pink lines (Expect partial COD in March’22), revenue recognition of new Ads assets on expanded mass transit gridlines under VGI, profit sharing from U-tapao int. airport (Expect COD in FY2025), and, upside from Orange line (expect project to be awarded by end of 2021.</strong></p>

We expect BTS’s core earnings to gradually recover from late 2QFY22 (July’21-Sep’21) onwards when majority of Bangkok commuters received vaccines after the rollout program that already kicked off on 7th June. We reiterate a BUY rating for BTS with a new the target price of Bt11.20 (Previous TP:Bt11.50), derived from SOTP. Target price cut was due to a reduction in VGI holding stake and earnings downgrade.• We expect core earnings in 1QFY22 (April’21-June’21) to drop QoQ as we anticipate performance for BTSGIF and media business under VGI to remain subdue after 3rd wave of Covid-19 emerged. However, YoY recovery is due to low base of media revenue and U City’s share of loss in 1QFY21.• Revise earnings forecast down in FY2022 and FY2023 by 3% and 22%BTS’s long-term earnings growth profile remain intact supported by farebox revenue from secured Yellow-Pink lines (Expect partial COD in March’22), revenue recognition of new Ads assets on expanded mass transit gridlines under VGI, profit sharing from U-tapao int. airport (Expect COD in FY2025), and, upside from Orange line (expect project to be awarded by end of 2021.

BTS: Business Outlook Rely Chiefly on Progress of Vaccination

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The SET50 Index is one of the very few indices that is still weighted by full market cap. Stocks need to have a minimum free float of 20% to be eligible for index inclusion but the free float is not used to determine the weight of the stock in the index.</p><p>This had led to stocks with low free floats having an inordinately high weight in the index. The most recent case in point was <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> - the stock was an inclusion in the SET50 index at the December review. DELTA is now the third largest stock in the index with a 6.07% weighting, even though the SET free float of the stock is only 22.35%. The stock has jumped 1000% over the last year.</p><p>Media reports now indicate that there are changes brewing that could result in the SET revising the calculation methodology to more accurately determine the free float of stocks, and a change to the calculation methodology of the SET50 Index that would see it move from a full market cap weighted index to a free float market cap weighted index.</p><p>In this Insight, we take a look at the stocks that would be affected by the changes and the impact of passive fund trading on the stocks.</p>

The SET50 Index is one of the very few indices that is still weighted by full market cap. Stocks need to have a minimum free float of 20% to be eligible for index inclusion but the free float is not used to determine the weight of the stock in the index.This had led to stocks with low free floats having an inordinately high weight in the index. The most recent case in point was Delta Electronics Thai (DELTA TB) - the stock was an inclusion in the SET50 index at the December review. DELTA is now the third largest stock in the index with a 6.07% weighting, even though the SET free float of the stock is only 22.35%. The stock has jumped 1000% over the last year.Media reports now indicate that there are changes brewing that could result in the SET revising the calculation methodology to more accurately determine the free float of stocks, and a change to the calculation methodology of the SET50 Index that would see it move from a full market cap weighted index to a free float market cap weighted index.In this Insight, we take a look at the stocks that would be affected by the changes and the impact of passive fund trading on the stocks.

SET50 Index: Change to Free Float Weighting In the Works?

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

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<p>Back on the 18 March, <a href="https://www.smartkarma.com/entities/kerry-logistics-network-ltd" target="_blank" data-smartkarma-citation="entities:367:1" rel="noopener">Kerry Logistics Network (636 HK)</a> (KLN) <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2019/0318/LTN20190318261.pdf" target="_blank" rel="noopener">announced</a> the possible spin-off and separate listing of 63%-held Kerry Express (Thailand) (KET) on the stock exchange of Thailand. KET is principally engaged in the business of express delivery business in Thailand. </p>
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<p>A strategic partnership was established with GI Global Media Public, a subsidiary of <a href="https://www.smartkarma.com/entities/15943" target="_blank" data-smartkarma-citation="entities:15943:1" rel="noopener">BTS Group Holdings (BTS TB)</a>, <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2018/0424/LTN20180424095.pdf" target="_blank" rel="noopener">in July 2018</a>. GI Global paid THB5.9bn (HK$1.475bn) for 23% of KIT, implying a then market value of $6.4bn,  or ~HK$4bn for KLN's 63% stake.</p>
<p>Details of KET's December listing have now been issued - all <a href="https://market.sec.or.th/public/ipos/IPOSEQ01.aspx?TransID=305545" target="_blank" rel="noopener">relevant information</a> is in Thai. That stake in KET is now worth ~50% more, if using the mid-point of the IPO range. </p>
<p>More below the fold.</p>
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Back on the 18 March, Kerry Logistics Network (636 HK) (KLN) announced the possible spin-off and separate listing of 63%-held Kerry Express (Thailand) (KET) on the stock exchange of Thailand. KET is principally engaged in the business of express delivery business in Thailand. 


A strategic partnership was established with GI Global Media Public, a subsidiary of BTS Group Holdings (BTS TB), in July 2018. GI Global paid THB5.9bn (HK$1.475bn) for 23% of KIT, implying a then market value of $6.4bn,  or ~HK$4bn for KLN's 63% stake.
Details of KET's December listing have now been issued - all relevant information is in Thai. That stake in KET is now worth ~50% more, if using the mid-point of the IPO range. 
More below the fold.





Kerry Logistics (636 HK): Kerry Express' Spin-Off

Thailand

BTS Group Holdings PCL is primarily in the business of Mass Transit.  The Company operates Bangkok's BTS SkyTrain system and the Bus Rapid Transit (BRT) System. BTS Group Holdings PCL is also involved in Media & Advertising, Property Development, and Services business.

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BTS Group Holdings (BTS TB)

BTS: Earnings Performance Rely Chiefly on Progress of Vaccination

BTS report FY1Q22 (April’21-June’21) net profit at Bt1.4bn (+212%YoY -18%QoQ), stripping out extra items, core earnings would be at Bt1.0bn...

Pi Securities PCL, Thailand

Comfortdelgro (CD): Reopening and Australia IPO

The Australian's business IPO could unlock the value for ComfortDelgro to double from the current market that makes it even sweeter to own...

Henry Soediarko

BTS: Business Outlook Rely Chiefly on Progress of Vaccination

We expect BTS’s core earnings to gradually recover from late 2QFY22 (July’21-Sep’21) onwards when majority of Bangkok commuters received vaccines...

Pi Securities PCL, Thailand

SET50 Index: Change to Free Float Weighting In the Works?

There is a strong possibility that the SET revises the calculation methodology to more accurately determine the free float of stocks, and changes...

Brian Freitas

Kerry Logistics (636 HK): Kerry Express' Spin-Off

Expect strong retail and institutional interest in KET, as e-commerce fuels the strong growth in the logistics sector, as this is the final...

David Blennerhassett

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