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

Last week analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt110 based on 33xPE’20E, close to the Thai Beverage peers. Our rating reflects its 2020-21E growth outlook driven by expanding customer base through new drinks product, potential growth from overseas markets and the ample room to expand its gross profit margin.Key takeaway:<ul>
<li>New S-Curve from new product (WOODY C+ LOCK). Management targets C+ Lock of 100 million bottles in 2020 or roughly 6%-8% of our 2020 revenue forecast.</li>
<li>Bright outlook in CLMV energy drinks. Cambodia and Myanmar were two main contributors to 36% sales growth of CLMV in 1Q20. We expect CLMV sales to grow 20% in 2020E.</li>
<li>Cost saving plan. We expect new packaging factory to begin operation by 4Q20. From management guidance, this project should have cost-saving roughly Bt200m/years or roughly 5% of our 2021 earnings forecast.</li>
</ul>

Last week analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt110 based on 33xPE’20E, close to the Thai Beverage peers. Our rating reflects its 2020-21E growth outlook driven by expanding customer base through new drinks product, potential growth from overseas markets and the ample room to expand its gross profit margin.Key takeaway:
New S-Curve from new product (WOODY C+ LOCK). Management targets C+ Lock of 100 million bottles in 2020 or roughly 6%-8% of our 2020 revenue forecast.
Bright outlook in CLMV energy drinks. Cambodia and Myanmar were two main contributors to 36% sales growth of CLMV in 1Q20. We expect CLMV sales to grow 20% in 2020E.
Cost saving plan. We expect new packaging factory to begin operation by 4Q20. From management guidance, this project should have cost-saving roughly Bt200m/years or roughly 5% of our 2021 earnings forecast.


We upgrade from HOLD to BUY rating with a new target price of Bt110 based on 33xPE’20E (Previous TP is Bt89), close to the average of the Thailand Beverage group. Our rating reflect its 2020-21E growth outlook driven by expanding customer base through new energy drink product, potential growth from overseas markets and the ample room to expand its gross profit margin.
The story: <a href="https://www.smartkarma.com/entities/carabao-group-pcl" target="_blank" data-smartkarma-citation="entities:12027:1" rel="noopener">Carabao Group (CBG TB)</a> 
<ul>
<li>Sales growth amid COVID-19 outbreak.</li>
<li>CBG aluminum can factory run full capacity among pandemic crisis.</li>
<li>Revised up 2020-21E earnings forecast by 24% and 26%, respectively.</li>
</ul>

We upgrade from HOLD to BUY rating with a new target price of Bt110 based on 33xPE’20E (Previous TP is Bt89), close to the average of the Thailand Beverage group. Our rating reflect its 2020-21E growth outlook driven by expanding customer base through new energy drink product, potential growth from overseas markets and the ample room to expand its gross profit margin.
The story: Carabao Group (CBG TB) 

Sales growth amid COVID-19 outbreak.
CBG aluminum can factory run full capacity among pandemic crisis.
Revised up 2020-21E earnings forecast by 24% and 26%, respectively.


CBG: The Best Pick Amid COVID-19 Outbreak

We initiate coverage of CBG with a HOLD rating, based on a target price of Bt89, which is derived from 33xPE’20E, close to the average of the Thailand Beverage group.
The story:
<ul>
<li>Expanding customer base through new energy drink product</li>
<li>Potential growth from overseas markets</li>
<li>Ample room to improve gross profit margin</li>
<li>ICUK group turnaround</li>
<li>Benefit from growth of global energy drinks market</li>
</ul>
Risks:
<ul>
<li>Raw material price fluctuation</li>
<li>Exchange rate fluctuation</li>
<li>Highly competitive industry</li>
</ul>
Background: Carabao Group Public Company Limited (CBG) was established and incorporated on Aug. 22, 2001. CBG engages in manufacturing, marketing, selling and distributing energy drinks and other beverages in a vertically integrated manner starting with upstream production of key packaging materials, i.e. glass bottles and aluminum cans, down the chain to the bottling and canning of finished products as well as distribution-channel management both domestically and internationally. Moreover, the company has expanded its operation into Europe, most notably the UK.

We initiate coverage of CBG with a HOLD rating, based on a target price of Bt89, which is derived from 33xPE’20E, close to the average of the Thailand Beverage group.
The story:

Expanding customer base through new energy drink product
Potential growth from overseas markets
Ample room to improve gross profit margin
ICUK group turnaround
Benefit from growth of global energy drinks market

Risks:

Raw material price fluctuation
Exchange rate fluctuation
Highly competitive industry

Background: Carabao Group Public Company Limited (CBG) was established and incorporated on Aug. 22, 2001. CBG engages in manufacturing, marketing, selling and distributing energy drinks and other beverages in a vertically integrated manner starting with upstream production of key packaging materials, i.e. glass bottles and aluminum cans, down the chain to the bottling and canning of finished products as well as distribution-channel management both domestically and internationally. Moreover, the company has expanded its operation into Europe, most notably the UK.

CBG: Valuation Running Ahead of Fundamentals

Thailand

Carabao Group PCL, through its subsidiary, manufactures and distributes energy drinks.

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Carabao Group (CBG TB)

CBG: C+ LOCK Would Be a New S-Curve

Last week analyst meeting came out with a positive tone. We maintain BUY rating with a target price of Bt110 based on 33xPE’20E, close to the Thai...

Pi Securities PCL, Thailand

CBG: The Best Pick Amid COVID-19 Outbreak

We upgrade from HOLD to BUY rating with a new target price of Bt110 based on 33xPE’20E (Previous TP is Bt89), close to the average of the Thailand...

Pi Securities PCL, Thailand

CBG: Valuation Running Ahead of Fundamentals

We initiate coverage of CBG with a HOLD rating, based on a target price of Bt89, which is derived from 33xPE’20E, close to the average of the...

Pi Securities PCL, Thailand

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