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

<ul>
<li>CENTEL report 3Q22 net loss in 3Q22 at Bt78m. Stripping out extra items mainly from unrealized foreign exchange loss on foreign currency loans, core profit should be at Bt27m compared </li>
<li>Solid recovery in hospitality business as expected Hotel revenue hit ten quarter high at Bt1.5bn on the back of strong demand for hotels in Thailand where RevPar for Bangkok hotels</li>
<li>Food revenue hit 11 quarter high at Bt2.9bn (+52%YoY+2%QoQ) as SSSG expanded 43% compared with -30% and +19% in 3Q21 and 2Q22 respectively. This will be supported by pent-up demand</li>
</ul>


CENTEL report 3Q22 net loss in 3Q22 at Bt78m. Stripping out extra items mainly from unrealized foreign exchange loss on foreign currency loans, core profit should be at Bt27m compared 
Solid recovery in hospitality business as expected Hotel revenue hit ten quarter high at Bt1.5bn on the back of strong demand for hotels in Thailand where RevPar for Bangkok hotels
Food revenue hit 11 quarter high at Bt2.9bn (+52%YoY+2%QoQ) as SSSG expanded 43% compared with -30% and +19% in 3Q21 and 2Q22 respectively. This will be supported by pent-up demand


CENTEL : 3Q22 Missed Our and Market Estimates but Expect 4Q22 Profit to Be Solid

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.

Thematic (Sector/Industry)

<ul><li>Global fund managers still suggest increasing holdings of safe-haven assets, such as cash, or investing in sectors with recurring income, notably utilities and health care stocks, while they are bearish on risk assets and global growth in the next 12 months.</li><li>Investors also repriced their expectations regarding the terminal fed funds rate in 1Q23 by 50 bps higher.</li><li>However, we expect the Thai market to see a limited impact from the bearishness thanks to the good earnings recovery momentum, in contrast to global economies, as well as the boost from the huge growth in the number of tourist arrivals from 400k in 2021 to an expected 21mn in 2023E.</li></ul>

Global fund managers still suggest increasing holdings of safe-haven assets, such as cash, or investing in sectors with recurring income, notably utilities and health care stocks, while they are bearish on risk assets and global growth in the next 12 months.Investors also repriced their expectations regarding the terminal fed funds rate in 1Q23 by 50 bps higher.However, we expect the Thai market to see a limited impact from the bearishness thanks to the good earnings recovery momentum, in contrast to global economies, as well as the boost from the huge growth in the number of tourist arrivals from 400k in 2021 to an expected 21mn in 2023E.

<ul>
<li>Maintain BUY recommendation for CENTEL with a new target price of Bt56.0 (Previous TP:Bt49)after revised earnings up by 15-42%in 2022-23E following an impressive recovery for the company’s Thai hotel portfolio.</li>
<li>Impressive recovery in hospitality business.We expect hotel revenue to hit ten quarter high at Bt1.5bn mainly driven by strong demand for Thai hotels as RevPar for Bangkok hotels is expected</li>
<li>Food revenue should hit 11 quarter high at Bt3.0bn (+51%YoY+4%QoQ) as we assume SSSG at 36% compared with -25% and 25% in 3Q21 and 2Q22 respectively</li>
</ul>


Maintain BUY recommendation for CENTEL with a new target price of Bt56.0 (Previous TP:Bt49)after revised earnings up by 15-42%in 2022-23E following an impressive recovery for the company’s Thai hotel portfolio.
Impressive recovery in hospitality business.We expect hotel revenue to hit ten quarter high at Bt1.5bn mainly driven by strong demand for Thai hotels as RevPar for Bangkok hotels is expected
Food revenue should hit 11 quarter high at Bt3.0bn (+51%YoY+4%QoQ) as we assume SSSG at 36% compared with -25% and 25% in 3Q21 and 2Q22 respectively


CENTEL : Positive Earnings Growth Momentum from 2H22 to 2023E

<ul><li>The Global Fund Manager Survey in October reconfirms a bear market atmosphere due to concerns over a global economic slowdown, which is prompting investors to overweight cash and underweight equities.</li><li>While the Thai market has not escaped being impacted by the bearishness as evidenced from the net selling by foreign investors and the weaker baht amid the stronger USD, we still hold a positive view thanks to the outlook for a more outstanding recovery in Thailand than other countries, based on the upward revision to the World Bank’s 2022E GDP projection from +2.9% to +3.1% YoY.</li><li>We maintain our recommendation for stocks under the reopening theme that should benefit from the peak seasons for spending and tourism. </li></ul>

The Global Fund Manager Survey in October reconfirms a bear market atmosphere due to concerns over a global economic slowdown, which is prompting investors to overweight cash and underweight equities.While the Thai market has not escaped being impacted by the bearishness as evidenced from the net selling by foreign investors and the weaker baht amid the stronger USD, we still hold a positive view thanks to the outlook for a more outstanding recovery in Thailand than other countries, based on the upward revision to the World Bank’s 2022E GDP projection from +2.9% to +3.1% YoY.We maintain our recommendation for stocks under the reopening theme that should benefit from the peak seasons for spending and tourism. 

Special Report: Global Fund Manager Survey

<ul>
<li>Maintain BUY recommendation for CENTEL with a target price of Bt49.0.The company’s 2Q22 net profit came out above our expectation at Bt22m in 2Q22, compared with Bt44m loss in 1Q22.</li>
<li>Impressive performance for hospitality business.Hotel revenue hit nine quarter high at Bt1.4bn thanks to impressive performance for Thai hotels as RevPar for Bangkok and Upcountry hotels jumped sixfold and fourfold </li>
<li>Food hit 10 quarter high at Bt2.9bn (+26%YoY+11%QoQ) on the back of strong SSSG at 19% compared with 0% and 10% in 2Q21 and 1Q22 respectively.</li>
</ul>


Maintain BUY recommendation for CENTEL with a target price of Bt49.0.The company’s 2Q22 net profit came out above our expectation at Bt22m in 2Q22, compared with Bt44m loss in 1Q22.
Impressive performance for hospitality business.Hotel revenue hit nine quarter high at Bt1.4bn thanks to impressive performance for Thai hotels as RevPar for Bangkok and Upcountry hotels jumped sixfold and fourfold 
Food hit 10 quarter high at Bt2.9bn (+26%YoY+11%QoQ) on the back of strong SSSG at 19% compared with 0% and 10% in 2Q21 and 1Q22 respectively.


CENTEL : Back to Net Profit Again in 2Q22 Before Recovering up In

Thailand

Central Plaza Hotel Public Company Limited owns and manages hotels and quick service restaurants. The Company operates its hotels under the banner of Centara Hotels & Resorts and franchises western and Japanese quick service restaurants.

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Central Plaza Hotel (CENTEL TB)

CENTEL : 3Q22 Missed Our and Market Estimates but Expect 4Q22 Profit to Be Solid

CENTEL report 3Q22 net loss in 3Q22 at Bt78m.Stripping out extra items mainly from unrealized foreign exchange loss on foreign currency loans,core...

Pi Securities PCL, Thailand

Fund Manager Survey - No Cuts, No Glory

Global fund managers still suggest increasing holdings of safe-haven assets, such as cash, or investing in sectors with recurring income, notably...

Krungthai XSpring

CENTEL : Positive Earnings Growth Momentum from 2H22 to 2023E

Maintain BUY recommendation for CENTEL with a new target price of Bt56.0 (PreviousTP: Bt49) after revised earnings up by 15-42%in 2022-23E...

Pi Securities PCL, Thailand

Special Report: Global Fund Manager Survey

We maintain our recommendation for stocks under the reopening theme that should benefit from the peak seasons for spending and tourism

Krungthai XSpring

CENTEL : Back to Net Profit Again in 2Q22 Before Recovering up In

Maintain BUY recommendation for CENTEL with a target price of Bt49.0. The company’s 2Q22 net profit came out above our expectation at Bt22m in...

Pi Securities PCL, Thailand

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