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, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>I-Tail, an OEM in the wet pet food category, aims to raise around US$500m in its Thailand IPO. It is a subsidiary of <a href="https://www.smartkarma.com/entities/thai-union-group-pcl" target="_blank" data-smartkarma-citation="entities:161:1" rel="noopener">Thai Union Group (TU TB)</a> .</li>
<li>As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.</li>
<li>In our previous notes, we have looked at past performance, undertaken a peer comparison and spoken about valuation. In this note, we will add in its recently listed local peer.</li>
</ul>


I-Tail, an OEM in the wet pet food category, aims to raise around US$500m in its Thailand IPO. It is a subsidiary of Thai Union Group (TU TB) .
As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.
In our previous notes, we have looked at past performance, undertaken a peer comparison and spoken about valuation. In this note, we will add in its recently listed local peer.


I-Tail Corporation Pre-IPO - Peer Comparison Update - Adding in Its Only Local Peer

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

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>In this insight, we take a look at the potential index changes for the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> between now and the December 2022 Rebalance.</li>
<li>There is an ongoing market consultation with significant implications for constituent selection and there is also a potential intra-review change due to the DTAC-TRUE merger.</li>
<li>Based on the latest available data, there could three or four index changes during the December 2022 Rebalance depending on the outcome of the DTAC-TRUE merger.</li>
</ul>


In this insight, we take a look at the potential index changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) between now and the December 2022 Rebalance.
There is an ongoing market consultation with significant implications for constituent selection and there is also a potential intra-review change due to the DTAC-TRUE merger.
Based on the latest available data, there could three or four index changes during the December 2022 Rebalance depending on the outcome of the DTAC-TRUE merger.


Thailand SET50 Quiddity Leaderboard Dec 22: BJC Is the Most Interesting Name

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

I-Tail Corporation Pre-IPO - Peer Comparison Update - Adding in Its Only Local Peer

I-Tail, an OEM in the wet pet food category, aims to raise around US$500m in its Thailand IPO. It is a subsidiary of Thai Union Group (TU TB) .

Sumeet Singh

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

Thailand SET50 Quiddity Leaderboard Dec 22: BJC Is the Most Interesting Name

I expect RATCH to replace DTAC in the SET 50 index prior to the December Rebalance. DELTA, BJC, and COM7 could be added and KCE, BLA, and SAWAD...

Janaghan Jeyakumar, CFA

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