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>We reiterate our HOLD rating with a new target price of Bt3.50 (down 5% from the prior TP), reflecting earnings downgrade. We stay neutral based on the following</li>
<li>4Q22 outlook and beyond CHG's 4Q22 earnings are expected to decline YoY off last year's high base, and QoQ from a sharp drop in pandemic-related contributions.</li>
<li>Organic growth will rise due to a pent-up demand despite COVID receding with lower number of infection cases.As a result,the management expects double-digit revenue growth for A-class units from 4Q22 </li>
</ul>


We reiterate our HOLD rating with a new target price of Bt3.50 (down 5% from the prior TP), reflecting earnings downgrade. We stay neutral based on the following
4Q22 outlook and beyond CHG's 4Q22 earnings are expected to decline YoY off last year's high base, and QoQ from a sharp drop in pandemic-related contributions.
Organic growth will rise due to a pent-up demand despite COVID receding with lower number of infection cases.As a result,the management expects double-digit revenue growth for A-class units from 4Q22 


CHG : As COVID Recedes, Core Operation Continues Improving

<ul>
<li>We maintain our HOLD rating with a target price of Bt3.70. Despite heading into 4Q22 with a fewer number of infected cases will continue to pressure margins, we remain neutral </li>
<li>Weak across all verticals in 3Q22 CHG posted 3Q22 earnings of Bt258m (-84% YoY, -71% QoQ). The result was 48% and 46% below our estimate and the market consensus, respectively.</li>
<li>Gross margin declined to 26.9% (-24ppts YoY, -19ppts QoQ), weaker than our forecast of 35%, The disappointing margin was attribute to a sharp fall in pandemic related contribution.</li>
</ul>


We maintain our HOLD rating with a target price of Bt3.70. Despite heading into 4Q22 with a fewer number of infected cases will continue to pressure margins, we remain neutral 
Weak across all verticals in 3Q22 CHG posted 3Q22 earnings of Bt258m (-84% YoY, -71% QoQ). The result was 48% and 46% below our estimate and the market consensus, respectively.
Gross margin declined to 26.9% (-24ppts YoY, -19ppts QoQ), weaker than our forecast of 35%, The disappointing margin was attribute to a sharp fall in pandemic related contribution.


<ul>
<li>We maintain our HOLD rating with a target price of Bt3.70,based on 26.7xPE’23E, the lowest level of pre-COVID level.We expect CHG to report a 3Q22 net profit at Bt498m (-68%YoY,-43%YoY).</li>
<li>Weak across all verticals in 3Q22 We forecast 3Q22E earnings at Bt498m, continuing to witness a sharp fall of 68%YoY and 43%QoQ.The 9M22 will account for 88% of our 2022E</li>
<li>We expect CHG’s revenue to book atBt2.3bn(-48%YoY,-18%QoQ).The YoY trend is anticipated to nosedive off a high base effect in 3Q21when the company gained from an uptick in new infection patients. </li>
</ul>


We maintain our HOLD rating with a target price of Bt3.70,based on 26.7xPE’23E, the lowest level of pre-COVID level.We expect CHG to report a 3Q22 net profit at Bt498m (-68%YoY,-43%YoY).
Weak across all verticals in 3Q22 We forecast 3Q22E earnings at Bt498m, continuing to witness a sharp fall of 68%YoY and 43%QoQ.The 9M22 will account for 88% of our 2022E
We expect CHG’s revenue to book atBt2.3bn(-48%YoY,-18%QoQ).The YoY trend is anticipated to nosedive off a high base effect in 3Q21when the company gained from an uptick in new infection patients. 


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.</li>
<li>The transaction is stuck in an impasse as <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.</li>
<li>The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.</li>
</ul>


KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.
The transaction is stuck in an impasse as Ramsay Health Care (RHC AU) will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.
The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.


Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> disclosed that the <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> consortium withdrew its indicative proposal but remains committed to the alternative proposal, which the Board earlier rejected. </li>
<li>The alternative proposal, while inferior to the indicative proposal, is still attractive and better than the status quo of no deal. The Board will engage for an improved offer. </li>
<li>The value gap between the parties is not huge, and a deal is possible. The upside (20% to alternative proposal) vs downside (-9% to undisturbed price) is worth a punt. </li>
</ul>



Ramsay Health Care (RHC AU) disclosed that the KKR &amp; Co Inc (KKR US) consortium withdrew its indicative proposal but remains committed to the alternative proposal, which the Board earlier rejected. 
The alternative proposal, while inferior to the indicative proposal, is still attractive and better than the status quo of no deal. The Board will engage for an improved offer. 
The value gap between the parties is not huge, and a deal is possible. The upside (20% to alternative proposal) vs downside (-9% to undisturbed price) is worth a punt. 


Thailand

Chularat Hospital PCL owns medical centers and hospitals. The Company operates a variety of centers specializing in treatments such as hand surgery, open heart surgery, and strokes as well as providing emergency services and patient care. Chularat Hospital serves the medial industry throughout Thailand.

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Chularat Hospital (CHG TB)

CHG : As COVID Recedes, Core Operation Continues Improving

We reiterate our HOLD rating with a new target price of Bt3.50 (down 5% from the prior TP), reflecting earnings downgrade. We stay neutral based on...

Pi Securities PCL, Thailand

CHG : Weak 3Q22 Results

We maintain our HOLD rating with a target price of Bt3.70. Despite heading into 4Q22 with a fewer number of infected cases will continue to...

Pi Securities PCL, Thailand

CHG : A Long Sail Before Growth Resumes

We maintain our HOLD rating with a target price of Bt3.70, based on 26.7xPE’23E, the lowest level of pre-COVID level. We expect CHG to report a...

Pi Securities PCL, Thailand

Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit

The peers’ shares have been, on average, flat since the undisturbed date. The shares are below the undisturbed price and are attractive on...

Arun George

Ramsay and KKR’s Game of Cat and Mouse

The value gap between the parties is not huge, and a deal remains possible. The upside (20% to the alternative proposal) vs downside (-9% to...

Arun George

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