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.

Equity Bottom-Up

<ul><li>The valuation metrics suggest maintaining a neutral view on the current fundamentals, with the stock price implying 3% upside from its fair value (FV).</li><li>However, the tactical outlook has been revised to neutral (previously limited downside risk).</li><li>The long-term growth outlook remains strong, with profit growth projected at a CAGR of 17% over the next two years.</li></ul>

The valuation metrics suggest maintaining a neutral view on the current fundamentals, with the stock price implying 3% upside from its fair value (FV).However, the tactical outlook has been revised to neutral (previously limited downside risk).The long-term growth outlook remains strong, with profit growth projected at a CAGR of 17% over the next two years.

Cp All - 3Q24 Core Profit Growth of 45% YoY and 1% QoQ, 5% Better than Forecast

<ul><li>KTX maintains an Outperform rating with a 2025 fair value of Bt64.80 (up from Bt62.17), using the earnings yield method based on a required return of 4.6%, reflecting a target PER of 22x.</li><li>The valuation metrics present a neutral view on the current fundamentals, and the tactical downside risk is limited.</li><li>We continue to have a strong outlook on long-term growth, projecting three-year earnings growth at a 20% CAGR.</li></ul>

KTX maintains an Outperform rating with a 2025 fair value of Bt64.80 (up from Bt62.17), using the earnings yield method based on a required return of 4.6%, reflecting a target PER of 22x.The valuation metrics present a neutral view on the current fundamentals, and the tactical downside risk is limited.We continue to have a strong outlook on long-term growth, projecting three-year earnings growth at a 20% CAGR.

Cp All - Expect 3Q24E Core Profit to Grow 39% YoY but Fall 4% QoQ

Thematic (Sector/Industry)

<ul><li>Although the market is likely to revise down EPS estimates following weaker-than- expected 3Q24 earnings, using the KTX implied EPS tool, we find that most sectors (accounting for over 80% of total market capitalization) have partially priced in the negative factors, which limits the downside risk.</li><li>In addition, the SET Index's correction of -0.8% (since the 3Q24 earnings announcements) has kept the market risk premium (MRP) stable at 4.213%, matching the lower bound of the trading buy range at an MRP of 4.21% (-1 S.D.).</li><li>This suggests that the SET is at a level where the risk-reward appears attractive. </li></ul>

Although the market is likely to revise down EPS estimates following weaker-than- expected 3Q24 earnings, using the KTX implied EPS tool, we find that most sectors (accounting for over 80% of total market capitalization) have partially priced in the negative factors, which limits the downside risk.In addition, the SET Index's correction of -0.8% (since the 3Q24 earnings announcements) has kept the market risk premium (MRP) stable at 4.213%, matching the lower bound of the trading buy range at an MRP of 4.21% (-1 S.D.).This suggests that the SET is at a level where the risk-reward appears attractive. 

Special Report: Investment Strategy Post-3Q24 Earnings Reports - NOVEMBER 21, 2024

<ul><li>KTX has shifted its rating to Outperform (from Buy) as the recent share price increase has reduced the upside to just 7% relative to our 12M FV of Bt62.17 (based on the earnings yield with a required return of 4.6%, reflecting a target PER of 22x).</li><li>Consequently, the valuation metrics suggest a moderated view of the stock's fundamentals, shifting from buy to attractive.</li><li>Despite this, the tactical downside risk remains limited. The long-term earnings prospects continue to be strong, with expected 3-year earnings growth at a CAGR of 22%.</li></ul>

KTX has shifted its rating to Outperform (from Buy) as the recent share price increase has reduced the upside to just 7% relative to our 12M FV of Bt62.17 (based on the earnings yield with a required return of 4.6%, reflecting a target PER of 22x).Consequently, the valuation metrics suggest a moderated view of the stock's fundamentals, shifting from buy to attractive.Despite this, the tactical downside risk remains limited. The long-term earnings prospects continue to be strong, with expected 3-year earnings growth at a CAGR of 22%.

Cp All - 2Q24 Earnings Growth of 37% YoY and 2% QoQ, 6% Better than Expected

<ul><li>KTX switches to a Buy rating (vs. Outperform previously), with a 12M FV of Bt62.17, based on the earnings yield and a required return of 4.6%, reflecting the PER target of 22x.</li><li>This FV implies upside of around 10%.  The valuation metrics suggest a more positive view on the fundamentals, and the tactical downside risk is limited.</li><li>Meanwhile, the long-term growth prospects are strong, with the three-year earnings expected to achieve a 22% CAGR.</li></ul>

KTX switches to a Buy rating (vs. Outperform previously), with a 12M FV of Bt62.17, based on the earnings yield and a required return of 4.6%, reflecting the PER target of 22x.This FV implies upside of around 10%.  The valuation metrics suggest a more positive view on the fundamentals, and the tactical downside risk is limited.Meanwhile, the long-term growth prospects are strong, with the three-year earnings expected to achieve a 22% CAGR.

Cp All - 2Q24E Core Profit to Grow 30% YoY but Fall 3% QoQ

Thailand

CP ALL PCL operates convenience store chains in Thailand and China.  The Company also owns and operates the a department store chain located primarily in Shanghai city and Chonqing city of China.

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CP ALL PCL (CPALL TB)

Cp All - 3Q24 Core Profit Growth of 45% YoY and 1% QoQ, 5% Better than Forecast

The valuation metrics suggest maintaining a neutral view on the current fundamentals, with the stock price implying 3% upside from its fair value...

Krungthai XSpring

Cp All - Expect 3Q24E Core Profit to Grow 39% YoY but Fall 4% QoQ

KTX maintains an Outperform rating with a 2025 fair value of Bt64.80 (up from Bt62.17), using the earnings yield method based on a required return...

Krungthai XSpring

Special Report: Investment Strategy Post-3Q24 Earnings Reports - NOVEMBER 21, 2024

Listed companies reported a combined net profit (SET EPS) of Bt208bn in 3Q24, which was approximately 8.5% below the consensus estimate.

Krungthai XSpring

Cp All - 2Q24 Earnings Growth of 37% YoY and 2% QoQ, 6% Better than Expected

KTX has shifted its rating to Outperform (from Buy) as the recent share price increase has reduced the upside to just 7% relative to our 12M FV of...

Krungthai XSpring

Cp All - 2Q24E Core Profit to Grow 30% YoY but Fall 3% QoQ

KTX switches to a Buy rating (vs. Outperform previously), with a 12M FV of Bt62.17, based on the earnings yield and a required return of 4.6%,...

Krungthai XSpring

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