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

Electricity Generating / Equity Bottom-Up

<p><strong>Yesterday analyst meeting came out in a positive tone. We maintain our BUY recommendation based on a target price of Bt278.0 derived using DCF methodology (WACC 8.5% and TG 1%), implying 14.4x PE’21.</strong></p><div>• Expect the 1Q21 earnings to improve both YoY and QoQ, from better IPP seasonality, lower SQ&amp;A expenses and overseas business performance (Paju ES, SBPL, Quezon etc).</div><div></div><div>• Targets 1.0GWe power generation capacity expansion of 1.0GWe by 2021 (+16% from current portfolio of 6.0GWe).</div><div></div><div>• The stock is still at an attractive valuation as it is trading at below  -2SD PBV (5-year average) and provides a decent dividend yield of 3.8 to 4.2% in 2021-23E. Thus we believe the price weakness has created an investment opportunity.</div>

Yesterday analyst meeting came out in a positive tone. We maintain our BUY recommendation based on a target price of Bt278.0 derived using DCF methodology (WACC 8.5% and TG 1%), implying 14.4x PE’21.• Expect the 1Q21 earnings to improve both YoY and QoQ, from better IPP seasonality, lower SQ&amp;A expenses and overseas business performance (Paju ES, SBPL, Quezon etc).• Targets 1.0GWe power generation capacity expansion of 1.0GWe by 2021 (+16% from current portfolio of 6.0GWe).• The stock is still at an attractive valuation as it is trading at below  -2SD PBV (5-year average) and provides a decent dividend yield of 3.8 to 4.2% in 2021-23E. Thus we believe the price weakness has created an investment opportunity.

EGCO: Target 16% Capacity Expansion in 2021

Thematic (Sector/Industry)

<p><strong>BCPG, GUNKUL, GULF top pick growth stocks</strong></p><ul>
<li>
<strong>Earnings upcycle in 2021:</strong> We expect BCPG, GULF and GUNKUL to achieve 15 to 30% net profit growth during 2021 on the back 12 to 30% power generation capacity expansion in 2020-21 period.</li>
<li>
<strong>Declining gas price to support SPP performance:</strong> The industrial user power sales of SPP players BGRIM, GPSC and GULF (accounting 10 to 20% of the revenue) has rebound to pre – COVID 19 levels as of 4Q20.  We expect the declining gas cost (-10% YoY) will help in revamping the GPM and support the sector performance.</li>
</ul><p><strong>EGCO, RATCH top pick value stocks</strong></p><ul>
<li>
<strong>Cheap valuation:</strong> The stock price of EGCO and RATCH faced 70% and 30% fall in 2020 respectively. The stocks are trading very cheap at 9 to 13x PE’21E and having the companies already overcome the COVID-19 impact we believe the price correction has created an investment opportunity.</li>
<li>
<strong>Decent dividend yield:</strong> We expect RATCH and EGCO to pay a decent dividend yield of 3.3 to 4.4% in 2021.</li>
</ul><p><strong>Maintain HOLD rating on BGRIM, EA and GPSC</strong></p><ul><li>We have a positive view on BGRIM and GPSC as the SPP players will benefit from declining gas price. However, due to limit upside from current share price we maintain the HOLD rating. We recommend to HOLD EA, as the stock performance will depend on new EV-ESS business success and valuation demands.</li></ul>

BCPG, GUNKUL, GULF top pick growth stocks

Earnings upcycle in 2021: We expect BCPG, GULF and GUNKUL to achieve 15 to 30% net profit growth during 2021 on the back 12 to 30% power generation capacity expansion in 2020-21 period.

Declining gas price to support SPP performance: The industrial user power sales of SPP players BGRIM, GPSC and GULF (accounting 10 to 20% of the revenue) has rebound to pre – COVID 19 levels as of 4Q20.  We expect the declining gas cost (-10% YoY) will help in revamping the GPM and support the sector performance.
EGCO, RATCH top pick value stocks

Cheap valuation: The stock price of EGCO and RATCH faced 70% and 30% fall in 2020 respectively. The stocks are trading very cheap at 9 to 13x PE’21E and having the companies already overcome the COVID-19 impact we believe the price correction has created an investment opportunity.

Decent dividend yield: We expect RATCH and EGCO to pay a decent dividend yield of 3.3 to 4.4% in 2021.
Maintain HOLD rating on BGRIM, EA and GPSCWe have a positive view on BGRIM and GPSC as the SPP players will benefit from declining gas price. However, due to limit upside from current share price we maintain the HOLD rating. We recommend to HOLD EA, as the stock performance will depend on new EV-ESS business success and valuation demands.

Thailand Power Sector: Overweight-Bright 2021 Performance

<p>Last week's analyst meeting came out in a neutral tone. We maintain our BUY recommendation based on a target price of Bt278.0 derived using DCF methodology (WACC 8.5% and TG 1%), implying 13.1x PE’21.</p><div>• We expect 4Q20 earnings to grow YoY on the back of improving GPM from declining gas cost and better earnings recognition from XPCL. While dropping QoQ due to lower IPP seasonality and higher SG&amp;A expenses.</div><div></div><div>• Positive outlook on company’s plan to acquire a license for 250,000 ton/year LNG import (application filed by 2H20) to use in existing gas power projects, as it will help to improve GPM, by 10 to 15% reduction in fuel cost.</div><div></div><div>• The stock is still at an attractive valuation as it is trading at below  -2SD of 5-year-average PBV and provides a decent dividend yield of 2.7 to 3.4% in 2020-22E. Thus we believe the price weakness has created an investment opportunity.</div>

Last week's analyst meeting came out in a neutral tone. We maintain our BUY recommendation based on a target price of Bt278.0 derived using DCF methodology (WACC 8.5% and TG 1%), implying 13.1x PE’21.• We expect 4Q20 earnings to grow YoY on the back of improving GPM from declining gas cost and better earnings recognition from XPCL. While dropping QoQ due to lower IPP seasonality and higher SG&amp;A expenses.• Positive outlook on company’s plan to acquire a license for 250,000 ton/year LNG import (application filed by 2H20) to use in existing gas power projects, as it will help to improve GPM, by 10 to 15% reduction in fuel cost.• The stock is still at an attractive valuation as it is trading at below  -2SD of 5-year-average PBV and provides a decent dividend yield of 2.7 to 3.4% in 2020-22E. Thus we believe the price weakness has created an investment opportunity.

EGCO: Seeking New Expansion Opportunities

Equity Capital Markets

Electricity Generating / Equity Capital Markets

<p><strong>We maintain the BUY recommendation while revise down the target price to Bt278 (from previous Bt308) to reflect the earnings revision. Our valuation is derived using DCF methodology (WACC 8.1% and TG 1%). implying 13x PE’21.</strong></p><div>• EGCO reported 3Q20 net profit of Bt2.27bn (-20.0% YoY, -55.0% QoQ), </div><div></div><div>• Excluding the FX and extraordinary items, the core profit was at 2.95bn (+20.0%YoY, +21.0%QoQ). The core earnings improved mainly due to improved contribution from overseas power plants XPCL, Paju ES, and SBPL.</div><div></div><div>• We expect the 4Q20 earnings to slightly soften QoQ due to seasonal low IPP operation, while improve YoY from XPCL contribution.</div><div></div><div>• Revise down 2020-22E earnings by 6 to 15 %</div><div></div><div>•<strong> The stock is still at an attractive valuation as it is presently trading at below   -2SD PBV (5-year average) and provides a decent dividend yield of 2.7 to 3.4% in 2020-22E.</strong>
</div>

We maintain the BUY recommendation while revise down the target price to Bt278 (from previous Bt308) to reflect the earnings revision. Our valuation is derived using DCF methodology (WACC 8.1% and TG 1%). implying 13x PE’21.• EGCO reported 3Q20 net profit of Bt2.27bn (-20.0% YoY, -55.0% QoQ), • Excluding the FX and extraordinary items, the core profit was at 2.95bn (+20.0%YoY, +21.0%QoQ). The core earnings improved mainly due to improved contribution from overseas power plants XPCL, Paju ES, and SBPL.• We expect the 4Q20 earnings to slightly soften QoQ due to seasonal low IPP operation, while improve YoY from XPCL contribution.• Revise down 2020-22E earnings by 6 to 15 %• The stock is still at an attractive valuation as it is presently trading at below   -2SD PBV (5-year average) and provides a decent dividend yield of 2.7 to 3.4% in 2020-22E.


EGCO: 3Q20 Core Profit Grew from Overseas Contribution

<p><strong>Yesterday analyst meeting came out in a positive tone. We maintain our BUY recommendation with a target price of Bt308 derived from DCF methodology (WACC 8.1% and TG 1%), implying 14.5x PE’20.</strong></p><ul>
<li>Expect 2H20 earnings to improve HoH on the back of improving overseas power plant performance from Covid-19 recovery, and seasonal high earnings recognition from Xayaburi hydro power plant in Lao PDR (160MWe, COD in 4Q19) benefiting from monsoon season</li>
<li>Positive outlook on company’s plan to acquire license for LNG import (application to be filed by 2H20) to use in existing gas power projects, as it will help them to secure gas at 10 to 15% lower than PTT price.</li>
<li>EGCO share price dropped 30% YTD. Having the company has already overcome the COVID-19 impact and given its solid earnings outlook for 2020-22E period (6% CAGR EPS growth), we believe the price fall has created an investment opportunity.</li>
<li>Announced interim dividend payment of Bt3 per share or implying dividend yield of 1.3%. XD is on 2 September.</li>
</ul>

Yesterday analyst meeting came out in a positive tone. We maintain our BUY recommendation with a target price of Bt308 derived from DCF methodology (WACC 8.1% and TG 1%), implying 14.5x PE’20.
Expect 2H20 earnings to improve HoH on the back of improving overseas power plant performance from Covid-19 recovery, and seasonal high earnings recognition from Xayaburi hydro power plant in Lao PDR (160MWe, COD in 4Q19) benefiting from monsoon season
Positive outlook on company’s plan to acquire license for LNG import (application to be filed by 2H20) to use in existing gas power projects, as it will help them to secure gas at 10 to 15% lower than PTT price.
EGCO share price dropped 30% YTD. Having the company has already overcome the COVID-19 impact and given its solid earnings outlook for 2020-22E period (6% CAGR EPS growth), we believe the price fall has created an investment opportunity.
Announced interim dividend payment of Bt3 per share or implying dividend yield of 1.3%. XD is on 2 September.


EGCO: Positive 2H20 Earnings Outlook from Better Overseas Performance

Thailand

Electricity Generating Public Company Limited is an electric utility holding company.  The Company, through its two major subsidiaries, produces and supplies electricity to the Electricity Generating Authority of Thailand (EGAT), under long term power purchase agreements of 20 and 15 years.  It also operates energy related businesses through joint ventures.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Electricity Generating (EGCO TB)

EGCO: Target 16% Capacity Expansion in 2021

Yesterday analyst meeting came out in a positive tone. We maintain our BUY recommendation based on a target price of Bt278.0 derived using DCF...

Pi Securities PCL, Thailand

Thailand Power Sector: Overweight-Bright 2021 Performance

Power Sector: Overweight-Bright 2021 sector performance. BCPG, GUNKUL, GULF top pick growth stocks. EGCO, RATCH top pick value stocks

Pi Securities PCL, Thailand

EGCO: Seeking New Expansion Opportunities

Last week's analyst meeting came out in a neutral tone. We maintain our BUY recommendation based on a target price of Bt278.0 derived using DCF...

Pi Securities PCL, Thailand

EGCO: 3Q20 Core Profit Grew from Overseas Contribution

We maintain the BUY recommendation while revise down the target price to Bt278 (from previous Bt308) to reflect the earnings revision.

Pi Securities PCL, Thailand

EGCO: Positive 2H20 Earnings Outlook from Better Overseas Performance

Yesterday analyst meeting came out in a positive tone. We maintain our BUY recommendation with a target price of Bt308 derived from DCF methodology...

Pi Securities PCL, Thailand

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)