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

<p><strong>Yesterday analyst meeting come out in a positive tone. The 1.0GWh ESS plant is scheduled to commence operation in 3Q21. The company also plan to deliver 100 E-Buses and set 28 E ferry ready for operation in 2H21.</strong></p><div>• Expect 3Q21 net profit to improve YoY and QoQ backed by 1) first time revenue recognition of EV business (100 E bus delivery scheduled for 2H21), and 2) solid biodiesel business performance.</div><div></div><div>• Positive 2021-25E outlook as we expect a 15% CAGR net profit growth on the back of incrementing contribution from new EV-ESS businesses (commencing on 3Q-4Q21), viz., EV car/bus/truck sales, and ESS (battery) supply to B2B clients.</div><div></div><div><strong>We upgrade our recommendation to BUY and revise up the SOTP based target price by 43% of Bt70.0, factoring in the 15% CAGR net profit growth in 2021-25, and incrementing future growth following Global EV trend. Our valuation implies 34x PE,22E.</strong></div>

Yesterday analyst meeting come out in a positive tone. The 1.0GWh ESS plant is scheduled to commence operation in 3Q21. The company also plan to deliver 100 E-Buses and set 28 E ferry ready for operation in 2H21.• Expect 3Q21 net profit to improve YoY and QoQ backed by 1) first time revenue recognition of EV business (100 E bus delivery scheduled for 2H21), and 2) solid biodiesel business performance.• Positive 2021-25E outlook as we expect a 15% CAGR net profit growth on the back of incrementing contribution from new EV-ESS businesses (commencing on 3Q-4Q21), viz., EV car/bus/truck sales, and ESS (battery) supply to B2B clients.We upgrade our recommendation to BUY and revise up the SOTP based target price by 43% of Bt70.0, factoring in the 15% CAGR net profit growth in 2021-25, and incrementing future growth following Global EV trend. Our valuation implies 34x PE,22E.

EA: EV-ESS Business to Kick Start in 3Q21

<p><strong>Yesterday analyst meeting came out in a negative tone. We maintain the SELL rating, over the concerns that delay of EV-ESS business commencement could pressure the stock performance. Our target price of Bt49.0 is derived using SOTP methodology, implying 24.0x PE’22E.</strong></p><div>• Expect 2Q21 earnings to soften QoQ due to poor biodiesel business contribution and seasonal lower wind power plant operation. While Improve YoY supported by better contribution from new PCM business COD in 4Q20.</div><div></div><div>• ESS (battery) plant COD, and EV delivery delayed to 2H21 due to COVID-19 crisis.</div><div></div><div>• We like EA’s EV &amp; ESS business expansion strategy, however, maintain a cautious short-term outlook (12-months) due to continuous project delays and concerns over the business success.</div>

Yesterday analyst meeting came out in a negative tone. We maintain the SELL rating, over the concerns that delay of EV-ESS business commencement could pressure the stock performance. Our target price of Bt49.0 is derived using SOTP methodology, implying 24.0x PE’22E.• Expect 2Q21 earnings to soften QoQ due to poor biodiesel business contribution and seasonal lower wind power plant operation. While Improve YoY supported by better contribution from new PCM business COD in 4Q20.• ESS (battery) plant COD, and EV delivery delayed to 2H21 due to COVID-19 crisis.• We like EA’s EV &amp; ESS business expansion strategy, however, maintain a cautious short-term outlook (12-months) due to continuous project delays and concerns over the business success.

EA: EV-ESS Business Commencement Delayed to 2H21

<p><strong>Yesterday analyst meeting come out in a neutral tone. We maintain the SELL rating, as the delay of EV-ESS business commencement and concerns over competency will pressure the stock performance. Our target price of Bt49.0 is derived using SOTP methodology, implying 26.0x PE’21.</strong></p><div>• Expect 1Q21 earnings to improve both YoY and QoQ, on the back of better power plant operation, biodiesel business contribution and earnings recognition from bio-PCM business COD in 3Q20.</div><div></div><div>• ESS (battery) plant COD postponed to 2Q21. EV-Car delivery delayed to 2H21 due to COVID-19 crisis.</div><div></div><div>• We like EA’s EV &amp; ESS business expansion strategy, but we see no upside to our earnings forecast without the new business success.</div>

Yesterday analyst meeting come out in a neutral tone. We maintain the SELL rating, as the delay of EV-ESS business commencement and concerns over competency will pressure the stock performance. Our target price of Bt49.0 is derived using SOTP methodology, implying 26.0x PE’21.• Expect 1Q21 earnings to improve both YoY and QoQ, on the back of better power plant operation, biodiesel business contribution and earnings recognition from bio-PCM business COD in 3Q20.• ESS (battery) plant COD postponed to 2Q21. EV-Car delivery delayed to 2H21 due to COVID-19 crisis.• We like EA’s EV &amp; ESS business expansion strategy, but we see no upside to our earnings forecast without the new business success.

EA: EV-ESS Earnings to Kick in at Best by Late 2021-1H22

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><strong>Yesterday analyst meeting come in a neutral tone. We maintain the BUY recommendation based on a target price of Bt49.0 derived using SOTP methodology, implying 26.0x PE’21.</strong></p><div>• Expect 4Q20 earnings to remain flat YoY, while improve QoQ,  on the back of recovering wind power plant operations, enhancing contribution from biodiesel business, and earnings recognition from PCM business for the first time after commencing operation in 3Q20.</div><div></div><div>• Though the delay of EV-ESS business to 2021 could pressure the stock performance in short-term, we maintain our positive outlook for 2021-22, given the strong 12.0% CAGR EPS growth expectation backed by gradual earnings recognition from new businesses (EV-ESS).</div>

Yesterday analyst meeting come in a neutral tone. We maintain the BUY recommendation based on a target price of Bt49.0 derived using SOTP methodology, implying 26.0x PE’21.• Expect 4Q20 earnings to remain flat YoY, while improve QoQ,  on the back of recovering wind power plant operations, enhancing contribution from biodiesel business, and earnings recognition from PCM business for the first time after commencing operation in 3Q20.• Though the delay of EV-ESS business to 2021 could pressure the stock performance in short-term, we maintain our positive outlook for 2021-22, given the strong 12.0% CAGR EPS growth expectation backed by gradual earnings recognition from new businesses (EV-ESS).

EA: EV-ESS Business Success to Drive Future Earnings

Thailand

Prima Marine Public Company Limited operates as a marine vessel management firm. The Company offers oil-tanker, crude oil, liquefied petrochemicals, and petroleum products transportation services. Prima Marine also provides shipbuilding, shipping, and storage services. Prima Marine serves customers in the Asia Pacific region.

Siamgas & Petrochemicals PCL distributes liquefied petroleum gas (LPG). The Company provides LPG, ammonia and other related petrochemical products such as propane, butane and propellant. Siamgas is also involved in the logistics services for LPG and petrochemical products.

The Lanna Resources Public Company Limited mines and distributes lignite and granite products in Thailand.  The Company produces two types of granite products, polished granite slab and granite block.  Its lignite is supplied to power generation, cement, paper, and food industries.  Additionally, Lanna imports coal for domestic distribution.

Esso Thailand PCL is a fully integrated oil business, including oil refinery and production. The Company provides liquefied petroleum gas (LPG), gasoline, aviation fuel, diesel, marine fuel, lubricants, aromatic products and other related products such as purified terephthalic acid (PTA), solvents, plasticizers, and benzene concentrate stream.

SUSCO Pcl distributes petroleum products including unleaded and regular gasoline and diesel oil through its gasoline filling stations and directly to large end-users.  Through its subsidiaries, the Company acts as an oil agent and offers marine freight transportation services.

IRPC PCL produces a variety of petrochemical products including polypropylene, high density polyethylene and expandable polystyrene primarily used in packaging materials. Through its subsidiaries, the Company produces and distributes gasoline, liquefied petroleumgas (LPG), asphalt, as well as electricity and construction materials.

Asian Insulators Public Company Limited manufactures electrical porcelain insulators for use in low, medium and high voltage applications such as underground power lines, overhead power lines, and power distribution systems and sub-stations.

Sea Oil PCL supplies marine bunker fuels and lubricant products and food services to all kinds of ships at all major ports in Thailand and in the SouthEast Asian region.

Power Solution Technologies PCL manages and designs electrical systems. The Company provides solutions in telecom power, power supplies, batteries, renewable energy, environment monitoring/control and biomass.

RPCG Public Company Limited distillates condensate residue (CR) into petroleum and petrochemical products such as low sulfur high-speed diesel, fuel oil and intermediate chemical products.  The Company distributes its products to wholesalers as well as to retail service stations owned by its subsidiary.

PT Indika Energy Tbk is an energy company. The Company provides energy services, energy resources and infrastructure, primarily in the areas of coal production, engineering, procurement and construction services and power generation services.

Erin Energy Corporation operates as an independent oil and gas exploration and production company. The Company offers crude oil, natural gas, and other oil products. Erin Energy owns a portfolio of onshore and offshore assets in the United States, Nigeria, Kenya, Gambia, South Africa, and Ghana.

Petron Corporation refines crude oil and sells a full range of petroleum products. The Company transports its products by sea, using tankers and barges. Petron also retails gasoline, diesel, and kerosene to motorists, public transportation operators and households through its service stations. Petro also provides insurance & reinsurance service and leases property.

Pakistan Oil Fields Limited specializes in the exploration, drilling, production and transmission of petroleum.  The Company also markets Liquified Petroleum Gas (LPG).

SandRidge Energy, Inc. explores and produces natural gas and crude oil. The Company owns and operates gas gathering, processing facilities, carbon dioxide treating, and transportation facilities. SandRidge Energy serves customers in the United States.

Clean Energy Fuels Corporation designs, builds, finances and operates natural gas filling stations for vehicle fleets.  The Company also helps its customers acquire and finance natural gas vehicles and obtain local, state, and federal clean air rebates and incentives.

Excelerate Energy, Inc. operates as an oil and natural gas company. The Company offers flexible liquefied natural gas sales and distribution solutions, as well as provides LNG terminal services. Excelerate Energy serves customers worldwide.

China Aviation Oil Singapore Corporation Limited supplies jet fuel to foreign and domestic airlines flying through China's airports.  The Company also trades in other oil products such as fuel oil, gas oil, crude oil, petrochemical products, including physical and paper swaps, and futures trading.

China Aviation Oil Singapore Corp (CAO SP)

Energy Resources of Australia Limited is a uranium company which mines, processes and sells uranium oxide from the Ranger mine in the Northern Territory and uranium concentrates sourced outside Australia to nuclear electric utilities in Japan, South Korea, Europe and North America.  The Company also provides environmental consulting services.

Productive Technologies Company Limited provides productivity solutions to semiconductor and solar cell manufacturers. The Company is engaged in advanced manufacturing of equipment applied in semiconductor and solar power businesses, as well as operates a crude oil asset. Productive Technologies serves customers in China.

Energy Absolute Public Company Limited engages in the research, development, and production of biodiesel products in Thailand.

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

Energy Absolute (EA TB)

EA: EV-ESS Business to Kick Start in 3Q21

Yesterday analyst meeting come out in a positive tone. The 1.0GWh ESS plant is scheduled to commence operation in 3Q21. The company also plan to...

Pi Securities PCL, Thailand

EA: EV-ESS Business Commencement Delayed to 2H21

Yesterday analyst meeting came out in a negative tone. We maintain the SELL rating, over the concerns that delay of EV-ESS business commencement...

Pi Securities PCL, Thailand

EA: EV-ESS Earnings to Kick in at Best by Late 2021-1H22

Yesterday analyst meeting come out in a neutral tone. We maintain the SELL rating, as the delay of EV-ESS business commencement and concerns over...

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

EA: EV-ESS Business Success to Drive Future Earnings

Yesterday analyst meeting come in a neutral tone. We maintain the BUY recommendation based on a target price of Bt49.0 derived using SOTP...

Pi Securities PCL, Thailand

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)