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

We expect the delay of EA’s 1GWh ESS plant COD and EV-Car sales from 4Q20 to 1Q20 could induce a negative sentiments and pressure the stock performance in short-term. Thus, we recommend to trade and gradually accumulate the stock by 1Q21.<ul>
<li>The ESS plant COD and the EV-Car delivery to Suvarnabhumi pattana taxi union is postponed to 1Q20. We expect a 80% drop in number of cars sales from earlier guidance of 5,000 units for 2021.</li>
<li>Expect 3Q20 earnings to slightly improve both YoY and QoQ. The lower availability of solar power plants is expected to be compensated by better seasonal wind power plant operation..</li>
<li>Potential upside from EV-bus sales. EA plan to commence sales of EV buses by 2H21 and target 200-unit sales in 2021.</li>
</ul>We maintain our buy recommendation while revise down the target price to Bt49 (from previous Bt51) to factor in the 5 to 8% earnings revision for 2021-22E due to delay in EV-car sales. Our valuation is derived using SOTP method, implying 26x PE’21.

We expect the delay of EA’s 1GWh ESS plant COD and EV-Car sales from 4Q20 to 1Q20 could induce a negative sentiments and pressure the stock performance in short-term. Thus, we recommend to trade and gradually accumulate the stock by 1Q21.
The ESS plant COD and the EV-Car delivery to Suvarnabhumi pattana taxi union is postponed to 1Q20. We expect a 80% drop in number of cars sales from earlier guidance of 5,000 units for 2021.
Expect 3Q20 earnings to slightly improve both YoY and QoQ. The lower availability of solar power plants is expected to be compensated by better seasonal wind power plant operation..
Potential upside from EV-bus sales. EA plan to commence sales of EV buses by 2H21 and target 200-unit sales in 2021.
We maintain our buy recommendation while revise down the target price to Bt49 (from previous Bt51) to factor in the 5 to 8% earnings revision for 2021-22E due to delay in EV-car sales. Our valuation is derived using SOTP method, implying 26x PE’21.

EA: ESS Plant COD and EV Car Sales Delayed to 2021

We initiate coverage of EA with a BUY rating, based on a 2021E target price of Bt51, which is derived from a sum-of-the-parts (SOTP) methodology. Our valuation implies 0.8xPEG for 2021E, lower than the Thailand and World utilities sector’s 0.9x and 2.1x respectively.The story:<ul>
<li>Secured stable income from power generation arm until 2023.</li>
<li>New S-curve driver from EV and ESS business</li>
<li>Synergy benefits from integrated EV-ESS business line</li>
<li>PCM and green diesel the new game changer for palm oil-based business</li>
</ul>Risks:<ul><li>Raw material price fluctuation, Delays and failure of new project, Capital increase and EPS dilution</li></ul>Background: Energy Absolute Public Company Limited (EA) together with its subsidiaries engage in manufacturing and distribution of biodiesel &amp; glycerol products both domestically and overseas. Moreover, the company generates and sells electricity in Thailand from solar and wind energy sources totaling 664MWe. In addition, the company operates charging stations under the brand “EA Anywhere”, and conducts R&amp;D into electric vehicles (EV) and energy storage systems (ESS). The company was the first in Thailand to launch electric vehicles (under the brand “MINE Mobility”). EA was founded in 2006 and is headquartered in Bangkok.

We initiate coverage of EA with a BUY rating, based on a 2021E target price of Bt51, which is derived from a sum-of-the-parts (SOTP) methodology. Our valuation implies 0.8xPEG for 2021E, lower than the Thailand and World utilities sector’s 0.9x and 2.1x respectively.The story:
Secured stable income from power generation arm until 2023.
New S-curve driver from EV and ESS business
Synergy benefits from integrated EV-ESS business line
PCM and green diesel the new game changer for palm oil-based business
Risks:Raw material price fluctuation, Delays and failure of new project, Capital increase and EPS dilutionBackground: Energy Absolute Public Company Limited (EA) together with its subsidiaries engage in manufacturing and distribution of biodiesel &amp; glycerol products both domestically and overseas. Moreover, the company generates and sells electricity in Thailand from solar and wind energy sources totaling 664MWe. In addition, the company operates charging stations under the brand “EA Anywhere”, and conducts R&amp;D into electric vehicles (EV) and energy storage systems (ESS). The company was the first in Thailand to launch electric vehicles (under the brand “MINE Mobility”). EA was founded in 2006 and is headquartered in Bangkok.

EA: One of the Prime Beneficiary of Global EV Boom

Thailand

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

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Energy Absolute (EA TB)

EA: ESS Plant COD and EV Car Sales Delayed to 2021

We expect the delay of EA 1GWh ESS plant COD and EV-Car sales from 4Q20 to 1Q20 could pressure the stock performance in short-term. Thus recommend...

Pi Securities PCL, Thailand

EA: One of the Prime Beneficiary of Global EV Boom

We initiate coverage of EA with a BUY rating, based on a 2021E target price of Bt51, which is derived from a sum-of-the-parts (SOTP) methodology....

Pi Securities PCL, Thailand

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