Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>Asset World, Banpu Public and Ngern Tid Lor are being added to the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">SET 50 Index (SET50 INDEX)</a> while Berli Jucker, Delta Electronics and Sri Trang Agro will be deleted.</li>
<li>Estimated one-way turnover is 5.83% and results in a one-way trade of THB 4,957m. The deletions of BJC/ DELTA will result in a funding inflow to the other index constituents.</li>
<li>
<a href="https://www.smartkarma.com/entities/asset-world-corp-pcl" target="_blank" data-smartkarma-citation="entities:28136:1" rel="noopener">Asset World Corporation (AWC TB)</a> is a surprise to an extent with the name not appearing on most lists on the street. We had it as a low probability inclusion.</li>
</ul>


Asset World, Banpu Public and Ngern Tid Lor are being added to the SET 50 Index (SET50 INDEX) while Berli Jucker, Delta Electronics and Sri Trang Agro will be deleted.
Estimated one-way turnover is 5.83% and results in a one-way trade of THB 4,957m. The deletions of BJC/ DELTA will result in a funding inflow to the other index constituents.

Asset World Corporation (AWC TB) is a surprise to an extent with the name not appearing on most lists on the street. We had it as a low probability inclusion.


SET50 December Index Rebalance: AWC, BANPU, TIDLOR Added; BJC, DELTA, STA Out

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>ERW reported 3Q21 net loss of Bt623m, the seventh consecutive quarter loss due to operation under EBIT breakeven.</li>
<li>Partial lockdown measures caused a reduction in inter-provincial travel and resulted in an unprofitable occupancy rate.</li>
<li>The company recorded negative EBITDA of Bt243m, which was the sixth-consecutive quarter of negative EBITDA.</li>
</ul>


ERW reported 3Q21 net loss of Bt623m, the seventh consecutive quarter loss due to operation under EBIT breakeven.
Partial lockdown measures caused a reduction in inter-provincial travel and resulted in an unprofitable occupancy rate.
The company recorded negative EBITDA of Bt243m, which was the sixth-consecutive quarter of negative EBITDA.


ERW: The Seventh Consecutive Quarter Loss in 3Q21

<p><strong>We maintain SELL rating with a new target price of Bt2.46 (-5% from previous target price) based on DCF method (WACC of 7% and terminal growth of 2%), implying 35.5xPE’23 due to less possibility to open country for tourists by the next six months due to prolonged COVID-19 impact and a slow COVID-19 vaccine rollout in Thailand.</strong></p><div>• Trimmed 2021-23E forecast to factor in  a reduction in inter-provincial travel caused by COVID impact and partial lockdown measures continue to pressure in operations.</div><div></div><div>• However, the company still maintains its financial health with an interesting bearing debt-to-equity ratio of 1.7x.</div><div></div><div>• We expect its operations to incur loss in 2H21 due to weak domestic demand and partial lockdown measures and expect earnings to return to profit and near pre-COVID levels in 2023.</div>

We maintain SELL rating with a new target price of Bt2.46 (-5% from previous target price) based on DCF method (WACC of 7% and terminal growth of 2%), implying 35.5xPE’23 due to less possibility to open country for tourists by the next six months due to prolonged COVID-19 impact and a slow COVID-19 vaccine rollout in Thailand.• Trimmed 2021-23E forecast to factor in  a reduction in inter-provincial travel caused by COVID impact and partial lockdown measures continue to pressure in operations.• However, the company still maintains its financial health with an interesting bearing debt-to-equity ratio of 1.7x.• We expect its operations to incur loss in 2H21 due to weak domestic demand and partial lockdown measures and expect earnings to return to profit and near pre-COVID levels in 2023.

ERW: Expect to Return to Pre-COVID Levels in 2023

<p><strong>ERW reported 2Q21 net loss of Bt690m, the fifth consecutive quarterly loss due to operation under EBIT breakeven.</strong></p><div>• Excluding extra items from loss on impairment of assets related to COVID-19 at Bt131m, ERW’s 2Q21 core loss was at Bt559m.</div><div>• Reduction in inter-provincial travel caused by COVID impact and partial lockdown measures continue to pressure in operation.</div><div>• However, the company still maintain its financial health with interesting bearing debt-to-equity ratio of 1.7x.</div><div>• We expect its operation to incur loss in 2H21 due to weak domestic demand and less possibility to open country for tourists by the next six months due to prolonged COVID impact and partial lockdown measures.</div><div>
<br>
</div><p><strong>Therefore, our earnings forecast, target price and recommendation are under review.</strong></p>

ERW reported 2Q21 net loss of Bt690m, the fifth consecutive quarterly loss due to operation under EBIT breakeven.• Excluding extra items from loss on impairment of assets related to COVID-19 at Bt131m, ERW’s 2Q21 core loss was at Bt559m.• Reduction in inter-provincial travel caused by COVID impact and partial lockdown measures continue to pressure in operation.• However, the company still maintain its financial health with interesting bearing debt-to-equity ratio of 1.7x.• We expect its operation to incur loss in 2H21 due to weak domestic demand and less possibility to open country for tourists by the next six months due to prolonged COVID impact and partial lockdown measures.
 
Therefore, our earnings forecast, target price and recommendation are under review.

ERW: The Fifth Consecutive Quarterly Loss in 2Q21

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p>As the Thai government announced that they will open the borders in 120 days, a stock that will rally hard is obviously <a href="https://www.smartkarma.com/entities/airports-of-thailand-pcl" target="_blank" data-smartkarma-citation="entities:239:1" rel="noopener">Airports of Thailand (AOT TB)</a>as it directly links with the number of foreign tourists coming to Thailand. </p>
<p>When the market fully digests the news that Thailand is fully opened for foreign tourists, <a href="https://www.smartkarma.com/entities/airports-of-thailand-pcl" target="_blank" data-smartkarma-citation="entities:239:1" rel="noopener">Airports of Thailand (AOT TB)</a> has underperformed the other tourism names that have benefited from the increasing vaccination in Thailand. </p>
<div class="content-highlight">
<p>For those who have been patient holding AOT, you shall be rewarded soon. </p>
<p>For investors who do not have AOT in the portfolio yet, this is the biggest catalyst so far thus please start building a position.</p>
<p>For investors who are short AOT, although one may think that the tourists may not come that soon, the stock will rally much earlier than the tourists coming back to Thailand as the pent-up demand is massive and vaccines are pretty much available around the world. </p>
</div>

As the Thai government announced that they will open the borders in 120 days, a stock that will rally hard is obviously Airports of Thailand (AOT TB)as it directly links with the number of foreign tourists coming to Thailand. 
When the market fully digests the news that Thailand is fully opened for foreign tourists, Airports of Thailand (AOT TB) has underperformed the other tourism names that have benefited from the increasing vaccination in Thailand. 

For those who have been patient holding AOT, you shall be rewarded soon. 
For investors who do not have AOT in the portfolio yet, this is the biggest catalyst so far thus please start building a position.
For investors who are short AOT, although one may think that the tourists may not come that soon, the stock will rally much earlier than the tourists coming back to Thailand as the pent-up demand is massive and vaccines are pretty much available around the world. 


Airport of Thailand (AOT): 120 Days to Reopening

Thailand

The Erawan Group Public Company Limited develops and operates luxurious hotels, office buildings and shopping centers in the heart of Bangkok.

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Erawan Group (ERW TB)

SET50 December Index Rebalance: AWC, BANPU, TIDLOR Added; BJC, DELTA, STA Out

There are 3 changes to the SET50 index at the December rebalance. AWC, BANPU and TIDLOR will replace BJC, DELTA and STA. AWC is a 'surprise' and...

Brian Freitas

ERW: The Seventh Consecutive Quarter Loss in 3Q21

ERW reported 3Q21 net loss of Bt623m, the seventh consecutive quarter loss due to operation under EBIT breakeven. We maintain SELL rating with a...

Pi Securities PCL, Thailand

ERW: Expect to Return to Pre-COVID Levels in 2023

We maintain SELL rating with a new target price of Bt2.46 (-5% from previous target price) based on DCF method (WACC of 7% and terminal growth of...

Pi Securities PCL, Thailand

ERW: The Fifth Consecutive Quarterly Loss in 2Q21

ERW reported 2Q21 net loss of Bt690m, the fifth consecutive quarterly loss due to operation under EBIT breakeven. Therefore, our earnings forecast,...

Pi Securities PCL, Thailand

Airport of Thailand (AOT): 120 Days to Reopening

As the Thai govt announced that they will open the borders in 120 days, the Airports of Thailand share will rally hard as it directly links with...

Henry Soediarko

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