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>HANA saw a YoY and QoQ rebound in core earnings in 1Q24.</li><li>The results were slightly below our expectations, but we still believe they point to a positive direction in terms of HANA’s gross margin recovery in FY2024E.</li><li>We maintain our fair value of Bt42.00 but downgrade our recommendation to Outperform, after the share price rose by roughly 6% since our last report. </li></ul>

HANA saw a YoY and QoQ rebound in core earnings in 1Q24.The results were slightly below our expectations, but we still believe they point to a positive direction in terms of HANA’s gross margin recovery in FY2024E.We maintain our fair value of Bt42.00 but downgrade our recommendation to Outperform, after the share price rose by roughly 6% since our last report. 

Hana Microelectronics - Upside Priced in for FY2024 but Remain Bullish for FY2025

<ul><li>We initiate our coverage on HANA with a Buy rating and a FY2024E fair value of Bt42.00, based on a required rate of return of 5.83%.</li><li>We expect that the 2024E core earnings will stand at Bt2.2bn (+23% YoY, +14% YoY in terms of core EPS, after factoring in dilution), mainly driven by gross margin recovery from improvements in its Korean PMS operations and a slightly better utilization rate.</li><li>HANA’s core earnings should grow from the current low base at a 21% CAGR between 2023-26E on an overall demand upswing in its PCBA and IC businesses, increasing silicon carbide (SiC) sales, and an improving margin profile.</li></ul>

We initiate our coverage on HANA with a Buy rating and a FY2024E fair value of Bt42.00, based on a required rate of return of 5.83%.We expect that the 2024E core earnings will stand at Bt2.2bn (+23% YoY, +14% YoY in terms of core EPS, after factoring in dilution), mainly driven by gross margin recovery from improvements in its Korean PMS operations and a slightly better utilization rate.HANA’s core earnings should grow from the current low base at a 21% CAGR between 2023-26E on an overall demand upswing in its PCBA and IC businesses, increasing silicon carbide (SiC) sales, and an improving margin profile.

Hana Microelectronics - Improved Operations to Lead to a Core Earnings Rebound

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Two thirds of the way through the review period, we see one change for 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</a> in December with <a href="https://www.smartkarma.com/entities/kce-electronics-pcl" target="_blank" data-smartkarma-citation="entities:1892:1" rel="noopener">KCE Electronics (KCE TB)</a> replacing <a href="https://www.smartkarma.com/entities/ngern-tid-lor-pcl" target="_blank" data-smartkarma-citation="entities:31103:1" rel="noopener">Ngern Tid Lor (TIDLOR TB)</a>. </li>
<li>There is one close change where <a href="https://www.smartkarma.com/entities/i-tail-corp-pcl" target="_blank" data-smartkarma-citation="entities:36428:1" rel="noopener">I-TAIL (ITC TB)</a> could replace <a href="https://www.smartkarma.com/entities/srisawad-corp-pcl" target="_blank" data-smartkarma-citation="entities:9480:1" rel="noopener">Srisawad Power 1979 (SAWAD TB)</a> in the index.</li>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand (DELTA TB)</a> is unlikely to be deleted while <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)</a> fails liquidity and is unlikely to be added.</li>
</ul>


Two thirds of the way through the review period, we see one change for the SET 50 Index in December with KCE Electronics (KCE TB) replacing Ngern Tid Lor (TIDLOR TB). 
There is one close change where I-TAIL (ITC TB) could replace Srisawad Power 1979 (SAWAD TB) in the index.

Delta Electronics Thailand (DELTA TB) is unlikely to be deleted while Berli Jucker (BJC TB) fails liquidity and is unlikely to be added.


SET50 Index Rebalance Preview: One High Probability Change; Another One Is Close

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of Stock Exchange of Thailand as of Nov 15th.We estimate that they had an aggregated short interest worth USD2.3bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Delta Electronics, Bumrungrad Hospital, CP ALL, SCC.</li>
</ul>


We analyzed the changes in short interest of Stock Exchange of Thailand as of Nov 15th.We estimate that they had an aggregated short interest worth USD2.3bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Delta Electronics, Bumrungrad Hospital, CP ALL, SCC.


Thailand Short Interest Weekly (Nov 15th): Delta Electronics, Bumrungrad Hospital, CP ALL, SCC

Thematic (Sector/Industry)

<ul><li>Despite the contraction of exports in June at -0.3% YoY, we still believe that Thai international trade will meet the 2024E forecasts of the NESDC (i.e., a trade surplus of +USD10bn, export growth of +2%, and import growth of +4.6%), supported by the growth of the digital economy, which boosts demand for related products.</li><li>However, risk factors include drought reducing agricultural products in the market, ongoing geopolitical conflicts, higher freight rates in the second half of the year, slow recovery of some trading partner economies, and elections in many countries causing uncertainty, leading investors to delay investments while awaiting new government policies.</li><li>We recommend export-related stocks that are showing good signs of recovery: the rubber sector (NER and STA), the processed chicken sector (CPF, GFPT and BTG), the pet food sector (ITC and AAI), and the electronics sector (HANA).</li></ul>

Despite the contraction of exports in June at -0.3% YoY, we still believe that Thai international trade will meet the 2024E forecasts of the NESDC (i.e., a trade surplus of +USD10bn, export growth of +2%, and import growth of +4.6%), supported by the growth of the digital economy, which boosts demand for related products.However, risk factors include drought reducing agricultural products in the market, ongoing geopolitical conflicts, higher freight rates in the second half of the year, slow recovery of some trading partner economies, and elections in many countries causing uncertainty, leading investors to delay investments while awaiting new government policies.We recommend export-related stocks that are showing good signs of recovery: the rubber sector (NER and STA), the processed chicken sector (CPF, GFPT and BTG), the pet food sector (ITC and AAI), and the electronics sector (HANA).

Economic Update – Exports & Imports - Jul 30, 2024

Thailand

Hana Microelectronics Public Company Limited is an electronics manufacturing service company.  The Company manufactures electronic components on behalf of its customers for shipment to them or their customers.

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Hana Microelectronics (HANA TB)

Hana Microelectronics - Upside Priced in for FY2024 but Remain Bullish for FY2025

The results were slightly below our expectations, but we still believe they point to a positive direction in terms of HANA’s gross margin recovery...

Krungthai XSpring

Hana Microelectronics - Improved Operations to Lead to a Core Earnings Rebound

We initiate our coverage on HANA with a Buy rating and a FY2024E fair value of Bt42.00, based on a required rate of return of 5.83%.

Krungthai XSpring

SET50 Index Rebalance Preview: One High Probability Change; Another One Is Close

KCE could replace TIDLOR in the SET50 in Dec. ITC is a close add and could replace SAWAD. The impact on the stocks is big given the index is...

Brian Freitas

Thailand Short Interest Weekly (Nov 15th): Delta Electronics, Bumrungrad Hospital, CP ALL, SCC

We analyzed SET short interest report for the past week and highlighted short interest changes in Delta Electronics, Bumrungrad Hospital, CP ALL, SCC.

Ke Yan, CFA, FRM

Economic Update – Exports & Imports - Jul 30, 2024

Despite the contraction of exports in June at -0.3% YoY, we still believe that Thai international trade will meet the 2024E forecasts of the NESDC

Krungthai XSpring

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