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>We maintain BUY but cut TP by 9% to Bt52.50 based on 21.3xPE’1H23E (+1S.D.of 5-year average trading) to reflect more cautious view on its earnings growth in 2H22 and 2023. </li>
<li>Lower USD sales but improving gross margin in2Q22Weak 2Q22 USD sales at US$186m (-4%YoY,flat QoQ)was caused by waning demand for PC and Mobile PCBs and ICs (~30%of HANA’s total sales)</li>
<li>Gross margin expansion QoQ to 13.7% in 2Q22 (-3.0ppts YoY,+2.9ppts QoQ) was caused by favorable exchange rates and economies of scale.We share management’s  belief that the margin is unsustainable </li>
</ul>


We maintain BUY but cut TP by 9% to Bt52.50 based on 21.3xPE’1H23E (+1S.D.of 5-year average trading) to reflect more cautious view on its earnings growth in 2H22 and 2023. 
Lower USD sales but improving gross margin in2Q22Weak 2Q22 USD sales at US$186m (-4%YoY,flat QoQ)was caused by waning demand for PC and Mobile PCBs and ICs (~30%of HANA’s total sales)
Gross margin expansion QoQ to 13.7% in 2Q22 (-3.0ppts YoY,+2.9ppts QoQ) was caused by favorable exchange rates and economies of scale.We share management’s  belief that the margin is unsustainable 


<ul>
<li>We maintain BUY with TP of Bt57.50 based on 21.3xPE’22E(+1S.D. of 5-year trading history).2Q22 net profit of Bt244m (-67% YoY,-33% QoQ) was under our expectations due to large FX losses.</li>
<li>2Q22 result below expectation but unlikely an issue Net profit was at Bt244m(-67% YoY,-33%QoQ).Both YoY and QoQ declined due to FX losses. Stripping FX losses, core profit was at Bt597m </li>
<li>Revenue was at Bt6.4bn (+5% YoY, +5% QoQ). QoQ and YoY growth was mainly due to Baht depreciation. QoQ also grew due to growth in IC Thailand segment.</li>
</ul>


We maintain BUY with TP of Bt57.50 based on 21.3xPE’22E(+1S.D. of 5-year trading history).2Q22 net profit of Bt244m (-67% YoY,-33% QoQ) was under our expectations due to large FX losses.
2Q22 result below expectation but unlikely an issue Net profit was at Bt244m(-67% YoY,-33%QoQ).Both YoY and QoQ declined due to FX losses. Stripping FX losses, core profit was at Bt597m 
Revenue was at Bt6.4bn (+5% YoY, +5% QoQ). QoQ and YoY growth was mainly due to Baht depreciation. QoQ also grew due to growth in IC Thailand segment.


<ul>
<li>Analyst meeting came out with negative tone. We maintain BUY rating at Bt57.50, based on 21.3xPE’22 (+1SD of 10-yr trading average). Our TP and 22E downwards earnings revisal by 6% </li>
<li>2Q22 should be lowest of the year due to declining sales from decrease by 25% in output in Chinese factories.Recommend accumulating shares,due to attractive valuations, prior to 2H22 earnings recovery.</li>
<li>2H22 earnings will recover from GPM expansion from revenue contribution from new SiC segment (consistently gross loss until now)and better product mix in IC Thai factory.Sales should also grow moderately </li>
</ul>


Analyst meeting came out with negative tone. We maintain BUY rating at Bt57.50, based on 21.3xPE’22 (+1SD of 10-yr trading average). Our TP and 22E downwards earnings revisal by 6% 
2Q22 should be lowest of the year due to declining sales from decrease by 25% in output in Chinese factories.Recommend accumulating shares,due to attractive valuations, prior to 2H22 earnings recovery.
2H22 earnings will recover from GPM expansion from revenue contribution from new SiC segment (consistently gross loss until now)and better product mix in IC Thai factory.Sales should also grow moderately 


HANA: Robust EV Demand Will Offset Global Smartphone Decline

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Thematic (Sector/Industry)

<ul>
<li>We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology</li>
<li>Portfolio changes: Three stocks remain, 11 new join the fray</li>
<li>Since inception, it has gained 95% versus the SET 100 Index’s return of 36%</li>
</ul>


We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology
Portfolio changes: Three stocks remain, 11 new join the fray
Since inception, it has gained 95% versus the SET 100 Index’s return of 36%


The Stocks to Own in Thailand – Vol. 36

<ul>
<li>Analyst meeting came out with negative tone. The company’s Korean SiC segment will continue to incur costs throughout 2022.However, the 45% tumble in share price since Nov’21 factored in negative </li>
<li>We expect 22E core profit will remain flat YoY at Bt2.3bn. Additional costs and microchip shortages will offset the growth from capacity expansion.</li>
<li>Bleak outlook until 3Q22. Additional costs will drag core earnings until 3Q22. Current share prices are cheap and provide opportunity for share accumulation.</li>
</ul>


Analyst meeting came out with negative tone. The company’s Korean SiC segment will continue to incur costs throughout 2022.However, the 45% tumble in share price since Nov’21 factored in negative 
We expect 22E core profit will remain flat YoY at Bt2.3bn. Additional costs and microchip shortages will offset the growth from capacity expansion.
Bleak outlook until 3Q22. Additional costs will drag core earnings until 3Q22. Current share prices are cheap and provide opportunity for share accumulation.


HANA: 2022 Net Profit to Grow Despite Additional Costs

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 : Weaker Outlook on 2H22

We maintain BUY but cut TP by 9% to Bt52.50 based on 21.3xPE’1H23E (+1S.D. of 5-year average trading) to reflect more cautious view on its earnings...

Pi Securities PCL, Thailand

HANA : Core Earnings Should Grow in 2H22

We maintain BUY with TP of Bt57.50 based on 21.3xPE’22E (+1S.D. of 5-year trading history). 2Q22 net profit of Bt244m (-67% YoY, -33% QoQ) was...

Pi Securities PCL, Thailand

HANA: Robust EV Demand Will Offset Global Smartphone Decline

Analyst meeting came out with negative tone. We maintain BUY rating at Bt57.50, based on 21.3xPE’22 (+1SD of 10-yr trading average). Our TP and 22E...

Pi Securities PCL, Thailand

The Stocks to Own in Thailand – Vol. 36

We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Portfolio changes: Three stocks remain, 11 new join...

A. Stotz Investment Research

HANA: 2022 Net Profit to Grow Despite Additional Costs

Analyst meeting came out with negative tone. The company’s Korean SiC segment will continue to incur costs throughout 2022.However, the 45% tumble...

Pi Securities PCL, Thailand

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