Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

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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>We maintain HOLD rating for HANA with a new 2021E target price of Bt38.50, derived from 13.8xPE’21E, which is +0.5 SD of its 5-year trading average. While we believe its earnings will expand in 2021E, the stock price seems to priced in, spiked to a pre-trade war level in 2018. We attended an analyst meeting yesterday and came up with key information as followed;</p><div>•HANA 2Q20 recurring profit was Bt487m (+12%YoY, Flat QoQ), better than the previous company’s estimation, as an impact from Covid-19 was quite manageable.</div><div></div><div>•The negative impact on revenue from Covid-19 should have bottomed out. Its revenue will recover from 3Q20E onwards.</div><div></div><div>•However, the margin in 3Q20E should be softer than 1H20, as Baht currency has appreciated, recently, compared to a depreciation trend in the first half.</div><div></div><div>•We revised up 2020-22E earning by 63%, 18%, and 6%, respectively.</div><div></div><div>
<p><strong>Background</strong>: Hana Microelectronics Public Company Limited is an electronics manufacturing service provider. The company's main product groups include 1) printed circuit board assembly (PCBA); 2) integrated circuit (IC) assembly and testing, and 3) microdisplay assembly. Currently, the company has six manufacturing facilities, which are located in Lamphun and Ayutthaya provinces in Thailand, Jiaxing in China, Ohio in the US, and a new plant in Koh Kong, Cambodia.</p>
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We maintain HOLD rating for HANA with a new 2021E target price of Bt38.50, derived from 13.8xPE’21E, which is +0.5 SD of its 5-year trading average. While we believe its earnings will expand in 2021E, the stock price seems to priced in, spiked to a pre-trade war level in 2018. We attended an analyst meeting yesterday and came up with key information as followed;•HANA 2Q20 recurring profit was Bt487m (+12%YoY, Flat QoQ), better than the previous company’s estimation, as an impact from Covid-19 was quite manageable.•The negative impact on revenue from Covid-19 should have bottomed out. Its revenue will recover from 3Q20E onwards.•However, the margin in 3Q20E should be softer than 1H20, as Baht currency has appreciated, recently, compared to a depreciation trend in the first half.•We revised up 2020-22E earning by 63%, 18%, and 6%, respectively.
Background: Hana Microelectronics Public Company Limited is an electronics manufacturing service provider. The company's main product groups include 1) printed circuit board assembly (PCBA); 2) integrated circuit (IC) assembly and testing, and 3) microdisplay assembly. Currently, the company has six manufacturing facilities, which are located in Lamphun and Ayutthaya provinces in Thailand, Jiaxing in China, Ohio in the US, and a new plant in Koh Kong, Cambodia.



<p><strong>We initiate coverage of HANA with a BUY rating and a 2021E target price of Bt32.00, derived from 13.6x PE’21E, which is +0.5 SD of its 5-year trading average.</strong></p>
<p>The story:</p>
<div>•Leading electronics manufacturing service provider in SE Asia</div>
<div>•Cheap valuation with net cash status</div>
<div>•Long-awaited baht weakness has come</div>
<div>•Beneficiary of the shift to 5G communications</div>
<div>•Expect earnings to turn around from 2021 onward</div>
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<p>Risks:</p>
<div>•Foreign exchange rate fluctuation</div>
<div>•Raw material price fluctuation</div>
<div>•Economic slowdown</div>
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<p><strong>Background</strong>: Hana Microelectronics Public Company Limited is an electronics manufacturing service provider. The company's main product groups include 1) printed circuit board assembly (PCBA); 2) integrated circuit (IC) assembly and testing; and 3) microdisplay assembly. Currently, the company has six manufacturing facilities, which are located in Lamphun and Ayutthaya provinces in Thailand, Jiaxing in China, Ohio in the US and a new plant in Koh Kong, Cambodia.</p>

We initiate coverage of HANA with a BUY rating and a 2021E target price of Bt32.00, derived from 13.6x PE’21E, which is +0.5 SD of its 5-year trading average.
The story:
•Leading electronics manufacturing service provider in SE Asia
•Cheap valuation with net cash status
•Long-awaited baht weakness has come
•Beneficiary of the shift to 5G communications
•Expect earnings to turn around from 2021 onward

 

Risks:
•Foreign exchange rate fluctuation
•Raw material price fluctuation
•Economic slowdown

Background: Hana Microelectronics Public Company Limited is an electronics manufacturing service provider. The company's main product groups include 1) printed circuit board assembly (PCBA); 2) integrated circuit (IC) assembly and testing; and 3) microdisplay assembly. Currently, the company has six manufacturing facilities, which are located in Lamphun and Ayutthaya provinces in Thailand, Jiaxing in China, Ohio in the US and a new plant in Koh Kong, Cambodia.

HANA: Cheap Valuation and Clean Balance Sheet

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: Covid-19 Impact Has Passed

We maintain HOLD rating for HANA with a new 2021E target price of Bt38.50, derived from 13.8xPE’21E, which is +0.5 SD of its 5-year trading...

Pi Securities PCL, Thailand

HANA: Cheap Valuation and Clean Balance Sheet

We initiate coverage of HANA with a BUY rating and a 2021E target price of Bt32.00, derived from 13.6x PE’21E, which is +0.5 SD of its 5-year...

Pi Securities PCL, Thailand

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