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>We raise our rating to Buy (previously Neutral) with a more positive view on the fundamental valuation (upgraded to buy from overvalued).</li><li>This reflects that KCE’s stock underperformance (- 23% vs. the SET at +11%) over the past three months has largely priced in the weak 3Q24 results while also accounting for the potential risk of earnings forecast revisions.</li><li>The stock entails limited tactical downside risk, as the current stock price is trading at a discount to its fair value compared to the 6-month historical average.</li></ul>

We raise our rating to Buy (previously Neutral) with a more positive view on the fundamental valuation (upgraded to buy from overvalued).This reflects that KCE’s stock underperformance (- 23% vs. the SET at +11%) over the past three months has largely priced in the weak 3Q24 results while also accounting for the potential risk of earnings forecast revisions.The stock entails limited tactical downside risk, as the current stock price is trading at a discount to its fair value compared to the 6-month historical average.

Kce Electronics - 3Q24 Earnings Impacted by Stronger Baht

<ul><li>We maintain our Neutral recommendation and the FY2024E fair value of Bt35.50. KCE’s core earnings grew YoY and QoQ in 1Q24, mainly from a rebound in the gross margin.</li><li>The result was slightly above our expectation, comprising 25% of our FY2024E forecast.</li><li>While we maintain our Neutral recommendation, our valuation metrics indicate that it could be upgraded to Outperform, especially as the current valuation has been upgraded to overvalued from sell previously. </li></ul>

We maintain our Neutral recommendation and the FY2024E fair value of Bt35.50. KCE’s core earnings grew YoY and QoQ in 1Q24, mainly from a rebound in the gross margin.The result was slightly above our expectation, comprising 25% of our FY2024E forecast.While we maintain our Neutral recommendation, our valuation metrics indicate that it could be upgraded to Outperform, especially as the current valuation has been upgraded to overvalued from sell previously. 

Kce Electronics - Earnings Growth in 1Q24 Driven by Strong Gross Margin

<ul><li>We initiate our coverage on KCE with a Neutral rating and a FY2024E fair value of Bt35.50, based on a required rate of return of 4.91%.</li><li>While we believe KCE’s FY2024E core earnings will rebound to Bt2.1bn (+20% YoY), driven by cost savings, product mix improvement, and increased sales, we view the current valuation as unfavorable.</li><li>Our model also suggests that KCE’s valuation will remain unattractive until FY2025E (FV: Bt40.75), and a rerating to a Buy would only be possible in FY2026E (FV: Bt52.50) on the back of continued EV momentum and demand for safety auxiliary systems (ADAS) driving KCE’s sales.</li></ul>

We initiate our coverage on KCE with a Neutral rating and a FY2024E fair value of Bt35.50, based on a required rate of return of 4.91%.While we believe KCE’s FY2024E core earnings will rebound to Bt2.1bn (+20% YoY), driven by cost savings, product mix improvement, and increased sales, we view the current valuation as unfavorable.Our model also suggests that KCE’s valuation will remain unattractive until FY2025E (FV: Bt40.75), and a rerating to a Buy would only be possible in FY2026E (FV: Bt52.50) on the back of continued EV momentum and demand for safety auxiliary systems (ADAS) driving KCE’s sales.

Kce Electronics - Cost Savings and Product Mix Should Help Earnings Recover

Thematic (Sector/Industry)

<ul><li>The SET was volatile in a tight range and faced profit taking after surging quickly.</li><li>However, the MPC meeting results were as expected, while the increase of energy, banking, petrol and commerce stocks provided a boost.</li><li>Consequently, the index was able to close up, even though foreign investors turned to sell.</li></ul>

The SET was volatile in a tight range and faced profit taking after surging quickly.However, the MPC meeting results were as expected, while the increase of energy, banking, petrol and commerce stocks provided a boost.Consequently, the index was able to close up, even though foreign investors turned to sell.

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

<ul>
<li>We downgrade to HOLD rating and cut our TP to Bt44.75(-35% from previous TP), based on 22.3xPE’23E(-0.5S.D.of 5-Year trading history).Despite 3Q22 earnings was higher than expected, our outlook for 2023</li>
<li>Analyst Meeting Details Management believes that, in 2023, the company’s revenue will grow between 5% to 10% YoY and will attain gross margin of 26% to 27% assuming</li>
<li>We believe that achieving revenue growth of 5% to 10% will be difficult considering based on a potential recession and high prolonged interest rates impacting automobile sales.</li>
</ul>


We downgrade to HOLD rating and cut our TP to Bt44.75(-35% from previous TP), based on 22.3xPE’23E(-0.5S.D.of 5-Year trading history).Despite 3Q22 earnings was higher than expected, our outlook for 2023
Analyst Meeting Details Management believes that, in 2023, the company’s revenue will grow between 5% to 10% YoY and will attain gross margin of 26% to 27% assuming
We believe that achieving revenue growth of 5% to 10% will be difficult considering based on a potential recession and high prolonged interest rates impacting automobile sales.


KCE : Recession Should Impact 2023 Growth

Thailand

KCE Electronics Public Company Limited and its subsidiaries manufacture and export single-layered, multi-layered, and double-sided printed circuit boards (PCBs) under its KCE trademark.  Multi-layered PCBs are used mainly in high technology equipment and high precision instruments.  Double-sided PCBs are used largely in telecommunication and computing equipment.

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KCE Electronics PCL (KCE TB)

Kce Electronics - 3Q24 Earnings Impacted by Stronger Baht

We raise our rating to Buy (previously Neutral) with a more positive view on the fundamental valuation (upgraded to buy from overvalued).

Krungthai XSpring

Kce Electronics - Earnings Growth in 1Q24 Driven by Strong Gross Margin

We maintain our Neutral recommendation and the FY2024E fair value of Bt35.50. KCE’s core earnings grew YoY and QoQ in 1Q24, mainly from a rebound...

Krungthai XSpring

Kce Electronics - Cost Savings and Product Mix Should Help Earnings Recover

We initiate our coverage on KCE with a Neutral rating and a FY2024E fair value of Bt35.50, based on a required rate of return of 4.91%.

Krungthai XSpring

Technical Analysis - Feb 8, 2024

The SET was volatile in a tight range and faced profit taking after surging quickly. However, the MPC meeting results were as expected

Krungthai XSpring

KCE : Recession Should Impact 2023 Growth

We downgrade to HOLD rating and cut our TP to Bt44.75 (-35% from previous TP), based on 22.3xPE’23E (-0.5S.D. of 5-Year trading history). Despite...

Pi Securities PCL, Thailand

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