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

MAJOR 4Q18 net profit was Bt259m (+247%YoY, +26%QoQ). The impressive earnings was driven by solid guests admission (+97%YoY).
<ul>
<li>4Q18 revenue was Bt3.0bn (+59%YoY, +44% QoQ). Interesting movies lineup was the factor, pushing admission revenue (+88%YoY) and concession revenue (+70%YoY).</li>
<li>Gross profit margin was strong at 37.6% from 28.7% in 4Q17 and 30.8% in 3Q18, thank to the higher contribution of concession revenue, which has decent margin.</li>
<li>SG&amp;A to sales was under control at 27.0%, compared to 34.3% in 4Q17 and 26.7% in 3Q18.</li>
</ul>
We maintain a BUY rating on MAJOR with 2019E target price of Bt31.00, derived from a PER of 24.2x, which is +1 SD of its 3-year trading average. We expect MAJOR to continuously deliver robust earnings in 2019E, given the fascinating movies lineup and advertising sales model changing from direct selling to selling through agencies.

MAJOR 4Q18 net profit was Bt259m (+247%YoY, +26%QoQ). The impressive earnings was driven by solid guests admission (+97%YoY).

4Q18 revenue was Bt3.0bn (+59%YoY, +44% QoQ). Interesting movies lineup was the factor, pushing admission revenue (+88%YoY) and concession revenue (+70%YoY).
Gross profit margin was strong at 37.6% from 28.7% in 4Q17 and 30.8% in 3Q18, thank to the higher contribution of concession revenue, which has decent margin.
SG&amp;A to sales was under control at 27.0%, compared to 34.3% in 4Q17 and 26.7% in 3Q18.

We maintain a BUY rating on MAJOR with 2019E target price of Bt31.00, derived from a PER of 24.2x, which is +1 SD of its 3-year trading average. We expect MAJOR to continuously deliver robust earnings in 2019E, given the fascinating movies lineup and advertising sales model changing from direct selling to selling through agencies.

We initiate coverage on MAJOR with a BUY rating and a 2019E target price ofBt31.0, derived from a PER of 24.2x, which is +1 SD of its 3-year trading average.
The story:
<ul>
<li>Domestic market space for scalability is most impressive</li>
<li>Takes the fight to global cinema peers</li>
<li>To screen impressive movie line-up in 2019</li>
<li>Ad expenditure on cinema outperforms the industry</li>
<li>Expected 6% EPS growth in 2019-20E</li>
</ul>

Risks: Lack of interesting movie line-up, highly competitive sector, branch expansion

We initiate coverage on MAJOR with a BUY rating and a 2019E target price ofBt31.0, derived from a PER of 24.2x, which is +1 SD of its 3-year trading average.
The story:

Domestic market space for scalability is most impressive
Takes the fight to global cinema peers
To screen impressive movie line-up in 2019
Ad expenditure on cinema outperforms the industry
Expected 6% EPS growth in 2019-20E


Risks: Lack of interesting movie line-up, highly competitive sector, branch expansion

MAJOR: Blockbuster Year Ahead for Out-Of-Home Entertainment Star

Thailand

Major Cineplex Group Public Company Limited operates movie theater chain under Major Cineplex name, and bowling alley chain under Major Bowl name. The Company also provides theater advertising services and concession stand rentals in its movie and bowling complexes.

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Major Cineplex Group (MAJOR TB)

MAJOR: Impressive 4Q18 Earnings

MAJOR 4Q18 net profit was Bt259m (+247%YoY, +26%QoQ). The impressive earnings was driven by solid guests admission (+97%YoY). 4Q18 revenue was...

Pi Securities PCL, Thailand

MAJOR: Blockbuster Year Ahead for Out-Of-Home Entertainment Star

We initiate coverage on MAJOR with a BUY rating and a 2019E target price ofBt31.0, derived from a PER of 24.2x, which is +1 SD of its 3-year...

Pi Securities PCL, Thailand

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