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

We initiate coverage of CBG with a HOLD rating, based on a target price of Bt89, which is derived from 33xPE’20E, close to the average of the Thailand Beverage group.
The story:
<ul>
<li>Expanding customer base through new energy drink product</li>
<li>Potential growth from overseas markets</li>
<li>Ample room to improve gross profit margin</li>
<li>ICUK group turnaround</li>
<li>Benefit from growth of global energy drinks market</li>
</ul>
Risks:
<ul>
<li>Raw material price fluctuation</li>
<li>Exchange rate fluctuation</li>
<li>Highly competitive industry</li>
</ul>
Background: Carabao Group Public Company Limited (CBG) was established and incorporated on Aug. 22, 2001. CBG engages in manufacturing, marketing, selling and distributing energy drinks and other beverages in a vertically integrated manner starting with upstream production of key packaging materials, i.e. glass bottles and aluminum cans, down the chain to the bottling and canning of finished products as well as distribution-channel management both domestically and internationally. Moreover, the company has expanded its operation into Europe, most notably the UK.

We initiate coverage of CBG with a HOLD rating, based on a target price of Bt89, which is derived from 33xPE’20E, close to the average of the Thailand Beverage group.
The story:

Expanding customer base through new energy drink product
Potential growth from overseas markets
Ample room to improve gross profit margin
ICUK group turnaround
Benefit from growth of global energy drinks market

Risks:

Raw material price fluctuation
Exchange rate fluctuation
Highly competitive industry

Background: Carabao Group Public Company Limited (CBG) was established and incorporated on Aug. 22, 2001. CBG engages in manufacturing, marketing, selling and distributing energy drinks and other beverages in a vertically integrated manner starting with upstream production of key packaging materials, i.e. glass bottles and aluminum cans, down the chain to the bottling and canning of finished products as well as distribution-channel management both domestically and internationally. Moreover, the company has expanded its operation into Europe, most notably the UK.

CBG: Valuation Running Ahead of Fundamentals

We initiate coverage on MEGA with a BUY rating and based on a target price of Bt43, which is derived from the DCF methodology (WACC 12.5% and terminal growth 0%), or equivalent to 27.9xPE’18E, which is a 20% discount from its domestic peers.
The story:
<ul>
<li>Solid position to enjoy growing consumer health industry trend</li>
<li>Umbrella brand strategy to extend market reach</li>
<li>Leading distributor in Indochina market, especially Myanmar</li>
<li>Cash-rich firm poised for ample upside from inorganic growth</li>
</ul>
Risks:
<ul>
<li>Currency fluctuations</li>
<li>Highly competitive industry</li>
<li>Unpredictable political situation in Myanmar</li>
</ul>
Background: Mega Lifesciences Public Company Limited (MEGA) was established in 1982. It is engaged in manufacturing, marketing, selling and distributing quality pharmaceutical, nutraceutical products and Fast-Moving Consumer Goods (FMCG). Headquartered in Bangkok, the company has a presence in 32 countries.  Its manufacturing facilities in Thailand and Australia have received international accreditation from reputed health authorities around the world with respect to good manufacturing practices. The company exports to Asia-Pacific, Middle Eastern, African, CIS, Latin American and European countries.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/063/483/original/mega3.JPG?1536640484" class="editor-image img-responsive" data-smartkarma-image-id="63483"></figure>
<div class="content-caption">Sources: CGS Research, company data</div>

We initiate coverage on MEGA with a BUY rating and based on a target price of Bt43, which is derived from the DCF methodology (WACC 12.5% and terminal growth 0%), or equivalent to 27.9xPE’18E, which is a 20% discount from its domestic peers.
The story:

Solid position to enjoy growing consumer health industry trend
Umbrella brand strategy to extend market reach
Leading distributor in Indochina market, especially Myanmar
Cash-rich firm poised for ample upside from inorganic growth

Risks:

Currency fluctuations
Highly competitive industry
Unpredictable political situation in Myanmar

Background: Mega Lifesciences Public Company Limited (MEGA) was established in 1982. It is engaged in manufacturing, marketing, selling and distributing quality pharmaceutical, nutraceutical products and Fast-Moving Consumer Goods (FMCG). Headquartered in Bangkok, the company has a presence in 32 countries.  Its manufacturing facilities in Thailand and Australia have received international accreditation from reputed health authorities around the world with respect to good manufacturing practices. The company exports to Asia-Pacific, Middle Eastern, African, CIS, Latin American and European countries.

Sources: CGS Research, company data

MEGA: Supplement Maker Spreads Healthy Message in Booming Region

Thailand

Malee Group Public Company Limited produces and exports canned food and drink products including fruits, fruit juices, juice concentrate, vegetables and meat under its Malee, First Choice, Hunter and Farmer brand names.

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Malee Group PCL (MALEE TB)

CBG: Valuation Running Ahead of Fundamentals

We initiate coverage of CBG with a HOLD rating, based on a target price of Bt89, which is derived from 33xPE’20E, close to the average of the...

Pi Securities PCL, Thailand

MEGA: Supplement Maker Spreads Healthy Message in Booming Region

We initiate coverage on MEGA with a BUY rating and based on a target price of Bt43, which is derived from the DCF methodology (WACC 12.5% and...

Pi Securities PCL, Thailand

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