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 anticipate strong earnings recovery along with slowdown in number of COVID-19 cases.We reiterate BUY rating for M with a target price of Bt61.0 based on 25xPE’22E Asia ex-Japan consumer</li>
<li>We expect M to report net profit of Bt224m (-36%YoY) in 4Q21 from a loss in 2Q21-3Q21 supported by 1) recovery in SSSG after lockdown while resuming dine-in services together </li>
<li>Same-Stores-Sales-Growth (SSSG) in three main brands are likely to recover in 4Q21.</li>
</ul>


We anticipate strong earnings recovery along with slowdown in number of COVID-19 cases.We reiterate BUY rating for M with a target price of Bt61.0 based on 25xPE’22E Asia ex-Japan consumer
We expect M to report net profit of Bt224m (-36%YoY) in 4Q21 from a loss in 2Q21-3Q21 supported by 1) recovery in SSSG after lockdown while resuming dine-in services together 
Same-Stores-Sales-Growth (SSSG) in three main brands are likely to recover in 4Q21.


M: Expect 4Q21 Performance to Turn Profit

<p><strong>We anticipate strong earnings recovery along with slowdown in number of COVID-19 cases. We reiterate BUY rating for M with a target price of Bt61.0 based on 25xPE’22E, Asia ex-Japan consumer staple sector average.</strong></p><div>• We expect M to report net loss of Bt210m in 3Q21, compared with Bt99m loss in 2Q21 and net profit of Bt465m in 3Q20. This pressured by a negative same-store-sales-growth (SSSG) at range of 40%-50% due to a restriction for dine-in services during the period.</div><div></div><div>• We expect M to report net profit in 4Q21 from a loss in 2Q21-3Q21 supported by 1) recovery in SSSG after lockdown while resuming dine-in services together with restoring consumer confidence following an increase in vaccination rate, 2) new stores expansion as the management plan to open 18 new stores in 4Q21 (+2%QoQ), after shut down number of stores in the past five quarters, and, 3.) expectation for the government stimulus scheme.</div><div></div><div>• We expect strong earnings recovery in 2022E (from Bt43m loss in 2021 to Bt2.2bn).</div>

We anticipate strong earnings recovery along with slowdown in number of COVID-19 cases. We reiterate BUY rating for M with a target price of Bt61.0 based on 25xPE’22E, Asia ex-Japan consumer staple sector average.• We expect M to report net loss of Bt210m in 3Q21, compared with Bt99m loss in 2Q21 and net profit of Bt465m in 3Q20. This pressured by a negative same-store-sales-growth (SSSG) at range of 40%-50% due to a restriction for dine-in services during the period.• We expect M to report net profit in 4Q21 from a loss in 2Q21-3Q21 supported by 1) recovery in SSSG after lockdown while resuming dine-in services together with restoring consumer confidence following an increase in vaccination rate, 2) new stores expansion as the management plan to open 18 new stores in 4Q21 (+2%QoQ), after shut down number of stores in the past five quarters, and, 3.) expectation for the government stimulus scheme.• We expect strong earnings recovery in 2022E (from Bt43m loss in 2021 to Bt2.2bn).

<p><strong>Yesterday analyst meeting came out with a neutral tone. SSSG remain dropped at -50%-60% in July 2021. However, we expect SSSG in three main brands are likely to recover MoM in September 2021 after a slowdown number of COVID-19 cases and expect lockdown easing in September 2021.</strong></p><div>• We expect M to report net loss in 3Q21 from a loss of Bt99m in 2Q21 and net profit of Bt465m in 3Q20. However, it should be the bottom quarter in 2021 supported by a slowdown number of COVID-19 cases and an increase in number of vaccinated.</div><div></div><div>• We expect strong earnings recover in 2022 onwards supported by allow dine-in services and improving customers confidence after high vaccination rate.</div><div></div><div><strong>A sign for earnings recovery as a slowdown number of COVID-19 cases. We reiterate BUY with a target price of Bt61 based on 25xPE’22E, closed to the Asia ex-Japan consumer staple sector.</strong></div>

Yesterday analyst meeting came out with a neutral tone. SSSG remain dropped at -50%-60% in July 2021. However, we expect SSSG in three main brands are likely to recover MoM in September 2021 after a slowdown number of COVID-19 cases and expect lockdown easing in September 2021.• We expect M to report net loss in 3Q21 from a loss of Bt99m in 2Q21 and net profit of Bt465m in 3Q20. However, it should be the bottom quarter in 2021 supported by a slowdown number of COVID-19 cases and an increase in number of vaccinated.• We expect strong earnings recover in 2022 onwards supported by allow dine-in services and improving customers confidence after high vaccination rate.A sign for earnings recovery as a slowdown number of COVID-19 cases. We reiterate BUY with a target price of Bt61 based on 25xPE’22E, closed to the Asia ex-Japan consumer staple sector.

M: Expect 3Q21 Earnings Will Be the Bottom Quarter

<p><strong>Yesterday analyst meeting came out with a positive tone. SSSG recovered MoM in Feb 2021. Moreover, we believe SSSG will turn positive in March 2021.</strong></p><div>• We expect rapid SSSG recovery in 2Q21 after vaccine rollout. We anticipate MK’SSSG, Yayoi’SSSG and LCS’SSSG to turn positive in 2Q21 onwards.</div><div></div><div>• We still like M for its long-term outlook on the backs of; 1) dominant position in chain restaurant in Thailand with 722 branches coverage nationwide, 2) own shared kitchen with strong logistic system and distribution center in Thailand, 3) an opportunity to expand Laem Charoen Seafood chains in overseas via franchising, 4) solid net cash position for upside to M&amp;A.</div><p><strong>We upgrade M to BUY from HOLD rating after we roll over target price to Bt72 based on 25xPE’22E, closed to the Asia ex-Japan consumer staple sector. Our target price upward revision reflects normal operating performance during recovery period after the pandemic.</strong></p>

Yesterday analyst meeting came out with a positive tone. SSSG recovered MoM in Feb 2021. Moreover, we believe SSSG will turn positive in March 2021.• We expect rapid SSSG recovery in 2Q21 after vaccine rollout. We anticipate MK’SSSG, Yayoi’SSSG and LCS’SSSG to turn positive in 2Q21 onwards.• We still like M for its long-term outlook on the backs of; 1) dominant position in chain restaurant in Thailand with 722 branches coverage nationwide, 2) own shared kitchen with strong logistic system and distribution center in Thailand, 3) an opportunity to expand Laem Charoen Seafood chains in overseas via franchising, 4) solid net cash position for upside to M&amp;A.We upgrade M to BUY from HOLD rating after we roll over target price to Bt72 based on 25xPE’22E, closed to the Asia ex-Japan consumer staple sector. Our target price upward revision reflects normal operating performance during recovery period after the pandemic.

M: Expect 1Q21 Earnings Will Be the Bottom Quarter

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p><a href="https://www.smartkarma.com/entities/thai-union-group-pcl" target="_blank" data-smartkarma-citation="entities:161:1" rel="noopener">Thai Union Group (TU TB)</a> is a Thai listed global food company and is a leading producer of tuna and seafood. The company saw a recent sell-off due to a COVID-19 outbreak at the Mahachai seafood market in Samut Sakhon province, which seems unjustified since it has little exposure. </p>
<p>The company has confirmed that its own seafood facilities in Thailand are enclosed and it has seen little impact from this latest outbreak. </p>
<p>As of 6th January, <a href="https://www.smartkarma.com/entities/thai-union-group-pcl" target="_blank" data-smartkarma-citation="entities:161:1" rel="noopener">Thai Union Group (TU TB)</a> had tested 85% of employees, or 23,630 workers, in Samut Sakhon province, where a cluster of cases emerged at the market late last year.</p>
<p>The company has not yet shut any plants in the Samut Sakhon Province but a two-week shutdown could impact about 2% of total revenue.</p>
<p><a href="https://www.smartkarma.com/entities/thai-union-group-pcl" target="_blank" data-smartkarma-citation="entities:161:1" rel="noopener">Thai Union Group (TU TB)</a> booked record earnings of Bt2.06bn in 9M2020 net profit growth of +50% YoY and +20% QoQ on the back of organic sales growth of +9.3% on volume growth of +5.2%, despite COVID-19.</p>
<p>It also saw significant loss reductions at Red Lobster which was acquired in 2019 and has successfully completed a restructuring of the company's shareholding structure bringing in Seafood Alliance as the second-largest shareholder. </p>
<p><a href="https://www.smartkarma.com/entities/thai-union-group-pcl" target="_blank" data-smartkarma-citation="entities:161:1" rel="noopener">Thai Union Group (TU TB)</a>'s valuations look relatively attractive from a historic perspective, with the company trading on 11.6x FY21E and 10.7x FY22E PER, with a flat EPS for FY21E. We continue to take a positive view on the company, especially given its global credentials.</p>

Thai Union Group (TU TB) is a Thai listed global food company and is a leading producer of tuna and seafood. The company saw a recent sell-off due to a COVID-19 outbreak at the Mahachai seafood market in Samut Sakhon province, which seems unjustified since it has little exposure. 
The company has confirmed that its own seafood facilities in Thailand are enclosed and it has seen little impact from this latest outbreak. 
As of 6th January, Thai Union Group (TU TB) had tested 85% of employees, or 23,630 workers, in Samut Sakhon province, where a cluster of cases emerged at the market late last year.
The company has not yet shut any plants in the Samut Sakhon Province but a two-week shutdown could impact about 2% of total revenue.
Thai Union Group (TU TB) booked record earnings of Bt2.06bn in 9M2020 net profit growth of +50% YoY and +20% QoQ on the back of organic sales growth of +9.3% on volume growth of +5.2%, despite COVID-19.
It also saw significant loss reductions at Red Lobster which was acquired in 2019 and has successfully completed a restructuring of the company's shareholding structure bringing in Seafood Alliance as the second-largest shareholder. 
Thai Union Group (TU TB)'s valuations look relatively attractive from a historic perspective, with the company trading on 11.6x FY21E and 10.7x FY22E PER, with a flat EPS for FY21E. We continue to take a positive view on the company, especially given its global credentials.

Thai Union Group (TU TB) - Enter the Chicken of the Sea

Thailand

MK Restaurants Group PCL operates restaurants. The Company supplies traditional Thai food.

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MK Restaurants Group (M TB)

M: Expect 4Q21 Performance to Turn Profit

We anticipate strong earnings recovery along with slowdown in number of COVID-19 cases. We reiterate BUY rating for M with a target price of Bt61.0...

Pi Securities PCL, Thailand

M: Expect 3Q21 Earnings to Remain Weak

We anticipate strong earnings recovery along with slowdown in number of COVID-19 cases. We reiterate BUY rating for M with a target price of Bt61.0...

Pi Securities PCL, Thailand

M: Expect 3Q21 Earnings Will Be the Bottom Quarter

Yesterday analyst meeting came out with a neutral tone. SSSG remain dropped at -50%-60% in July 2021. However, we expect SSSG in three main brands...

Pi Securities PCL, Thailand

M: Expect 1Q21 Earnings Will Be the Bottom Quarter

Yesterday analyst meeting came out with a positive tone. SSSG recovered MoM in Feb 2021. Moreover, we believe SSSG will turn positive in March 2021.

Pi Securities PCL, Thailand

Thai Union Group (TU TB) - Enter the Chicken of the Sea

Thai Union is truly a global food provider, with its leading position in both canned tuna and chilled and frozen seafoods. The impact of the latest...

Angus Mackintosh

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