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

<p><strong>We expect the PSL’s earnings to turn positive in 4Q20 as TC rate is recovering back to above breakeven level owing to strong demand recovery after the pandemic and easing fleet supply glut issue. Looking forward to 2021E, we forecast the company to book the annual net profit for the first time in the past three years driven by the same factor mentioned above.</strong></p><div><strong>• Positive outlook for TC rate in 2021</strong></div><div></div><div><strong>• Recovery in demand side</strong></div><div></div><div><strong>• Revise up earnings by 570% in 2021E and 47% in 2022E.</strong></div><p></p><p><strong>We maintain our BUY rating with a new target price of Bt10.0 (Previous TP: Bt7.10) derived from 1.43xPBV’21E, equivalent to +1S.D. of ten year average historical PBV. We forecast core earnings to turn positive in 2021E onwards on the back of TC rate recovery following an improving global fleet demand-supply balance.</strong></p>

We expect the PSL’s earnings to turn positive in 4Q20 as TC rate is recovering back to above breakeven level owing to strong demand recovery after the pandemic and easing fleet supply glut issue. Looking forward to 2021E, we forecast the company to book the annual net profit for the first time in the past three years driven by the same factor mentioned above.• Positive outlook for TC rate in 2021• Recovery in demand side• Revise up earnings by 570% in 2021E and 47% in 2022E.We maintain our BUY rating with a new target price of Bt10.0 (Previous TP: Bt7.10) derived from 1.43xPBV’21E, equivalent to +1S.D. of ten year average historical PBV. We forecast core earnings to turn positive in 2021E onwards on the back of TC rate recovery following an improving global fleet demand-supply balance.

PSL: Positive Outlook for Dry Bulk Carrier Market in 2021-22E

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

Kerry Express Thailand / Equity Capital Markets

<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/179/974/original/BANNER-TTOtherDec20_GreyOrange.png?1608781028" class="editor-image img-responsive" data-smartkarma-image-id="179974"></figure></section><p>In a previous note we argued <a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a>, at its IPO price of 28 baht per share, was attractively priced relative to comps in the Chinese express sector.</p><p>However, after shares jumped 83% to 51.25 baht in their trading debut on December 24, KEX's EV/Revenue and EV/EBITDA multiples increased substantially (even as its Chinese comps faded).</p><p>A day after its public debut, KEX is still a unique Thai play on eCommerce and the company enjoys strong market position in a growing segment. However, at 50+ baht per share it is no longer cheap.</p><p>By the way, Merry Christmas!</p>

In a previous note we argued Kerry Express Thailand (KEX TB), at its IPO price of 28 baht per share, was attractively priced relative to comps in the Chinese express sector.However, after shares jumped 83% to 51.25 baht in their trading debut on December 24, KEX's EV/Revenue and EV/EBITDA multiples increased substantially (even as its Chinese comps faded).A day after its public debut, KEX is still a unique Thai play on eCommerce and the company enjoys strong market position in a growing segment. However, at 50+ baht per share it is no longer cheap.By the way, Merry Christmas!

Kerry Express Thailand: Just One Day Into Public Life, KEX Suddenly Looks Expensive

<p>In an updated filing, <a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a> indicated it could sell as many as 300 mn new shares in its planned IPO. Many media reports have suggested the company hopes to raise about US$300 mn in the offering, suggesting KEX will come to market at around 30 baht per share.</p><p>In this note, we try to answer the following questions regarding KEX's valuation:</p><ul>
<li>What are the most useful 'comps' for KEX? </li>
<li>What are some appropriate valuation multiples to use in comparing KEX to peers?</li>
<li>How does KEX's valuation at 30 baht per share compare to the peer group we've identified?</li>
<li>What factors could support either a premium or discount valuation for KEX versus peers?</li>
</ul><p>At 30 baht per share (which implies market capitalization of US$1.7 bn), KEX would <em>not</em> be overvalued relative to peers, in our view, and there are reasons KEX could eventually demand a premium valuation relative to other express companies.</p>

In an updated filing, Kerry Express Thailand (KEX TB) indicated it could sell as many as 300 mn new shares in its planned IPO. Many media reports have suggested the company hopes to raise about US$300 mn in the offering, suggesting KEX will come to market at around 30 baht per share.In this note, we try to answer the following questions regarding KEX's valuation:
What are the most useful 'comps' for KEX? 
What are some appropriate valuation multiples to use in comparing KEX to peers?
How does KEX's valuation at 30 baht per share compare to the peer group we've identified?
What factors could support either a premium or discount valuation for KEX versus peers?
At 30 baht per share (which implies market capitalization of US$1.7 bn), KEX would not be overvalued relative to peers, in our view, and there are reasons KEX could eventually demand a premium valuation relative to other express companies.

Kerry Express Thailand (KEX) IPO: Approach to Valuation

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>For this next session of our Corporate Webinars, we are joined by the CEO of <a href="https://www.smartkarma.com/entities/precious-shipping-pcl" target="_blank" data-smartkarma-citation="entities:13819:1" rel="noopener">Precious Shipping (PSL TB)</a>, Khalid Hashim, who will present some key aspects about the company and engage in a fireside chat with Smartkarma Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a>.</p>
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<p>Every week, Corporate Webinars by <a href="https://www.smartkarma.com/home/corporate-solutions/" target="_blank" rel="noopener">Smartkarma Corporate Solutions</a> feature discussions with Corporate IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.</p>
<h3>This Corporate Webinar will be hosted on Tuesday, 17/November/2020, 5:00PM SGT/HKT, 4:00PM ICT.</h3>
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<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=83678405749" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
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For this next session of our Corporate Webinars, we are joined by the CEO of Precious Shipping (PSL TB), Khalid Hashim, who will present some key aspects about the company and engage in a fireside chat with Smartkarma Insight Provider Angus Mackintosh.

Every week, Corporate Webinars by Smartkarma Corporate Solutions feature discussions with Corporate IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.
This Corporate Webinar will be hosted on Tuesday, 17/November/2020, 5:00PM SGT/HKT, 4:00PM ICT.

Register for the Webinar here



Smartkarma Corporate Webinar | Shipping: The Impact of COVID-19 and PSL’s Response

<p><strong>We initiate coverage of PSL with a BUY rating, based on a target price of Bt7.10, which is derived from 1.0xPBV’21E, its 10-year average.</strong></p>
<p><strong>The Story:</strong></p>
<div>• Solid position in bloodied industry</div>
<div>• Expected TC rate recovery in 2021</div>
<div>• Effective cost management is its core competency</div>
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</div>
<p><strong>Risks:</strong></p>
<div>• Charter rate fluctuation</div>
<div>• Exchange rate fluctuation</div>
<div>• Outcome of arbitration with Chinese shipyard</div>

We initiate coverage of PSL with a BUY rating, based on a target price of Bt7.10, which is derived from 1.0xPBV’21E, its 10-year average.
The Story:
• Solid position in bloodied industry
• Expected TC rate recovery in 2021
• Effective cost management is its core competency

 

Risks:
• Charter rate fluctuation
• Exchange rate fluctuation
• Outcome of arbitration with Chinese shipyard

PSL: Another Opportunity at the Bottom of Dry Bulk Cycle

Thailand

Precious Shipping Public Company Limited is a ship owner providing regional marine shipping services. The Company operates in the tramp freight market sector where its vessels are employed on a time charter as well as voyage charter basis.  Precious Shipping has a network of shipping agents worldwide.

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Precious Shipping (PSL TB)

PSL: Positive Outlook for Dry Bulk Carrier Market in 2021-22E

We expect the PSL’s earnings to turn positive in 4Q20 as TC rate is recovering back to above breakeven level owing to strong demand recovery after...

Pi Securities PCL, Thailand

Kerry Express Thailand: Just One Day Into Public Life, KEX Suddenly Looks Expensive

After it jumped by 83% to 51.25 baht per share in its trading debut, it's suddenly much tougher to argue that KEX is attractively priced versus peers.

Tracking Traffic

Kerry Express Thailand (KEX) IPO: Approach to Valuation

What's the right valuation approach to Kerry Express (KEX), which hopes to complete its IPO in Thailand in the coming weeks?

Tracking Traffic

Smartkarma Corporate Webinar | Shipping: The Impact of COVID-19 and PSL’s Response

Tune in on 17 November, 5PM SGT/4PM ICT to hear from the CEO of Precious Shipping, Khalid Hashim, on the impact of COVID-19 on shipping and how his...

Smartkarma Research

PSL: Another Opportunity at the Bottom of Dry Bulk Cycle

We initiate coverage of PSL with a BUY rating, based on a target price of Bt7.10, which is derived from 1.0xPBV’21E, its 10-year average. The...

Pi Securities PCL, Thailand

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