Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

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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>Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP methodology, implying 15.0xPE’22E.</strong></p><div>• Expect 2Q21 recurring profit to improve both YoY and QoQ on the back of 1) seasonal better contribution of IPP and hydro power plants, and 2) profit recognition from 377MWe new power plant COD in Australia during 1Q-2Q21.</div><div></div><div>• Maintain positive outlook towards the 2021-25 earnings backed by COD of 1.3GWe projects in pipeline, representing a 19% expansion by 2025.</div><div></div><div>• Negative view on investment in PRINC, as we expect no returns (dividend income) in near term (2021-23) and lack of synergy benefits.</div><div></div><div>• The stock is quite attractive given its cheap valuation of 11.4x PE’21E (-1SD, 10-year historical PE) and the current price provides an attractive dividend yield of 5.3-to-5.8% in 2021-23.</div>

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP methodology, implying 15.0xPE’22E.• Expect 2Q21 recurring profit to improve both YoY and QoQ on the back of 1) seasonal better contribution of IPP and hydro power plants, and 2) profit recognition from 377MWe new power plant COD in Australia during 1Q-2Q21.• Maintain positive outlook towards the 2021-25 earnings backed by COD of 1.3GWe projects in pipeline, representing a 19% expansion by 2025.• Negative view on investment in PRINC, as we expect no returns (dividend income) in near term (2021-23) and lack of synergy benefits.• The stock is quite attractive given its cheap valuation of 11.4x PE’21E (-1SD, 10-year historical PE) and the current price provides an attractive dividend yield of 5.3-to-5.8% in 2021-23.

RATCH: Cheap Valuation and Attractive Dividend Yield

<p><strong>Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5, derived using SOTP methodology, implying 16.0xPE’21E.</strong></p><div>• Expect 1Q21 earnings to grow YoY on the back of full quarter contribution from ABEIF, while soften QoQ due to lower contribution from Hongsa.</div><div></div><div>• Maintain positive view towards the 2021-25 earnings backed by COD of 1.6GWe projects in pipeline, representing a 24% expansion by 2025.</div><div></div><div>• The stock is quite attractive given its cheap valuation of 12x PE’21 (-1SD, 10-year historical PE) and the current price provides an attractive dividend yield of 5.1-to-5.8% in 2021-23.</div>

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5, derived using SOTP methodology, implying 16.0xPE’21E.• Expect 1Q21 earnings to grow YoY on the back of full quarter contribution from ABEIF, while soften QoQ due to lower contribution from Hongsa.• Maintain positive view towards the 2021-25 earnings backed by COD of 1.6GWe projects in pipeline, representing a 24% expansion by 2025.• The stock is quite attractive given its cheap valuation of 12x PE’21 (-1SD, 10-year historical PE) and the current price provides an attractive dividend yield of 5.1-to-5.8% in 2021-23.

RATCH: Steady Growth Outlook with Decent Dividend Yield

Thematic (Sector/Industry)

<p><strong>BCPG, GUNKUL, GULF top pick growth stocks</strong></p><ul>
<li>
<strong>Earnings upcycle in 2021:</strong> We expect BCPG, GULF and GUNKUL to achieve 15 to 30% net profit growth during 2021 on the back 12 to 30% power generation capacity expansion in 2020-21 period.</li>
<li>
<strong>Declining gas price to support SPP performance:</strong> The industrial user power sales of SPP players BGRIM, GPSC and GULF (accounting 10 to 20% of the revenue) has rebound to pre – COVID 19 levels as of 4Q20.  We expect the declining gas cost (-10% YoY) will help in revamping the GPM and support the sector performance.</li>
</ul><p><strong>EGCO, RATCH top pick value stocks</strong></p><ul>
<li>
<strong>Cheap valuation:</strong> The stock price of EGCO and RATCH faced 70% and 30% fall in 2020 respectively. The stocks are trading very cheap at 9 to 13x PE’21E and having the companies already overcome the COVID-19 impact we believe the price correction has created an investment opportunity.</li>
<li>
<strong>Decent dividend yield:</strong> We expect RATCH and EGCO to pay a decent dividend yield of 3.3 to 4.4% in 2021.</li>
</ul><p><strong>Maintain HOLD rating on BGRIM, EA and GPSC</strong></p><ul><li>We have a positive view on BGRIM and GPSC as the SPP players will benefit from declining gas price. However, due to limit upside from current share price we maintain the HOLD rating. We recommend to HOLD EA, as the stock performance will depend on new EV-ESS business success and valuation demands.</li></ul>

BCPG, GUNKUL, GULF top pick growth stocks

Earnings upcycle in 2021: We expect BCPG, GULF and GUNKUL to achieve 15 to 30% net profit growth during 2021 on the back 12 to 30% power generation capacity expansion in 2020-21 period.

Declining gas price to support SPP performance: The industrial user power sales of SPP players BGRIM, GPSC and GULF (accounting 10 to 20% of the revenue) has rebound to pre – COVID 19 levels as of 4Q20.  We expect the declining gas cost (-10% YoY) will help in revamping the GPM and support the sector performance.
EGCO, RATCH top pick value stocks

Cheap valuation: The stock price of EGCO and RATCH faced 70% and 30% fall in 2020 respectively. The stocks are trading very cheap at 9 to 13x PE’21E and having the companies already overcome the COVID-19 impact we believe the price correction has created an investment opportunity.

Decent dividend yield: We expect RATCH and EGCO to pay a decent dividend yield of 3.3 to 4.4% in 2021.
Maintain HOLD rating on BGRIM, EA and GPSCWe have a positive view on BGRIM and GPSC as the SPP players will benefit from declining gas price. However, due to limit upside from current share price we maintain the HOLD rating. We recommend to HOLD EA, as the stock performance will depend on new EV-ESS business success and valuation demands.

Thailand Power Sector: Overweight-Bright 2021 Performance

<p><strong>Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP methodology, implying 18.0xPE’21E.</strong></p><div>• We expect 4Q20 earnings to grow YoY on the back of higher availability factor of Hongsa Power plant, while remain flat QoQ due to lower seasonal contribution from IPP power plants and higher SG&amp;A expenses.</div><div></div><div>• Maintain positive view towards the 2021-25 earnings backed by COD of 1.6GWe projects in pipeline, representing a 24% expansion by 2025.</div><div></div><div>• The stock is quite attractive given its cheap valuation of 14.4x PE’21 and the current price provides an attractive dividend yield of 4.0-to-4.9% in 2020-22.</div>

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP methodology, implying 18.0xPE’21E.• We expect 4Q20 earnings to grow YoY on the back of higher availability factor of Hongsa Power plant, while remain flat QoQ due to lower seasonal contribution from IPP power plants and higher SG&amp;A expenses.• Maintain positive view towards the 2021-25 earnings backed by COD of 1.6GWe projects in pipeline, representing a 24% expansion by 2025.• The stock is quite attractive given its cheap valuation of 14.4x PE’21 and the current price provides an attractive dividend yield of 4.0-to-4.9% in 2020-22.

RATCH: Growth Intact from Steady Capacity Expansion

Equity Capital Markets

<p><strong>RATCH reported 3Q20 net profit of Bt1.72bn (+26.2% YoY, +60.3% QoQ), the highest since past 5 quarters.</strong></p><div>• Excluding FX and extraordinary items the core profit was Bt1.58bn (+3.7% YoY, +197% QoQ),</div><div></div><div>• The strong QoQ earnings growth was due to increase in power generation and sales from RG and HPC power plants, which had maintenance shutdown in 2Q20</div><div></div><div>• Expect 4Q20 earnings to soften QoQ because of lower seasonal contribution from IPP power plants and higher SG&amp;A expenses.</div><div></div><div>• We maintain our positive view towards the 2021-22E earnings backed by full year earnings recognition from 797MWe projects commencing operation in 2020-21 period.</div><div></div><div>• We believe the stock weakness in 4Q20 will be an opportunity to accumulate</div><p></p><p><strong>We maintain the BUY recommendation, while revise down the target price to Bt70.5 (from previous Bt74.5) on the back of 12 to 19% cut in 2020-22 earnings forecast. Our valuation is based on SOTP methodology, implying 18xPE’21E.</strong></p>

RATCH reported 3Q20 net profit of Bt1.72bn (+26.2% YoY, +60.3% QoQ), the highest since past 5 quarters.• Excluding FX and extraordinary items the core profit was Bt1.58bn (+3.7% YoY, +197% QoQ),• The strong QoQ earnings growth was due to increase in power generation and sales from RG and HPC power plants, which had maintenance shutdown in 2Q20• Expect 4Q20 earnings to soften QoQ because of lower seasonal contribution from IPP power plants and higher SG&amp;A expenses.• We maintain our positive view towards the 2021-22E earnings backed by full year earnings recognition from 797MWe projects commencing operation in 2020-21 period.• We believe the stock weakness in 4Q20 will be an opportunity to accumulateWe maintain the BUY recommendation, while revise down the target price to Bt70.5 (from previous Bt74.5) on the back of 12 to 19% cut in 2020-22 earnings forecast. Our valuation is based on SOTP methodology, implying 18xPE’21E.

RATCH: 3Q20 Earnings Grew from Better Overseas Performance

Thailand

Ratch Group PCL operates as a power producer company. The Company focuses on investment fossil fuel power generation and renewable projects, as well as businesses adjacent to electricity generation and energy. Ratchaburi Group serves customers in Asia.

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Ratch Group PCL (RATCH TB)

RATCH: Cheap Valuation and Attractive Dividend Yield

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP...

Pi Securities PCL, Thailand

RATCH: Steady Growth Outlook with Decent Dividend Yield

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5, derived using SOTP...

Pi Securities PCL, Thailand

Thailand Power Sector: Overweight-Bright 2021 Performance

Power Sector: Overweight-Bright 2021 sector performance. BCPG, GUNKUL, GULF top pick growth stocks. EGCO, RATCH top pick value stocks

Pi Securities PCL, Thailand

RATCH: Growth Intact from Steady Capacity Expansion

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt70.5 derived using SOTP...

Pi Securities PCL, Thailand

RATCH: 3Q20 Earnings Grew from Better Overseas Performance

We maintain the BUY recommendation, while revise down the target price to Bt70.5 (from previous Bt74.5) on the back of 12 to 19% cut in 2020-22...

Pi Securities PCL, Thailand

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