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

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Thai Equity - Bottom-up - Equities

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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 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

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 Bt74.5 derived using SOTP methodology, implying 17xPE’20E or 0.75x relative PE to the Thai utility sector.</strong></p><ul>
<li>Expect 3Q20 earnings to improve both YoY and QoQ backed by 1) higher availability factor of Ratchaburi (RG) and Hongsa power plant and 2) seasonal high earnings contribution from 346MWe hydro power plants in Lao PDR.</li>
<li>Maintain positive view towards the 2020-25 earnings backed by COD of 2.0GWe projects in pipeline, representing 20% expansion by 2025.</li>
<li>Announced interim dividend payment of Bt1.15 per share, implying a yield of 2% based on current share price. XD is on 3rd September.</li>
</ul>

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt74.5 derived using SOTP methodology, implying 17xPE’20E or 0.75x relative PE to the Thai utility sector.
Expect 3Q20 earnings to improve both YoY and QoQ backed by 1) higher availability factor of Ratchaburi (RG) and Hongsa power plant and 2) seasonal high earnings contribution from 346MWe hydro power plants in Lao PDR.
Maintain positive view towards the 2020-25 earnings backed by COD of 2.0GWe projects in pipeline, representing 20% expansion by 2025.
Announced interim dividend payment of Bt1.15 per share, implying a yield of 2% based on current share price. XD is on 3rd September.


RATCH: 3Q20 Earnings to Improve from Overseas Performance

<p><strong>Last week analyst meeting came out in a positive tone. 2Q20 earnings outlook looks solid from IPP seasonality and profit recognition from 290MWe capacity expansion in 2019.</strong></p><ul>
<li>Expect 2Q20 earnings to improve both YoY and QoQ, backed by higher seasonal contribution from IPPs in Thailand , Hongsa and hydro projects in Lao PDR.</li>
<li>Hin kong power plant (HKH) received LNG shipper license in the amount of 1.4m tons/year which will be used as fuel in 1,400 MW IPP power plant having SCOD in 2024-25E. </li>
<li>Maintain positive view towards the 2020-25 earnings backed by COD of 2.0GWe projects in pipeline, representing 30% expansion by 2025.</li>
</ul><p><strong>We maintain the BUY recommendation based on a target price of Bt74.5 derived using SOTP methodology, implying 16.6xPE’20E or 0.71x relative PE to Thai utility sector.</strong></p>

Last week analyst meeting came out in a positive tone. 2Q20 earnings outlook looks solid from IPP seasonality and profit recognition from 290MWe capacity expansion in 2019.
Expect 2Q20 earnings to improve both YoY and QoQ, backed by higher seasonal contribution from IPPs in Thailand , Hongsa and hydro projects in Lao PDR.
Hin kong power plant (HKH) received LNG shipper license in the amount of 1.4m tons/year which will be used as fuel in 1,400 MW IPP power plant having SCOD in 2024-25E. 
Maintain positive view towards the 2020-25 earnings backed by COD of 2.0GWe projects in pipeline, representing 30% expansion by 2025.
We maintain the BUY recommendation based on a target price of Bt74.5 derived using SOTP methodology, implying 16.6xPE’20E or 0.71x relative PE to Thai utility sector.

RATCH: 2Q20 Earnings to Grow from IPP Seasonality

<p>Yesterday analyst meeting came out in a neutral tone. Expect 2020E earnings to remain healthy backed by profit contribution from newly COD projects in 2019.</p><ul>
<li>Expect 1Q20 earnings to improve both YoY and QoQ, given the profit recognition from 290MW capacity expansion in 2019. </li>
<li>Positive Long term (2020-21) earnings outlook backed by COD 782 MWe projects in pipeline, representing 11% expansion by 2022.</li>
<li>Estimate 7% CAGR EPS growth in 2020-22E.</li>
<li>The share has fallen 17% since early 2020 due to the negative sentiments of expected economic slowdown from COVID-19 spread. We believe this should be a short-term impact and recommend to accumulate the stock for 12-month period.</li>
</ul><p>We maintain the BUY rating with a target price of Bt74.5 is based on sum-of-the-parts (SOTP) methodology, implying 16.6xPE’20E or 0.71x relative PE to Thai utility sector.</p>

Yesterday analyst meeting came out in a neutral tone. Expect 2020E earnings to remain healthy backed by profit contribution from newly COD projects in 2019.
Expect 1Q20 earnings to improve both YoY and QoQ, given the profit recognition from 290MW capacity expansion in 2019. 
Positive Long term (2020-21) earnings outlook backed by COD 782 MWe projects in pipeline, representing 11% expansion by 2022.
Estimate 7% CAGR EPS growth in 2020-22E.
The share has fallen 17% since early 2020 due to the negative sentiments of expected economic slowdown from COVID-19 spread. We believe this should be a short-term impact and recommend to accumulate the stock for 12-month period.
We maintain the BUY rating with a target price of Bt74.5 is based on sum-of-the-parts (SOTP) methodology, implying 16.6xPE’20E or 0.71x relative PE to Thai utility sector.

RATCH: Stern and Steady Player in Thai Utility Sector

<p>We downgrade RATCH to HOLD rating to reflect the earnings revision. We also cut our target price by 9% to Bt74.5 derived from sum-of-the-parts (SOTP) methodology, implying 16.5xPE’20E or 0.74x relative PE to Thai utility sector.</p>
<ul>
<li>Trimming the earnings forecast for FY2019-21 to factor in the lower than expected sales revenue growth from the aged IPP power plants, and equity income form associates.</li>
<li>Expect 4Q19 earnings to recover YoY, given the profit recognition from 228 MW capacity (2H18-1H19). and  decline QoQ due to seasonality factor. </li>
<li>Maintain positive view towards the 2020-21 earnings backed by COD 782 MWe projects in pipeline, representing 11% expansion by 2022.</li>
</ul>
<p>It was a good call to initiate RATCH in 3Q19, as the share price rallied up 12% touching our previous target price of Bt81.5 in 4Q19. However the price slashed later due to lower than expected earnings growth and negative sentiments from sale of 49% stake in 1,400 MW Hin Kong to GULF.</p>

We downgrade RATCH to HOLD rating to reflect the earnings revision. We also cut our target price by 9% to Bt74.5 derived from sum-of-the-parts (SOTP) methodology, implying 16.5xPE’20E or 0.74x relative PE to Thai utility sector.

Trimming the earnings forecast for FY2019-21 to factor in the lower than expected sales revenue growth from the aged IPP power plants, and equity income form associates.
Expect 4Q19 earnings to recover YoY, given the profit recognition from 228 MW capacity (2H18-1H19). and  decline QoQ due to seasonality factor. 
Maintain positive view towards the 2020-21 earnings backed by COD 782 MWe projects in pipeline, representing 11% expansion by 2022.

It was a good call to initiate RATCH in 3Q19, as the share price rallied up 12% touching our previous target price of Bt81.5 in 4Q19. However the price slashed later due to lower than expected earnings growth and negative sentiments from sale of 49% stake in 1,400 MW Hin Kong to GULF.

RATCH: Slow but Steady 2020-21 Earnings Outlook

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: 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

RATCH: 3Q20 Earnings to Improve from Overseas Performance

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt74.5 derived using SOTP...

Pi Securities PCL, Thailand

RATCH: 2Q20 Earnings to Grow from IPP Seasonality

Last week analyst meeting came out in a positive tone. 2Q20 earnings outlook looks solid from IPP seasonality and profit recognition from 290MWe...

Pi Securities PCL, Thailand

RATCH: Stern and Steady Player in Thai Utility Sector

Yesterday analyst meeting came out in a neutral tone. Expect 2020E earnings to remain healthy backed by profit contribution from newly COD projects...

Pi Securities PCL, Thailand

RATCH: Slow but Steady 2020-21 Earnings Outlook

We downgrade RATCH to HOLD rating to reflect the earnings revision. We also cut our target price by 9% to Bt74.5 derived from sum-of-the-parts...

Pi Securities PCL, Thailand

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