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 maintain our HOLD rating with new 2021E target price of Bt41.50, derived from 21.3x PE’21E, based on 1.0x PEG. SCGP announced 2020 financial result and held analyst conference call yesterday.</strong></p><div>• SCGP recuring profit in 4Q20 was Bt1.7bn (+50%YoY, +23%QoQ), spurred by strong GPM and expenses control.</div><div></div><div>• 2020 net profit was Bt6.5b (+23%YoY), driven by additional revenue from Fajar, newly M&amp;A business in Indonesia, and margin expansion.</div><div></div><div>• SCGP targeted double-digit revenue growth in 2021E, supported by aggressive CAPEX budget of more than Bt20bn (+100%YoY), for capacity expansion and M&amp;P.</div><div></div><div>• The company expected packaging demand to recover slowly through out 2021.</div><p></p><p><strong>We like the company’s commanding market position in Southeast Asia and its growth potential from M&amp;As. However, it is trading at quite a demanding valuation.</strong></p>

We maintain our HOLD rating with new 2021E target price of Bt41.50, derived from 21.3x PE’21E, based on 1.0x PEG. SCGP announced 2020 financial result and held analyst conference call yesterday.• SCGP recuring profit in 4Q20 was Bt1.7bn (+50%YoY, +23%QoQ), spurred by strong GPM and expenses control.• 2020 net profit was Bt6.5b (+23%YoY), driven by additional revenue from Fajar, newly M&amp;A business in Indonesia, and margin expansion.• SCGP targeted double-digit revenue growth in 2021E, supported by aggressive CAPEX budget of more than Bt20bn (+100%YoY), for capacity expansion and M&amp;P.• The company expected packaging demand to recover slowly through out 2021.We like the company’s commanding market position in Southeast Asia and its growth potential from M&amp;As. However, it is trading at quite a demanding valuation.

SCGP: On-Going Expansion Through Merger & Partnership

<p>We initiate coverage of SCGP with a HOLD rating and a 2021 target price of Bt39.00, derived from 21.3x PE’21E, based on 1.6x PEG. We like the company’s commanding market position in Southeast Asia and its growth potential from M&amp;As. However, it is trading at quite a demanding valuation.</p><p>The story:</p><div>• Leader in SEA packaging industry</div><div></div><div>• Established footprint in markets with high growth potential</div><div></div><div>• 25-84% EPS 2021E upside if it can leverage its debt ratio to 1.0-1.5x</div><div></div><div>• Trading at quite a premium to its Asian packaging peers and its parent company</div><div></div><div>• Expect earnings to grow at 13% CAGR in 2021-22E</div><div>
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</div><p>Risks:  Foreign exchange rate fluctuation</p><p>            Raw material price fluctuation</p><p>            Decline in printing industry</p>

We initiate coverage of SCGP with a HOLD rating and a 2021 target price of Bt39.00, derived from 21.3x PE’21E, based on 1.6x PEG. We like the company’s commanding market position in Southeast Asia and its growth potential from M&amp;As. However, it is trading at quite a demanding valuation.The story:• Leader in SEA packaging industry• Established footprint in markets with high growth potential• 25-84% EPS 2021E upside if it can leverage its debt ratio to 1.0-1.5x• Trading at quite a premium to its Asian packaging peers and its parent company• Expect earnings to grow at 13% CAGR in 2021-22E
 
Risks:  Foreign exchange rate fluctuation            Raw material price fluctuation            Decline in printing industry

Leading Market Position Reflected in Valuation

Thailand

SCG Packaging Public Company Limited provides packaging services and solutions. The Company offers fiber-based packaging, performance and polymer packaging, and food service products, as well as designing and printing services. SCG Packaging serves customers worldwide.

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SCG Packaging (SCGP TB)

SCGP: On-Going Expansion Through Merger & Partnership

We maintain our HOLD rating with new 2021E target price of Bt41.50, derived from 21.3x PE’21E, based on 1.0x PEG. SCGP announced 2020 financial...

Pi Securities PCL, Thailand

Leading Market Position Reflected in Valuation

We initiate coverage of SCGP with a HOLD rating and a 2021 target price of Bt39.00, derived from 21.3x PE’21E, based on 1.6x PEG. We like the...

Pi Securities PCL, Thailand

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