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

We initiate coverage of BJC with a BUY rating and a target price of Bt61, derived from a DCF methodology (WACC 7.2% and terminal growth of 1%), implying 30xPE’20E, or a 28% premium to the Thai Consumer Staples Sector. 
The story:
<ul>
<li>Securing market position via hypermarket expansion</li>
<li>Aggressive opening of Mini BigCs will support long-term sustainable growth</li>
<li>Government policy will be a key catalyst to boost SSSG</li>
<li>Expect packaging earnings to recover in 2H19</li>
</ul>
Risks:
<ul>
<li>Economic slowdown</li>
<li>FX &amp; raw material price fluctuation</li>
<li>Household debt to GDP remains high at roughly 80%, suggesting low purchasing power.</li>
</ul>
Background: Berli Jucker Public Company Limited (BJC) was founded in 1882 by Albert Jucker and Henry Sigg. The company has four core businesses including packaging, consumer, healthcare and technical and modern retail supply chain. BJC provides a wide range of products under its own brands and customers’ bands (OEM) for the domestic and international markets. In 2001, Thai Charoen Corporation (TCC), under the leadership of Charoen and Wanna Sirivadhanabhakdi, became the majority shareholders of the company. In 2016 BJC acquired BigC Supercenter, which is the second-largest hypermarket operator in Thailand.

We initiate coverage of BJC with a BUY rating and a target price of Bt61, derived from a DCF methodology (WACC 7.2% and terminal growth of 1%), implying 30xPE’20E, or a 28% premium to the Thai Consumer Staples Sector. 
The story:

Securing market position via hypermarket expansion
Aggressive opening of Mini BigCs will support long-term sustainable growth
Government policy will be a key catalyst to boost SSSG
Expect packaging earnings to recover in 2H19

Risks:

Economic slowdown
FX &amp; raw material price fluctuation
Household debt to GDP remains high at roughly 80%, suggesting low purchasing power.

Background: Berli Jucker Public Company Limited (BJC) was founded in 1882 by Albert Jucker and Henry Sigg. The company has four core businesses including packaging, consumer, healthcare and technical and modern retail supply chain. BJC provides a wide range of products under its own brands and customers’ bands (OEM) for the domestic and international markets. In 2001, Thai Charoen Corporation (TCC), under the leadership of Charoen and Wanna Sirivadhanabhakdi, became the majority shareholders of the company. In 2016 BJC acquired BigC Supercenter, which is the second-largest hypermarket operator in Thailand.

BJC: Solid Supply Chain in the Retail Business

Thailand

CP Axtra Public Company Limited operates a retail discount store chain. The Company sells food and consumer products to its registered customers including wholesalers, retailers, small businesses, caterers, and private individuals who hold its member cards. CP Axtra serves customers in Thailand.

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CP Axtra (CPAXT TB)

BJC: Solid Supply Chain in the Retail Business

We initiate coverage of BJC with a BUY rating and a target price of Bt61, derived from a DCF methodology (WACC 7.2% and terminal growth of 1%),...

Pi Securities PCL, Thailand

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