Waraporn Wiboonkanarak

Krungthai XSpring

Equity Bottom-Up

<div>Company Update</div>
<h2>Somboon Advance Technology Plc. (SAT)</h2>

<div>Automotive</div>

<h3>Healthier earnings outlook</h3>
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<p>We reiterate a Hold rating with the new target price of Bt20.90 (from Bt17.50 previously), based on 12x 2021E PER, thanks to its stronger earnings growth prospects. SAT’s growth will continue to outpace the auto industry on the back of new orders and the strong pickup in the sales of tractor parts. The global chip shortage and rising steel prices have not yet had a material adverse impact on its 1H21E…</p>
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<p>Earnings Review</p>
<h2>Somboon Advance Technology Plc. (SAT)</h2>
<p>Automotive</p>
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<h3>Margin recovery behind earnings surprise in 4Q20</h3>
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<p>SAT reported an earnings surprise in 4Q20 thanks to the strong bounce back of the GPM. The growth momentum should be sustained in 1Q21E, tracking current clients’ rolling orders. We keep our Hold rating on the back of its earnings visibility, expecting high double-digit growth in 2021E, and a nearly 6% yield.</p>
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<p><strong>4Q20 earnings beat expectation</strong><br>SAT posted a net profit of…</p>
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<p>Company Update</p>
<h2>Somboon Advance Technology Plc. (SAT)</h2>
<p>Automotive</p>
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<h3><strong>Tracking industry recovery</strong></h3>
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<p><br>SAT will track the stronger recovery momentum of the auto industry, prompting us to revise up its earnings estimates. This lifts our 2021E target price to Bt17.50 (from Bt15 previously), pegged with unchanged PER of 11x (LT average +0.25 S.D.). Its earnings visibility with growth more than doubling in 2021E and an attractive yield of nearly 6% should justify the share price returning to its book…</p>
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<p>Earnings Review</p>
<h2>Somboon Advance Technology Plc. (SAT)</h2>
<p>Automotive</p>
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<h3>3Q20 back in the black; strong growth momentum in 4Q20E</h3>
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<p>SAT’s earnings reversed to make a profit in 3Q20 thanks to the resumption of auto production. Strong recovery momentum should be seen in 4Q20E. However, we revise down the 2020E forecast on the back of the weaker-than-expected GPM improvement in 9M20. We keep our Hold rating unchanged, with the new 2021E target price of Bt15, pegged with PER of 11x (LT average +0.25 S.D.).</p>
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<p>Company Update</p>
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<h2>Somboon Advance Technology Plc. (SAT)</h2>
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<p>Automotive</p>
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<h3>On track recovery in 2H20E</h3>
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<p>SAT’s path of earnings recovery remains on track. We thus keep our earnings forecast. Though the share price has recently rallied over upbeat expectation of possible government incentives to boost auto output, our Hold rating is kept thanks to 6% dividend yield over the next 12 months.</p>
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<p><strong>Recovery seen in 2H20E<br></strong>SAT reiterated that Thailand auto production this year would reach 1.3mn units…</p>
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Thailand

Somboon Advance Technology PCL manufactures and sells automotive parts for sale to automobile manufacturers. The Company's products include axle shafts, leaf springs, disk and drum brakes, manifold exhaust, fly wheels, stabilizer bars, and coil springs.

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Dividend (Yield)	0.00