Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>We maintain our Buy rating on SVI, while upgrading our tactical view to very limited downside (from neutral), based on the valuation metrics.</li><li>The 1Q24 core earnings were slightly above our expectation, mainly due to a solid gross margin.</li><li>Sales growth weakened further YoY and QoQ, especially in its key segments, due to unfavorable global economic conditions.</li></ul>

We maintain our Buy rating on SVI, while upgrading our tactical view to very limited downside (from neutral), based on the valuation metrics.The 1Q24 core earnings were slightly above our expectation, mainly due to a solid gross margin.Sales growth weakened further YoY and QoQ, especially in its key segments, due to unfavorable global economic conditions.

SVI - Earnings Growth in 1Q24 Carried by Higher Gross Margin

<ul><li>We initiate our coverage on SVI with a BUY rating and a FY2024 fair value of Bt8.00, based on a required rate of return of 6.78%.</li><li>We believe SVI’s FY2024 core earnings will recover to Bt1.2bn (+24% YoY), driven by a recovery in demand from existing customers, as well as new customers in the automotive space.</li><li>In the mid-to-long run, SVI’s core earnings should grow by 17%CAGR between 2023-2026E, driven mainly by the growth of existing customers and capturing new customers looking to decouple itself from China.</li></ul>

We initiate our coverage on SVI with a BUY rating and a FY2024 fair value of Bt8.00, based on a required rate of return of 6.78%.We believe SVI’s FY2024 core earnings will recover to Bt1.2bn (+24% YoY), driven by a recovery in demand from existing customers, as well as new customers in the automotive space.In the mid-to-long run, SVI’s core earnings should grow by 17%CAGR between 2023-2026E, driven mainly by the growth of existing customers and capturing new customers looking to decouple itself from China.

Svi -New Customers and Demand Recovery in 2023-26E

Thailand

SVI Public Company Limited provides printed circuit board contract manufacturing services.  Most of its customers are original equipment manufacturers of computer peripheral products, telecommunication equipment, and industrial equipment and instruments.

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