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 conservatively revise up total land presales in 2021 to 860 rai (+69%YoY) from our previous forecast at 780 rai as we expect business travel ban to ease in 4Q21 along with bouncing investor confident after impacted by 3rd wave of COVID-19 domestically.</strong></p><div>• Positive outlook for the group’s earnings recovery in 2021</div><div></div><div>• We anticipate earnings from power business to already bottomed out in 1Q21</div><div></div><div>• We expect 2Q21 core profit to grow both QoQ and YoY driven by increasing land transfer unit, improving revenue and equity income from utility business, high base demand in rental logistic business benefiting from COVID-19 ( contributed 1/4 of earnings in 1Q21.)</div><div></div><div>• Revising up 2021E net profit by 10% to account higher-than-expected revenue from asset monetarization</div><div></div><div>We maintain our BUY rating with a new target price after EPS upward revision  at Bt4.0 (Previous TP Bt3.80) derived from 21xPE’21E (five-year average).</div>

We conservatively revise up total land presales in 2021 to 860 rai (+69%YoY) from our previous forecast at 780 rai as we expect business travel ban to ease in 4Q21 along with bouncing investor confident after impacted by 3rd wave of COVID-19 domestically.• Positive outlook for the group’s earnings recovery in 2021• We anticipate earnings from power business to already bottomed out in 1Q21• We expect 2Q21 core profit to grow both QoQ and YoY driven by increasing land transfer unit, improving revenue and equity income from utility business, high base demand in rental logistic business benefiting from COVID-19 ( contributed 1/4 of earnings in 1Q21.)• Revising up 2021E net profit by 10% to account higher-than-expected revenue from asset monetarizationWe maintain our BUY rating with a new target price after EPS upward revision  at Bt4.0 (Previous TP Bt3.80) derived from 21xPE’21E (five-year average).

WHA: Positive Outlook for the Group’s Earnings Recovery in 2021

<p><strong>The management set land presales target in 2021 at 1,030 rai, which including 725 in Thailand and 305 rai in Vietnam, up from 218 rai and 292 rai respectively. The domestic land presales target is quite challenging. However, we believe Vietnam presales land target is viable given solid demand from China and much cheaper land price compared with Thailand.</strong></p><div>• Slightly positive tone from analyst meeting</div><div>• We expect 1Q21 core profit excluding gain from asset divestment in 4Q20 to drop both QoQ and YoY, pressured by lower land transfer unit and maintenance shutdown for Gheco-1, two SPPs which will trimmed down equity income from utility business. </div><p></p><p><strong>We maintain our BUY rating with a new target price at Bt3.80 (Previous TP Bt4.20) derived from 21xPE’21E (five-year average). Target price reduction factor in 17% downward earnings revision in 2021E.</strong></p>

The management set land presales target in 2021 at 1,030 rai, which including 725 in Thailand and 305 rai in Vietnam, up from 218 rai and 292 rai respectively. The domestic land presales target is quite challenging. However, we believe Vietnam presales land target is viable given solid demand from China and much cheaper land price compared with Thailand.• Slightly positive tone from analyst meeting• We expect 1Q21 core profit excluding gain from asset divestment in 4Q20 to drop both QoQ and YoY, pressured by lower land transfer unit and maintenance shutdown for Gheco-1, two SPPs which will trimmed down equity income from utility business. We maintain our BUY rating with a new target price at Bt3.80 (Previous TP Bt4.20) derived from 21xPE’21E (five-year average). Target price reduction factor in 17% downward earnings revision in 2021E.

WHA: Land Presales Target Seems Quite Challenging

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Japan Post, JD.com, Toyota, NTT, Jardines, Indices/Exec. Orders, Tianneng

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Delta Electronics Thailand  / Event-Driven

<p>Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the SET50 index with the changes taking effect after the close of trading on 30 December.</p><p><a href="https://www.smartkarma.com/entities/bangkok-commercial-asset-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:28442:1" rel="noopener">Bangkok Commercial Asset Management (BAM TB)</a>, <a href="https://www.smartkarma.com/entities/com7-pcl" target="_blank" data-smartkarma-citation="entities:27411:1" rel="noopener">Com7 PCL (COM7 TB)</a> and <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> have been included in the index, replacing <a href="https://www.smartkarma.com/entities/banpu-power-pcl" target="_blank" data-smartkarma-citation="entities:23631:1" rel="noopener">Banpu Power PCL (BPP TB)</a>, <a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a> and <a href="https://www.smartkarma.com/entities/wha-corp-pcl" target="_blank" data-smartkarma-citation="entities:104:1" rel="noopener">WHA Corp Pcl (WHA TB)</a>. This was our base case scenario, though DELTA had the lowest probability of index inclusion.</p><p>Terrible timing! <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> has gained 543.72% since it was deleted from the SET50 index at the June review, while <a href="https://www.smartkarma.com/entities/banpu-power-pcl" target="_blank" data-smartkarma-citation="entities:23631:1" rel="noopener">Banpu Power PCL (BPP TB)</a> has gained just 2.99% since it was included in the index at the June review. Not implementing this change in June would have led to the SET50 index return being over 3.5% higher than its actual return.</p><p>One-way turnover for the rebalance is 4.92%. The impact of the changes does not appear like a lot, but the active funds trading ahead of implementation date could cause the stocks to move around a lot compared to their peers.</p><p><em>This Insight is labelled Bullish as we expect DELTA to outperform its peers post the inclusion in the SET50 index. The stock could move lower post implementation date due to its higher valuations.</em></p>

Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the SET50 index with the changes taking effect after the close of trading on 30 December.Bangkok Commercial Asset Management (BAM TB), Com7 PCL (COM7 TB) and Delta Electronics Thai (DELTA TB) have been included in the index, replacing Banpu Power PCL (BPP TB), IRPC PCL (IRPC TB) and WHA Corp Pcl (WHA TB). This was our base case scenario, though DELTA had the lowest probability of index inclusion.Terrible timing! Delta Electronics Thai (DELTA TB) has gained 543.72% since it was deleted from the SET50 index at the June review, while Banpu Power PCL (BPP TB) has gained just 2.99% since it was included in the index at the June review. Not implementing this change in June would have led to the SET50 index return being over 3.5% higher than its actual return.One-way turnover for the rebalance is 4.92%. The impact of the changes does not appear like a lot, but the active funds trading ahead of implementation date could cause the stocks to move around a lot compared to their peers.This Insight is labelled Bullish as we expect DELTA to outperform its peers post the inclusion in the SET50 index. The stock could move lower post implementation date due to its higher valuations.

Last Week in Event SPACE: Tokyo Dome, LG Corp, Kerry Express, Sogou, Adways

Thailand

WHA Corp PCL is a built-to-suit distribution center and factory developer in Thailand.

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WHA Corp Pcl (WHA TB)

WHA: Positive Outlook for the Group’s Earnings Recovery in 2021

We conservatively revise up total land presales in 2021 to 860 rai (+69%YoY) from our previous forecast at 780 rai as we expect business travel ban...

Pi Securities PCL, Thailand

WHA: Land Presales Target Seems Quite Challenging

The management set land presales target in 2021 at 1,030 rai, which including 725 in Thailand and 305 rai in Vietnam, up from 218 rai and 292 rai...

Pi Securities PCL, Thailand

Last Week in Event SPACE: Japan Post, JD.com, Toyota, NTT, Jardines, Indices/Exec. Orders, Tianneng

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

SET50 Index Rebalance: DELTA to Buy

BAM, COM7 and DELTA have been added to the SET50 index replacing BPP, IRPC and WHA with the changes effective after the close on 30 Dec. With 11...

Brian Freitas

Last Week in Event SPACE: Tokyo Dome, LG Corp, Kerry Express, Sogou, Adways

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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