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.

Thematic (Sector/Industry)

<ul><li>The MPC's softer outlook for 2024E GDP growth, now projected within the range of 2.5-3.0%, will provide more leeway for the committee to maintain the policy interest rate above inflation, thereby ensuring a positive real interest rate.</li><li>Considering i) the current real interest rate at 3.6% (Thai policy rate at 2.5%, CPI at -1.1% YoY), the highest in 32 months and higher than the US real interest rate at 2.1% (US policy rate at 5.5% and CPI at +3.4% YoY); ii) the uncertain outlook for the Digital Wallet scheme, which may prevent Thai GDP growth in 2024E from reaching its full potential level; and iii) the divided vote (five to two) in the most recent meeting, there is a possibility that the MPC may reduce the policy interest rate in the future to stimulate the economy and bring economic growth back to its potential level.</li><li>This scenario would be positive for high dividend plays (BCP, PTT, TOP, WHAUP, SABINA and ADVANC) and the finance sector (SAWAD, MTC and TIDLOR) (Figure 9).</li></ul>

The MPC's softer outlook for 2024E GDP growth, now projected within the range of 2.5-3.0%, will provide more leeway for the committee to maintain the policy interest rate above inflation, thereby ensuring a positive real interest rate.Considering i) the current real interest rate at 3.6% (Thai policy rate at 2.5%, CPI at -1.1% YoY), the highest in 32 months and higher than the US real interest rate at 2.1% (US policy rate at 5.5% and CPI at +3.4% YoY); ii) the uncertain outlook for the Digital Wallet scheme, which may prevent Thai GDP growth in 2024E from reaching its full potential level; and iii) the divided vote (five to two) in the most recent meeting, there is a possibility that the MPC may reduce the policy interest rate in the future to stimulate the economy and bring economic growth back to its potential level.This scenario would be positive for high dividend plays (BCP, PTT, TOP, WHAUP, SABINA and ADVANC) and the finance sector (SAWAD, MTC and TIDLOR) (Figure 9).

Economic Update: MPC Holds Policy Interest Rate at 2.5%

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

WHA Utilities And Power / Equity Bottom-Up

From analyst meeting yesterday, we came out with a positive tone for both utility and power business. We maintain our BUY rating with the target price of Bt8.20 based on DCF (6.7%WACC and 1%terminal growth), implying 13.5x PE’20E.Key takeaway:<ul>
<li>Management expects its utility sales volume, including Duong River Surface Water Plant, to reach 120 m3 in 2019 (from 105 m3 in 2018) and 150 m3 in 2020.</li>
<li>Power business is expected to grow both YoY and QoQ after realizing dividend payment from Glow IPP and COD of a 2.9 MWe waste-to-energy plant (CCE).</li>
<li>Transaction of Duong River Project is completed. Its utilization rate is expected to ramp up to 80% by the end of this year.</li>
</ul>

From analyst meeting yesterday, we came out with a positive tone for both utility and power business. We maintain our BUY rating with the target price of Bt8.20 based on DCF (6.7%WACC and 1%terminal growth), implying 13.5x PE’20E.Key takeaway:
Management expects its utility sales volume, including Duong River Surface Water Plant, to reach 120 m3 in 2019 (from 105 m3 in 2018) and 150 m3 in 2020.
Power business is expected to grow both YoY and QoQ after realizing dividend payment from Glow IPP and COD of a 2.9 MWe waste-to-energy plant (CCE).
Transaction of Duong River Project is completed. Its utilization rate is expected to ramp up to 80% by the end of this year.


WHAUP: Duong River Projects, a Key Driver in 2020E

We initiate coverage of WHAUP with a BUY rating and a 2020E target price of Bt8.20, derived from a discounted cash flow valuation (WACC of 6.7% and terminal growth of 1.0%) and implying 13.5x PE’20E. 
The story:
<ul>
<li>Secured revenue stream from power business</li>
<li>Continuing growth alongside IE expansion</li>
<li>Expect 0.8-1 Bt/share upside from Duong River Surface Water Plant</li>
<li>Wide open opportunity in Vietnam utility sector</li>
</ul>
Risks: 
<ul>
<li>Raw material shortages</li>
<li>Exchange rate fluctuation</li>
<li>Reliance on WHA ID</li>
</ul>

We initiate coverage of WHAUP with a BUY rating and a 2020E target price of Bt8.20, derived from a discounted cash flow valuation (WACC of 6.7% and terminal growth of 1.0%) and implying 13.5x PE’20E. 
The story:

Secured revenue stream from power business
Continuing growth alongside IE expansion
Expect 0.8-1 Bt/share upside from Duong River Surface Water Plant
Wide open opportunity in Vietnam utility sector

Risks: 

Raw material shortages
Exchange rate fluctuation
Reliance on WHA ID


WHAUP: Stepping Forward to Be a Regional Utility Player

Thailand

WHA Utilities and Power Public Company Limited offers utility services. The Company provides raw water procurement, wastewater treatment, power generation and distribution, industrial water distribution, waste management, and other services. WHA Utilities and Power serves customers in Thailand.

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WHA Utilities And Power (WHAUP TB)

Economic Update: MPC Holds Policy Interest Rate at 2.5%

This scenario would be positive for high dividend plays (BCP, PTT, TOP, WHAUP, SABINA and ADVANC) and the finance sector (SAWAD, MTC and TIDLOR)

Krungthai XSpring

WHAUP: Duong River Projects, a Key Driver in 2020E

From analyst meeting yesterday, we came out with a positive tone for both utility and power business. We maintain our BUY rating with the target...

Pi Securities PCL, Thailand

WHAUP: Stepping Forward to Be a Regional Utility Player

We initiate coverage of WHAUP with a BUY rating and a 2020E target price of Bt8.20, derived from a discounted cash flow valuation (WACC of 6.7% and...

Pi Securities PCL, Thailand

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