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

<ul>
<li>We maintain HOLD recommendation for WICE with a new target price of Bt12.0. (Previous TP: Bt12.60) after derated PE multiple to 14.5xPE’23E (-0.5S.D. five-year average), as we expect earnings </li>
<li>3Q22 profit came out below market expectation at Bt130m WICE report 3Q22 net profit at Bt130m(-20%YoY and -24%QoQ),the lowest level in the past five quarters. YoY and QoQ drops pressured</li>
<li>However, gross profit margin in 3Q22 reached 16-quarter high due to benefit from cross-selling amongst all businesses and effective cost management.</li>
</ul>


We maintain HOLD recommendation for WICE with a new target price of Bt12.0. (Previous TP: Bt12.60) after derated PE multiple to 14.5xPE’23E (-0.5S.D. five-year average), as we expect earnings 
3Q22 profit came out below market expectation at Bt130m WICE report 3Q22 net profit at Bt130m(-20%YoY and -24%QoQ),the lowest level in the past five quarters. YoY and QoQ drops pressured
However, gross profit margin in 3Q22 reached 16-quarter high due to benefit from cross-selling amongst all businesses and effective cost management.


WICE : 3Q22 Net Profit Fell to Five-Quarter Low

<ul>
<li>We downgrade WICE to HOLD with a new target price of Bt12.60. (Previous TP: Bt19.30) after revised earnings down by 8-15% in 2022-23E. We anticipate impact from a continued drop</li>
<li>2Q22 profit beat market expectation at Bt170m WICE report 2Q22 net profit at Bt170m (+52%YoY and +8%QoQ)</li>
<li>YoY growth supported by 20% expansion to Bt2.0bn, solely driven by sea freight (+72%YoY to Bt1.2bn while contributes 61% of total revenue in 2Q22) on the back of high freight </li>
</ul>


We downgrade WICE to HOLD with a new target price of Bt12.60. (Previous TP: Bt19.30) after revised earnings down by 8-15% in 2022-23E. We anticipate impact from a continued drop
2Q22 profit beat market expectation at Bt170m WICE report 2Q22 net profit at Bt170m (+52%YoY and +8%QoQ)
YoY growth supported by 20% expansion to Bt2.0bn, solely driven by sea freight (+72%YoY to Bt1.2bn while contributes 61% of total revenue in 2Q22) on the back of high freight 


WICE : Earnings Remain Solid, but Has Already Reached Its Peak

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>Yesterday, our Small Cap portfolio generated a return of -0.73% vs. the SET Index at -0.26%.</li>
<li>Most stocks in the portfolio declined in line with the market’s movement after the index was unable to surpass the resistance at 1,600 points.</li>
<li>The stocks with the biggest price declines were DOHOME (-3.77%), DOD (-2.46%), (WICE -2.46%) and RS (-1.89%).</li>
</ul>


Yesterday, our Small Cap portfolio generated a return of -0.73% vs. the SET Index at -0.26%.
Most stocks in the portfolio declined in line with the market’s movement after the index was unable to surpass the resistance at 1,600 points.
The stocks with the biggest price declines were DOHOME (-3.77%), DOD (-2.46%), (WICE -2.46%) and RS (-1.89%).


Cross Asset Strategy

<ul><li>We suggest taking profit on BAFS, M, SIS and LST (with the returns since they were added at +7.7%, +1.5%, +6.6% and +1.0%, respectively) because they have fallen out of our top rankings.</li><li>We recommend replacing them with AMANAH and KSL.</li><li>AMANAH’s 2022E net profit is expected to remain flat YoY at Bt309mn, based on our conservative assumption for loan portfolio growth of +10.0% YoY.</li></ul>

We suggest taking profit on BAFS, M, SIS and LST (with the returns since they were added at +7.7%, +1.5%, +6.6% and +1.0%, respectively) because they have fallen out of our top rankings.We recommend replacing them with AMANAH and KSL.AMANAH’s 2022E net profit is expected to remain flat YoY at Bt309mn, based on our conservative assumption for loan portfolio growth of +10.0% YoY.

Small Cap Top Picks - Changes in Recommended List

<ul>
<li>Expect impact from an expected drop in sea freight rate (50% of WICE revenue link to this freight price) is likely to be offset by an increase in cross border</li>
<li>We have factored in impact from China border restriction and a gradual drop in sea-air freight,which we anticipated to normalize to pre-COVID-19 gradually.Our revenue forecast at Bt8.2bn is on conservative</li>
<li>WICE report 1Q22 net profit at Bt158m (+93%YoY and -13%QoQ). QoQ contraction from all-time high level in 4Q21 was due to a drop in air freight and cross border revenue</li>
</ul>


Expect impact from an expected drop in sea freight rate (50% of WICE revenue link to this freight price) is likely to be offset by an increase in cross border
We have factored in impact from China border restriction and a gradual drop in sea-air freight,which we anticipated to normalize to pre-COVID-19 gradually.Our revenue forecast at Bt8.2bn is on conservative
WICE report 1Q22 net profit at Bt158m (+93%YoY and -13%QoQ). QoQ contraction from all-time high level in 4Q21 was due to a drop in air freight and cross border revenue


WICE: Earnings Still Continue to Expand in 2022 with Potential Upside

Thailand

WICE Logistics Public Company Limited provides freight shipping services. The Company offers marine freight shipping, air freight shipping and trucking services.

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Wice Logistics (WICE TB)

WICE : 3Q22 Net Profit Fell to Five-Quarter Low

We maintain HOLD recommendation for WICE with a new target price of Bt12.0. (Previous TP: Bt12.60) after derated PE multiple to 14.5xPE’23E (...

Pi Securities PCL, Thailand

WICE : Earnings Remain Solid, but Has Already Reached Its Peak

We downgrade WICE to HOLD with a new target price of Bt12.60. (Previous TP: Bt19.30) after revised earnings down by 8-15% in 2022-23E. We...

Pi Securities PCL, Thailand

Small Cap Top Picks - August 3, 2022

Most stocks in the portfolio declined in line with the market’s movement after the index was unable to surpass the resistance at 1,600 points.

Krungthai XSpring

Small Cap Top Picks - Changes in Recommended List

We suggest taking profit on BAFS, M, SIS and LST (with the returns since they were added at +7.7%, +1.5%, +6.6% and +1.0%, respectively) because...

Krungthai XSpring

WICE: Earnings Still Continue to Expand in 2022 with Potential Upside

Expect impact from an expected drop in sea freight rate (50% of WICE revenue link to this freight price) is likely to be offset by an increase in...

Pi Securities PCL, Thailand

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