In today’s briefing:
- GlobalWafers (6488.TT): The Last Step to Go for Siltronic (WAF GR) Mergence
- China Evergrande Group – Vultures Circling
- PVR (PVRL IN) | Q3 | The “Pricy” Show Has Begun
- Bangkok Bank – Positive Credit Turn
- KBANK: Growth Momentum Remains Intact
- SCB: Going More Digital Services
GlobalWafers (6488.TT): The Last Step to Go for Siltronic (WAF GR) Mergence
- To merge with Siltronic has reached to 95% in probability for GlobalWafers now. Our target price for GlobalWafers doesn’t change at NT$880~960 and $1,200 if it finally past.
- Chinese government requested that GlobalWafers has to spin off its Denmark’s subsidiary 8” float zone (FZ) wafer within no more than 9 months at most.
- Currently, Siltronic is delivering a GM of 25.6~32% during 1Q~3Q in 2021, which is competitive to Sumco, Shin Etsu. However, it shall be able to improve the GM further.
China Evergrande Group – Vultures Circling
- Mainland Chinese municipalities and authorities continue to find numerous ways to bone pick the Evergrande carcass without compensation;
- Evergrande’s offshore bondholders are now threatening legal enforcement of collateral over the company’s “opaque” debt restructuring process; and
- Guangdong province is seeking to segregate Evergrande’s offshore assets in a fire sale to cover what they can of the company’s offshore debt.
PVR (PVRL IN) | Q3 | The “Pricy” Show Has Begun
- PVR Ltd (PVRL IN) ‘s December performance on ATP and SHP was very encouraging. If the trend sustains we believe the earnings recovery would be much faster than anticipated.
- New trends in content consumption, strong content pipeline and truce with OTT players make a case for a solid recovery for the Industry.
- PVR has historically traded at an average of 11.4x EV/EBITDA. Based on our current estimates and conservative 10.5x multiple, there is a return potential of >20% from these levels.
Bangkok Bank – Positive Credit Turn
- Bangkok Bank reported 4Q21 bottom-line results of THB 6.3 bn, declining THB 591 mn (8.6%) on a linked quarter basis, driven by costs which rose THB 3.5 bn or 21.8%;
- Outside of expenses, BBL had a pretty solid quarter with net interest income improving and provisions declining; and
- We find that BBL’s annualized net new NPLs were negative, and that reserves likely will begin being reversed in the near-term.
KBANK: Growth Momentum Remains Intact
- We reiterate our BUY rating with a target price at Bt172. Our BUY call reflects (1) steady growth ahead from improving economic recovery; (2) adequate reserves against new NPLs
- Management forecasted Thai GDP to accelerate to 3.7% YoY in 2022 from an expected rise of 1% in 2021
- Following the analyst meeting, we remain neutral and maintain our net profit projections for 2022-23
SCB: Going More Digital Services
- Maintain BUY with a target price at Bt149. Our BUY call reflects steady earnings growth, resilient asset quality, and leadership in digital banking services
- Digital banking services remain a focus ahead. SCB expects moderate lending growth and credit costs to likely decline in 2022.
- SCB X will offer newly-issued shares and make a tender offer for all of SCB’s shares in 1Q22.
Related tickers: Globalwafers (6488.TWO), Evergrande (3333.HK), PVR Ltd (PVRL.NS), Bangkok Bank Public (BBL.BK), Kasikornbank PCL (KBANK.BK), Siam Commercial Bank Pub Co (SCB.BK)
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