Equity Bottom-Up: Mitra Adiperkasa, Synnex Thailand, Electricity Generating and more

In today’s briefing:

Mitra Adiperkasa (MAPI IJ) – Reasons to Be Cheerful

Mitra Adiperkasa‘s recent 1Q2022 results and a follow up conversation with management confirmed continuing momentum in the recovery with a lot more to come in the next few quarters.
Sports, digital, and F&B are leading the recovery with greater mobility boosting sales but online sales remain strong reflecting changing consumer habits and the success of the company’s strategy there.
Mitra Adiperkasa is back on an expansion tack both in Indonesia and in Thailand, Vietnam, and the Philippines, with capex forecast at 2019 levels this year. Valuations are attractive.

Maintain our BUY recommendation with TP of Bt29.75,derived from 27.0xPE’22 (+2SD of average 10-yr trading). Yesterday’s analyst meeting came out with neutral tone. While we are cautious of the inflationa
Management affirms that weakening consumer demand, shortages caused by China lockdowns and Russo-Ukrainian War, and weakening Baht will not impact SYNEX’s 2022 performance.
Management maintains their guidance of +15% revenue growth YoY in 2022, but admits post-2022 top-line growth will not match the levels seen during Covid period (2020-21).

The analyst meeting came out in a positive tone.The solid 2022 earnings outlook, decent dividend yield and lowering ESG concerns from transition to clean energy should support the stock performance.
Expect 2Q recurring profit to remain weak and recover thereafter, following seasonality of Paju ES, (49% stake, 1.8GWe).
The 2022 outlook looks solid from normalizing power plant operation (recovering demand)after COVID1-19 impact. Also,we see upside from new project acquisition as the company target to add 1.0GWe to portfolio

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