In today’s briefing:
- BBL: Growth Momentum Intact Despite Uncertainties
- BCH: Solid Start Expected in 1Q22
- ERW: Spike in International Tourists Will Speed up the Recovery
- HMPRO: Unexciting Short-Term Earnings
- LH: 1Q22 Earnings Will Grow YoY
BBL: Growth Momentum Intact Despite Uncertainties
- Maintain our BUY call with a lower target price of Bt159 (from Bt162) reflecting an earnings downgrade.Our BUY call reflects steady earnings growth,a resilient balance sheet, and an undemanding valuation.
- Management maintained its 2022 financial targets and affirmed that the bank had solid fundamentals against uncertainties ahead.
- Given the elevated volatility in the capital market ahead, we reduced our net profit projections by 4-5% for 2022-24 to reflect weaker non-interest income growth.
BCH: Solid Start Expected in 1Q22
- Reiterate HOLD rating with a TP of B21.00 derived from 14.36xPE’22E, which is close to -2SD of 3-years trailing average.Despite significant drop in 2022E earnings, we recommend a trading approach
- We estimate 1Q22E earnings to be the peak quarter at Bt2.3bn (+613%YoY,-7%QoQ), supported by YoY rise in COVID-revenue, but QoQ decline by margin erosion.
- We foresee earnings momentum to weaken in 2Q22, underscored by lower COVID-19 contribution, resulting from falling infection patients and stopped RT-PCR requirement.
ERW: Spike in International Tourists Will Speed up the Recovery
- We upgrade to BUY rating from SELL rating and raise TP by +75% to Bt4.2 derived from DCF valuation (WACC=7% & Terminal growth= 2%) implying 10% discount to 23.1xPE’23.
- We expect ERW to post net loss of Bt296m against loss of Bt492m in 1Q21 and Bt246 in 4Q21 despite strong revenue growth.
- Strong revenue growth is underpinned by the growth in domestic and international tourism due to the introduction of Test and go scheme and ‘Rao Tiew Duay Kan phase-4’ in 1Q22
HMPRO: Unexciting Short-Term Earnings
- Yesterday analyst meeting came out with a neutral tone. We reiterate our BUY rating for HMPRO with a target price of Bt17.0, which is derived from 35xPE’22E, a 40% premium
- In 1Q22, HMPRO’s SSSG was at 3.1% and GPM expanded by 26bps,which is in-line with our assumption and management targets (SSSG close to Thailand GDP growth and GPM +20bps YoY).
- We expect 2Q22 earnings to continue to grow YoY and flat QoQ supported by demand for air conditioner and promotional activities(Homepro Super Expo)together with restoring consumer confidence following an increase
LH: 1Q22 Earnings Will Grow YoY
- Maintain our BUY rating with a TP of Bt11.20, derived from SOTP and implies 13.4xPE’22E, +0.5SD from its five years trading average. Our rating reflects strong recovery in 2022 performance
- We expect 1Q22 net profit to grow YoY at Bt1.94 bn(+11%YoY, -3.6%QoQ), driven by higher revenue recognition from real estate business at Bt 7.7 bn (+8.1%YoY) and higher equity income
- New projects Launch to support 1Q22. Earnings momentum will continue in remaining quarters.
Before it’s here, it’s on Smartkarma
