Thailand: Digital Telecommunications Infrastructure Fund, Thai Foods Group Public Company Limited, Eastern Water Resources Development and Management, Origin Property and more

In today’s briefing:

DIF: A Source of Stable and Secured Income

We initiate the coverage of DIF with a BUY rating at a target price of Bt16.50, derived from a DCF methodology (WACC=7%, g=0%), implying 1xPBV’22E.
Stable and secured earnings will support high dividend yield for at least the next ten years.
The fund’s financial performance is secured by long-term contracts with high switching costs while it has not been affected by the COVID pandemic.

Maintain HOLD rating, with TP of Bt5.30 (up 15% from previous TP), based on 22.8PE’22E which is Asia ex-Japan consumer staple. Recent product prices leap in-line with feed cost hike
Expect 4Q21 earnings at B120m (-72%YoY, +126%QoQ), the QoQ surge is due to the absence of Covid-related expense, together with sales growth and margin expansion, backed by food prices rally
Solid 2022 outlook remains intact, since the product prices are expected to maintain at sky-high levels until 1H22, due to supply shortages caused by the widespread of Porcine Reproductive

We expect the company to report 4Q21 net profit at Bt169m (+7%YoY, -26%QoQ).YoY expansion will be supported by benefit from selling price adjustment for raw water (kicked of 1Q21). However
4Q21 raw water sales volume reported at 59.3 million m3 (+1%YoY -6%QoQ). Tap water sales volume contracted to 23.0 million m3 (-5%YoY -6%QoQ)
For 2021, raw water sales volume recovered 15%YoY to 264 million m3 while tap water dropped 1%YoY to 97 million m3

We expect its 4Q21 net profit to be the peak quarter at Bt922 m(+44%YoY, +30%QoQ), driven by higher real estate sales recognition and rising income from service and hotel business
We expect earnings momentum to recover in 4Q21 supported by 3 new condo projects and 6 new housing projects launch in 4Q21 (total value Bt6.3 bn)and secured backlog at Bt34bn
We maintain our positive outlook toward 2022 earnings backed by more aggressive launch new projects worth Bt26bn,(+47%YoY). Also, we expect revenue recognition from condominium project THE ORIGIN Ram 209 Interchange

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