In today’s briefing:
- Nippon Steel’s Mandatory Offers For Thailand’s GJ Steel and G Steel
- SIS: New Business Segments Will Drive Growth In Earnings and Price
- TTB: Focusing on Quality Growth
- RS: Rising for Sustainable Growth in 2022
- SYNEX: 4Q21 Net Profit Will Be an All-Time High
Nippon Steel’s Mandatory Offers For Thailand’s GJ Steel and G Steel
- Nippon Steel Corporation (5401 JP) has announced it will acquire stakes in G J Steel Pcl (GJS TB) and G Steel Pcl (GSTEL TB).
- Nippon Steel has signed share and purchase agreements with the alternative investment unit of Ares Management Corp (ARES US), the major shareholder of both Thai electric-furnace steelmakers.
- Completion of the agreements will trigger Mandatory Tender Offers for both companies. These Offers will be unconditional.
SIS: New Business Segments Will Drive Growth In Earnings and Price
- Maintain BUY rating with a new TP of Bt50 (+10% from last TP) based on 19.7xPE’22 (+2.5SD historical 5-Year PE) due to positive prospects from new cloud and cybersecurity segments
- We rerate PE target to 19.7xPE’22 from 18.1xPE’22 to factor in upside from change in market valuations. While SIS trades at 16.2xPE’22,SYNEX and COM7 trade at an average of 35.5xPE’22
- •Expect earnings to grow 28% YoY in 22E, off the backs of new high-margin and high-demand cloud and cybersecurity segments.
TTB: Focusing on Quality Growth
- We reiterate our BUY rating with a target price at Bt1.60. Our BUY call reflects (1) steady growth ahead; (2) adequate reserves against new NPLs, and (3) compelling valuation
- The bank will concentrate its strategic efforts on improving the quality of its growth and bolstering its capital position in the face of uncertainty
- TTB expects modest lending growth ahead in 2022 with a focus on the retail market expansion
RS: Rising for Sustainable Growth in 2022
- We believe RS’s 2022E target revenue at Bt5.1bn (+31% from our 2021E forecast) is a bit optimistic given a slower-than-expected recovery in people purchasing power during post-COVID-19. However
- Our expectation over earnings recovery in 2022E will be driven by 1.) an absence of heavy SG&A expense allocation after key product launch(Camu- C) in 2021, 2.) equity income recognition
- Expect earnings in 4Q21 to reach bottom at Bt10m loss due to slower-than-expected recovery in MPC sales and Ads spending.
SYNEX: 4Q21 Net Profit Will Be an All-Time High
- We maintain HOLD rating with a TP of Bt28.40 derived from 27.0xPE’22E, (+2S.D. ten-year average). We believe that the company’s strong expected growth in 22E is largely priced in.
- We expect 4Q21 net profit to be Bt218mn (+12%QoQ), which is the company’s all time-high. All-time high revenue of Bt10.5bn (+19%QoQ),will be driven by strong sales of new Apple products
- Positive earnings growth in 2022,driven by sales in gaming devices and equipment, which are high-margin products. Gaming equipment sales come from partnerships with major gaming-related companies like Nintendo, Sony (Playstation),Razer.
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