In today’s briefing:
- GULF: 4Q21 Earnings Grew from INTUCH Profit Share
- TOP: Capital Increase Within 2022
- GPSC: High Fuel Cost to Pressure SPP Margin in 1H22
- KTB: Despite Slowing Growth Ahead, Dividend Payment Is Attractive
- SCCC: Cement Sets to Swing into Recovery Mode in 2022
- GGC: Upside Potential Is Limited in the Medium Term
GULF: 4Q21 Earnings Grew from INTUCH Profit Share
- The 4Q21 net profit rose to an all time high of Bt3.0bn (+65 YoY, +92% QoQ). excluding FX and other extraordinary items the recurring profit was Bt2.7bn (+120% YoY,+19% QoQ)
- The result came out better than our expectation, The 2021 net profit rose to a record high of Bt7.8bn (+79% YoY), 14% above our forecast.
- The 4Q21 earnings growth was due to 1st time revenue recognition from GSRC power project – Unit 2 and equity income from INTUCH.
TOP: Capital Increase Within 2022
- The BOD approved TOP’s recapitalization plan which includes 1)disposal of GPSC stake (by 2Q22) and 2) capital increase (within 2022). The proceeds will be used for repaying bridge loans raised
- The company will raise around Bt22.4bn by sale of its 10.78% stake in GPSC. And around Bt12-to-14bn by equity offering of up to 239.2m newly issued shares with green shoe
- Positive view on recapitalization plan, given the investment in CAP will provide an entry to high potential Olefin’s business segment. Also,We see the net EPS dilution to be below 5%
GPSC: High Fuel Cost to Pressure SPP Margin in 1H22
- Last week analyst meeting came out in a neutral tone. we see the overhang from rise in fuel cost (in 2021) to remain till 2H22, and later recover
- Expect the 1Q22 earnings to improve QoQ,from 1)Slightly improved SPP margin from upward Ft (tariff) adjustment and 2) Increasing IU sales. However, spike in fuel cost would drag SPP margins
- We are more positive on 2H22,2023 outlook,as we expect a 15% EPS growth in 2023 from recovering SPP margins, Increased IU sales volume, and higher share of profit from Avaada
KTB: Despite Slowing Growth Ahead, Dividend Payment Is Attractive
- We initiate our coverage of KTB with a HOLD rating and a target price of Bt15.00.Our valuation is derived from the Gordon growth model(ROE 6.8%, growth 2%), implying 0.6x PBV’22E
- Given the improving economic growth ahead, loans will continue to increase, but at a moderate rate
- Potential credit cost reduction is likely given stable asset quality and high coverage ratio
SCCC: Cement Sets to Swing into Recovery Mode in 2022
- Reiterate BUY rating with TP of Bt202 based on 14.4xPE’22E,which is close to -1SD of its 10-years mean. Our rating factors in robust outlook on cement demand recovery, hence offering
- Its 4Q21 net profit was at 1.1bn (+14%YoY, +57%QoQ), rebound fueled by strong revenue growth, together with margin expansion.
- Foresee 1Q22 earnings to remain strong QoQ, backed by demand recovery post-lockdown and heighten cement prices in local and overseas market.
GGC: Upside Potential Is Limited in the Medium Term
- Maintain HOLD rating given limited upside from current market price, with a TP of Bt14.20 based on 1.4xPBV’22E, which is ASIA ex-Japan Material sector. Our rating reflects better biodiesel
- Its 4Q21 core profit was at Bt347m (-39%YoY,+42%QoQ), supported by strong revenue growth and wider margin.
- In our view, 22-23E core profit will grow at 2%/5% due to anticipation of prices decline, to offset by stable ME and FA demand.
Before it’s here, it’s on Smartkarma
