In today’s briefing:
- SIS: Cloud and Cybersecurity Will Be the New Main Focus for Growth
- M: Expect Strong Earnings Recovery in 1Q22
- SCB: More Challenging Ahead from New Regulations
SIS: Cloud and Cybersecurity Will Be the New Main Focus for Growth
- Analyst meeting came out with positive tone. Cloud and cybersecurity businesses should grow rapidly over the next few years.Current inventory stock provides 4 to 6 months buffer from Chinese lockdown
- We believe that cloud and cybersecurity will drive earnings at a CAGR of 18.5% between 2021-24E, led sales growth at 8.6% CAGR and slightly improved margins. Management maintains strong outlook
- We expect 1Q22E earnings at Bt201m(+6%QoQ, +6%YoY)driven QoQ by GPM expansion. We recommend accumulating shares now as earnings in 1H22 should be the lowest of the year due to seasonality.
M: Expect Strong Earnings Recovery in 1Q22
- We reiterate our BUY rating for M with a target price of Bt61.0 based on 25xPE’22E, Asia ex-Japan consumer staple sector.
- We expect M to report net profit of Bt393m in 1Q22 (+343%YoY, -2%QoQ) driven by a positive same-store-sales-growth (SSSG) in three main brands (MK, Yayoi, and Laem Charoen Seafood)
- We forecast earnings to bounce back to Bt2.2bn in 2022 and continue to grow at 14%CAGR(2023-24) supported by 1) solid recovery in SSSG after resuming dine-in services together with restoring
SCB: More Challenging Ahead from New Regulations
- Maintain BUY with a target price of Bt149.Our BUY call reflects steady earnings growth,resilient asset quality, and compelling valuation. Our valuation is derived from the Gordon Growth Model (ROE 9.5%
- Net profit will likely rise 2% YoY (+30% QoQ) in 1Q22 given higher net interest income from elevated loans and lower provisions.
- The S&P Global Rating downgrade will likely have minimal impacts on SCB’s fundamentals.
Before it’s here, it’s on Smartkarma
