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Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

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<p><strong>We are positive toward AWC’s earnings recovery outlook given the company’s ability to adopted cost control program effectively and benefit from earnings buffer from commercial business during the pandemic. The company’s EBITDA margin recovered to positive territory at 7.4% in 3Q20 from its trough level at -31% in the previous quarter. However, we anticipate it may take 5-6 quarters for the group to reach back its pre-COVID19 EBITDA level after the company reopened all their hospitality and retail assets in 4Q20. Faster-than-expected vaccine delivery will also create upside to AWC’s earnings in 2021-22E.</strong></p>
<div>• Anticipate gradual recovery in hospitality business</div>
<div>• AWC report net loss of Bt620m in 3Q20. A moderate recovery from all time low level in 2Q20 which driven mainly by hospitality revenue (+239%QoQ) to Bt461m and retail revenue (+21%QoQ) to Bt820m. </div>
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<p><strong>We reduce target price to Bt4.50 (Previous TP: Bt4.70) after earnings downward revision in 2020-21E. Our target price derived from DCF methodology while implies 105xPE’22E.</strong></p>

We are positive toward AWC’s earnings recovery outlook given the company’s ability to adopted cost control program effectively and benefit from earnings buffer from commercial business during the pandemic. The company’s EBITDA margin recovered to positive territory at 7.4% in 3Q20 from its trough level at -31% in the previous quarter. However, we anticipate it may take 5-6 quarters for the group to reach back its pre-COVID19 EBITDA level after the company reopened all their hospitality and retail assets in 4Q20. Faster-than-expected vaccine delivery will also create upside to AWC’s earnings in 2021-22E.
• Anticipate gradual recovery in hospitality business
• AWC report net loss of Bt620m in 3Q20. A moderate recovery from all time low level in 2Q20 which driven mainly by hospitality revenue (+239%QoQ) to Bt461m and retail revenue (+21%QoQ) to Bt820m. 

 

We reduce target price to Bt4.50 (Previous TP: Bt4.70) after earnings downward revision in 2020-21E. Our target price derived from DCF methodology while implies 105xPE’22E.

AWC: Group EBITDA Already Turned Positive in 3Q20