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

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

We initiate coverage of EA with a BUY rating, based on a 2021E target price of Bt51, which is derived from a sum-of-the-parts (SOTP) methodology. Our valuation implies 0.8xPEG for 2021E, lower than the Thailand and World utilities sector’s 0.9x and 2.1x respectively.The story:<ul>
<li>Secured stable income from power generation arm until 2023.</li>
<li>New S-curve driver from EV and ESS business</li>
<li>Synergy benefits from integrated EV-ESS business line</li>
<li>PCM and green diesel the new game changer for palm oil-based business</li>
</ul>Risks:<ul><li>Raw material price fluctuation, Delays and failure of new project, Capital increase and EPS dilution</li></ul>Background: Energy Absolute Public Company Limited (EA) together with its subsidiaries engage in manufacturing and distribution of biodiesel &amp; glycerol products both domestically and overseas. Moreover, the company generates and sells electricity in Thailand from solar and wind energy sources totaling 664MWe. In addition, the company operates charging stations under the brand “EA Anywhere”, and conducts R&amp;D into electric vehicles (EV) and energy storage systems (ESS). The company was the first in Thailand to launch electric vehicles (under the brand “MINE Mobility”). EA was founded in 2006 and is headquartered in Bangkok.

We initiate coverage of EA with a BUY rating, based on a 2021E target price of Bt51, which is derived from a sum-of-the-parts (SOTP) methodology. Our valuation implies 0.8xPEG for 2021E, lower than the Thailand and World utilities sector’s 0.9x and 2.1x respectively.The story:
Secured stable income from power generation arm until 2023.
New S-curve driver from EV and ESS business
Synergy benefits from integrated EV-ESS business line
PCM and green diesel the new game changer for palm oil-based business
Risks:Raw material price fluctuation, Delays and failure of new project, Capital increase and EPS dilutionBackground: Energy Absolute Public Company Limited (EA) together with its subsidiaries engage in manufacturing and distribution of biodiesel &amp; glycerol products both domestically and overseas. Moreover, the company generates and sells electricity in Thailand from solar and wind energy sources totaling 664MWe. In addition, the company operates charging stations under the brand “EA Anywhere”, and conducts R&amp;D into electric vehicles (EV) and energy storage systems (ESS). The company was the first in Thailand to launch electric vehicles (under the brand “MINE Mobility”). EA was founded in 2006 and is headquartered in Bangkok.

EA: One of the Prime Beneficiary of Global EV Boom