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

<p><strong>We upgrade our recommendation to HOLD, from SELL rating, with new 2021E target price of Bt359.00, from Bt343.00, derived from 12.9x PE, which is its 7 years trading average.</strong></p><div>• SCC reported 3Q20 net profit of Bt9.7bn (+57% YoY, +4% QoQ), the drowsy top line was offset by solid petrochemical margin.</div><div></div><div>• We revised up our 2020-22 net profit forecasts by 23%, 5%, and 15%, respectively, mainly reflected an increase in petrochemical spread assumption.</div><div></div><div>• SCC also announced about i) temporary suspension of cement unit in Myanmar, and, ii) shares subscription in AJ’s Private Placement and establishment of Joint-Venture company in Vietnam with AJ. We see insignificant impact from the incidents as they would account for less than 2% of SCC’s assets.</div><div></div><p><strong>The petrochemical spread should be even stronger in 4Q20. However, we expect softened performance for SCC as it has planned shutdown on its MOC unit for 45 days in the quarter. We expected petrochemical profitability to retreat in 2021E, given the resumption of regional petrochemical supply as Covid-19 situation would gradually relieve.</strong></p>

We upgrade our recommendation to HOLD, from SELL rating, with new 2021E target price of Bt359.00, from Bt343.00, derived from 12.9x PE, which is its 7 years trading average.• SCC reported 3Q20 net profit of Bt9.7bn (+57% YoY, +4% QoQ), the drowsy top line was offset by solid petrochemical margin.• We revised up our 2020-22 net profit forecasts by 23%, 5%, and 15%, respectively, mainly reflected an increase in petrochemical spread assumption.• SCC also announced about i) temporary suspension of cement unit in Myanmar, and, ii) shares subscription in AJ’s Private Placement and establishment of Joint-Venture company in Vietnam with AJ. We see insignificant impact from the incidents as they would account for less than 2% of SCC’s assets.The petrochemical spread should be even stronger in 4Q20. However, we expect softened performance for SCC as it has planned shutdown on its MOC unit for 45 days in the quarter. We expected petrochemical profitability to retreat in 2021E, given the resumption of regional petrochemical supply as Covid-19 situation would gradually relieve.

SCC : Strong 3Q20 Thanks to Petrochemical Spread

Siam Cement

SCC : Strong 3Q20 Thanks to Petrochemical Spread