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

Siamgas & Petrochemicals / Equity Bottom-Up

SGP posted net loss in 2Q19 of Bt127m, plunged from Bt766m in 2Q18 and Bt560m in 1Q19. 1H19 earnings accounted for 20% of our 2019E forecast. We see downside risk to our forecast and target price.
<ul>
<li>Excluding extra losses of Bt61m from the retirement benefit obligation and the impairment of equipment, 2Q19 recurring profit was Bt65m.</li>
<li>1Q19 revenue was Bt16.7bn (+4%YoY, -5% QoQ). Selling volume of LPG was the main factor for the growth YoY and the retreat QoQ.</li>
<li>Gross profit margin shrank to 1.8% (-4.8ppts YoY, -3.9ppts QoQ), given the falling in the LPG price.</li>
<li>SG&amp;A to sales was manageable at 2.0%, from 2.1% in 2Q18 and 2.0% in 1Q19.</li>
</ul>
We maintain our BUY rating with target price Bt14.0, derived from 10.9x PE’19E. We like SGP because of 1) its position as a regional player with facilities ready for business scaling and 2) on-going expansion plans in the CLMV region, which still has a low LPG penetration rate.

SGP posted net loss in 2Q19 of Bt127m, plunged from Bt766m in 2Q18 and Bt560m in 1Q19. 1H19 earnings accounted for 20% of our 2019E forecast. We see downside risk to our forecast and target price.

Excluding extra losses of Bt61m from the retirement benefit obligation and the impairment of equipment, 2Q19 recurring profit was Bt65m.
1Q19 revenue was Bt16.7bn (+4%YoY, -5% QoQ). Selling volume of LPG was the main factor for the growth YoY and the retreat QoQ.
Gross profit margin shrank to 1.8% (-4.8ppts YoY, -3.9ppts QoQ), given the falling in the LPG price.
SG&amp;A to sales was manageable at 2.0%, from 2.1% in 2Q18 and 2.0% in 1Q19.

We maintain our BUY rating with target price Bt14.0, derived from 10.9x PE’19E. We like SGP because of 1) its position as a regional player with facilities ready for business scaling and 2) on-going expansion plans in the CLMV region, which still has a low LPG penetration rate.

SGP: Loss in 2Q19 Came Mainly from LPG Price Retreat