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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>Recent rally of SYNEX stock price was driven by several positive catalysts including; 1.) solid demand in IT product purchase fueled by work-from-home buyers, 2.) strong earnings recovery in 2020E driven by improvement in margin and rising equity income from Next Capital (40% stake), 3.) positive  expectation for iPhone12 sales in 4Q20 after received positive feedback from the market. However, we downgrade rating for SYNEX to SELL as most of near-term positive factors were already priced after share price surged 100% in the past four months to trade at 21.8xPE’21E (+2 S.D. 5-year average), the last time seen in November 2017.</strong></p>
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<div>• Expect moderate sales growth in SYNEX’s phone segment</div>
<div>• Global PC market benefit from COVID-19</div>
<div>• Revise core earnings up by 5-13% in 2020-22E</div>
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<p><strong>We raised the company’s new target price to Bt12.70 (Previous TP Bt11.10) derived from 15.9xPE’21E, Asia ex-Japan information and technology sector. Any near-term corrections in stock price will create opportunity to accumulate as the company will be the first benefit taker from increasing demand in IOT.</strong></p>

Recent rally of SYNEX stock price was driven by several positive catalysts including; 1.) solid demand in IT product purchase fueled by work-from-home buyers, 2.) strong earnings recovery in 2020E driven by improvement in margin and rising equity income from Next Capital (40% stake), 3.) positive  expectation for iPhone12 sales in 4Q20 after received positive feedback from the market. However, we downgrade rating for SYNEX to SELL as most of near-term positive factors were already priced after share price surged 100% in the past four months to trade at 21.8xPE’21E (+2 S.D. 5-year average), the last time seen in November 2017.

 

• Expect moderate sales growth in SYNEX’s phone segment
• Global PC market benefit from COVID-19
• Revise core earnings up by 5-13% in 2020-22E

We raised the company’s new target price to Bt12.70 (Previous TP Bt11.10) derived from 15.9xPE’21E, Asia ex-Japan information and technology sector. Any near-term corrections in stock price will create opportunity to accumulate as the company will be the first benefit taker from increasing demand in IOT.

SYNEX: Solid Earnings Growth Outlook but Largely Priced In

Synnex Thailand

SYNEX: Solid Earnings Growth Outlook but Largely Priced In