15E TP Bt20.40 - Global Alliance Partners
Company Update October 29, 2014
Somboon Advance Technology
Trading Buy (15E TP Bt20.40)
Recovery on the way
Price Bt18.20
SAT’s 2H14 results are likely to improve in tandem with the overall auto market despite softer-than-expected momentum. We expect its earnings performance to improve and get stronger in 2015. We, therefore, keep our TRADING BUY rating unchanged with the 2015E target price of Bt20.40 (PER+1SD at 11x). Moderate auto production recovery in 3Q14 Overall auto output in 3Q14 slumped by 23%YoY to 456,435 units, but this was mainly due to weak demand in the domestic market according to the Federation of Thai Industries (FTI). The slow pace of domestic consumption recovery and the adoption of stringent loan policies by banks resulted in a dramatic reduction of domestic car sales by 29%YoY to 207,205 units. The FTI also guides that output in 4Q14 will accelerate to 546,825 units (+4%YoY and +20%QoQ), implying that overall output in 2014E should drop 20%YoY to 1.96mn units. SAT also admits that their output target of 2.0mn units has downside risk due to the soft demand from the key export market, i.e., the Middle East.
Stock Performance (%) 1M
3M
12M
Absolute
-4.22
1.11
19.73
Relative to SET
-2.43
-2.55
6.80
Share data Reuters / Bloomberg
SAT.BK/SAT TB
Sector
Automotive
Paid-up Shares (m)
425.19
Earnings recovery in 3Q14E We estimate that SAT will post a net profit of Bt143mn, up 12%QoQ but down 16%YoY. On a QoQ basis, the earnings improvement should be attributed to an increase in revenue by 7%QoQ to Bt2.0bn thanks to higher capacity utilization from 73% in 2Q14 to 79%. The commencement of new production lines (coil springs, general forging) this quarter and a change in the product mix should push the gross margin down to 15.6% from 17.4% in 2Q14. However, SG&A expenses are expected to fall significantly on the new lines’ cost reclassification, which should cause the operating margin to improve slightly to 7%. On a YoY basis, the decrease in NP should be the result of weak auto output in the absence of the first-time car buyer program.
Par (Bt)
Thai NVDR Co., Ltd.
4.49 %
Cut 2014E earnings by 7% We cut the 2014E Kubota sales by 15% to 68,000 units, following the company’s new sales guidance. This resulted from sluggish demand in the domestic market, which has been hurt by the decline in major farm prices. Thus, our 2014E earnings are revised down by 7% to Bt635mn, declining 34%YoY. SAT is not providing official guidance for 2015 at the moment, but we expect its performance to improve in tandem with overall auto output. Our 2015E earnings forecast, therefore, remains unchanged at Bt786mn, up 23%YoY.
Nortrust Nominees Ltd.
3.41 %
Financial and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm. EPS (Bt) Norm. EPS growth (%) Dividend (Bt) BV (Bt)
2012 9,410 804 2.36 2.30 80.08 0.97 12.21
FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2012 13.26 7.38 2.50 3.18 19.29 55.76
2013 8,973 966 2.27 1.93 (16.05) 0.75 11.47
2014E 8,162 635 1.49 1.48 (23.17) 0.60 12.23
2015E 9,125 786 1.85 1.85 24.70 0.74 13.45
2016E 9,962 881 2.07 2.07 12.03 0.83 14.78
2013 7.46 4.62 1.26 5.21 21.42 45.17
2014E 12.27 5.92 1.49 3.28 12.61 32.24
2015E 9.84 4.89 1.35 4.06 14.41 20.29
2016E 8.78 4.16 1.23 4.55 14.68 7.21
1.00
Market cap (Bt bn / US$ m)
8.00/239.00
Foreign limit / actual (%)
49.00/20.95
52 week High / Low (Bt)
19.60/13.20
Avg. daily T/O (shares 000)
1,215.00
NVDR (%)
6.18
Estimated free float (%)
46.79
Beta
0.78
URL
www.satpcl.co.th
Major Shareholders (25/08/2014) Somboon Holding Co., Ltd.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
26.18 %
FY14
FY15
Consensus EPS (Bt)
1.585
1.8000
KT ZMICO vs. consensus
-8.5%
5%
Company Profile The Company engages in manufacturing of the parts of motor vehicle industry such as passenger car, pick-up car, trucks and agricultural parts industry. The main major customers are the original equipment manufacturer (OEM) with the long term purchase contract and the replacement equipment manufacturer (REM). CGR 2013
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624-6273
page 1 of 5
Table 1: Auto production
Source: SAT, KT ZMICO Research
Table 2: 3Q14E earnings preview Profit and Loss Statement (Btmn) Fiscal Year-Ended Dec. 3Q13 Revenue 2,159 Gross profit 375 SG&A (189) EBITDA 430 Interest expense (41) Other income 35 Income tax (15) Other extra items (1) Gain (Loss) from affiliate 4 Net profit (loss) 170 Normalized profit (loss) 171 Reported EPS (Bt) 0.40 Gross margin 17.4% EBITDA margin 19.9% Net margin 7.9% Current ratio (x) 1.24 Interest coverage (x) 5.46 Debt to equity (x) 1.09 BVPS 11.62 ROE 15.6%
2Q14 1,881 327 (207) 372 (35) 44 (11) 1 9 128 127 0.30 17.4% 19.8% 6.8% 1.41 4.67 0.99 11.65 14.5%
3Q14E 2,015 315 (173) 423 (39) 43 (12) 9 143 143 0.34 15.6% 21.0% 7.1% 0.97 4.73 0.98 11.77 14.0%
%QoQ %YoY 9M14E %YoY 7.1% -6.6% 6,003 -13.8% -3.7% -16.1% 1,018 -14.4% -16.2% -8.2% (567) 0.4% 13.9% -1.4% 1,207 -9.9% 11.3% -3.9% (115) -2.0% -1.2% 22.6% 108 -12.7% 15.5% -18.2% (44) -17.2% -100.0% -100.0% 3 -105.7% 8.0% 114.5% 38 48.9% 11.6% -16.0% 439 -21.1% 12.6% -16.2% 437 -27.5% 11.6% -16.0% 1.03 -21.1% -1.7% -1.8% 17.0% -0.1% 1.3% 1.1% 20.1% 0.9% 0.3% -0.8% 7.3% -0.7% 0.97 4.85 0.98 1.0% 1.2% 11.77 2.5% 14.0%
2014E 8,162 1,390 (738) 1,606 (157) 154 (65) 5 46 635 631 1.49 17.0% 19.7% 7.8% 1.37 5.15 0.87 12.23 12.6%
YTD %YoY (%2014E) -9.0% 73.5% -11.4% 73.2% 2.3% 76.8% -10.9% 75.1% -0.5% 73.7% -16.9% 69.9% -23.5% 68.2% -96.2% 56.5% 57.4% 82.4% -34.3% 69.2% -23.1% 69.3% -34.3% 69.2%
6.6%
Source: SAT, KT ZMICO Research
Table 3: Earnings revision
Year ended Dec Total Revenue (Btmn) EBITDA (Btmn) Pre-tax profit (Btmn) Core profit (Btm) Net profit (Btmn) % growth EPS (Bt) Core EPS (Bt) Core EPS growth (%) Gross margin (%) SG&A to sales (%)
Previous 8,380 1,667 755 675 680 -29.6% 1.60 1.59 -17.7% 17.0% 8.2%
2014E New 8,162 1,606 696 631 635 -34.3% 1.49 1.48 -23.2% 17.0% 9.0%
%chg -2.6% -3.6% -7.8% -6.6% -6.6% -4.6% -6.6% -6.6% -5.5% 0.0% 0.9%
Previous 9,122 1,819 886 786 786 15.6% 1.85 1.85 16.4% 17.3% 8.0%
2015E New 9,125 1,819 887 786 786 23.8% 1.85 1.85 24.7% 17.3% 8.0%
%chg 0.0% 0.0% 0.1% 0.0% 0.0% 8.2% 0.0% 0.0% 8.3% 0.0% 0.0%
Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 2 of 5
(X)
25
20
15 +2 S.D. 2.5
+1 S.D. 2.0
10 Average 1.5
5 ‐1 S.D.
0 0.5
Jan‐05 Jun‐05 Nov‐05 Apr‐06 Oct‐06 Feb‐07 Jul‐07 Dec‐07 May‐08 Oct‐08 Feb‐09 Jul‐09 Dec‐09 May‐10 Oct‐10 Mar‐11 Aug‐11 Dec‐11 May‐12 Oct‐12 Mar‐13 Jul‐13 Dec‐13 May‐14 Oct‐14
Jan‐05 Jun‐05 Nov‐05 Apr‐06 Oct‐06 Feb‐07 Jul‐07 Dec‐07 May‐08 Oct‐08 Feb‐09 Jul‐09 Dec‐09 May‐10 Oct‐10 Mar‐11 Aug‐11 Dec‐11 May‐12 Oct‐12 Mar‐13 Jul‐13 Dec‐13 May‐14 Oct‐14
Table 4: PER and PBV band
PER 3.5
PBV
3.0 +1 S.D.
Average
1.0 -1 S.D.
0.0
Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 3 of 5
Financial Summary PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Equity earnings Other income / exp. EBT Corporate tax Net profit Reported EPS Core net profit Core EPS Dividend (Bt)
2012 9,410 (7,926) 1,484 (641) 1,722 (720) 1,002 (160) 11 159 1,011 (70) 804 2.36 810 2.30 0.97
2013 8,973 (7,404) 1,569 (721) 1,803 (769) 1,034 (157) 29 185 1,091 (85) 966 2.27 811 1.93 0.75
2014E 8,162 (6,771) 1,390 (738) 1,606 (800) 807 (157) 46 154 850 (65) 635 1.49 635 1.48 0.60
2015E 9,125 (7,546) 1,579 (730) 1,819 (814) 1,005 (170) 51 156 1,043 (100) 786 1.85 786 1.85 0.74
2016E 9,962 (8,215) 1,747 (797) 1,968 (846) 1,122 (186) 57 172 1,165 (112) 881 2.07 881 2.07 0.83
2012 815 670 5,739 2,197 9,421 23 2,574 5,272 4,149 9,421
2013 1,075 638 6,392 1,819 9,923 3 2,701 5,050 4,873 9,923
2014E 1,039 566 6,128 1,984 9,717 14 2,124 4,518 5,199 9,717
2015E 977 776 5,814 2,114 9,680 13 1,547 3,962 5,718 9,680
2016E 1,104 776 5,468 2,248 9,597 10 970 3,312 6,285 9,597
2012 804 720 90 154 1,768 (904) (192) (1,096) (48) 0 (136) (141) (324) 347 863 2.54
2013 966 769 94 25 1,855 (1,427) 115 (1,312) 106 86 (249) (226) (283) 260 428 1.01
2014E 635 800 (157) 12 1,290 (536) (25) (561) (565) 4 (306) 103 (765) (36) 754 1.77
2015E 786 814 (208) 20 1,411 (500) (29) (529) (578) 0 (267) (100) (945) (62) 911 2.14
2016E 881 846 (193) 20 1,554 (500) (32) (532) (580) 0 (315) 0 (895) 127 1,054 2.48
PROFITA BILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2012 46.5 44.9 96.9 15.8 18.3 9.0 8.5 8.3 8.3
2013 (4.6) 4.7 (3.8) 17.5 20.1 9.5 10.8 9.1 9.4
2014E (9.0) (10.9) (34.3) 17.0 19.7 8.0 7.8 7.7 9.3
2015E 11.8 13.2 23.8 17.3 19.9 9.3 8.6 8.6 11.3
2016E 9.2 8.2 12.0 17.5 19.8 9.5 8.8 8.8 11.3
FINANCIAL QUALITY Total debt (Btm) Total debt to capital employed (x) Net debt (Cash) (Btm) Net debt to equity (x) Interest coverage (x)
2,597 0.38 2,342 0.56 6.26
2,703 0.35 2,203 0.45 6.57
2,138 0.29 1,776 0.34 5.15
1,560 0.21 1,160 0.20 5.93
980 0.13 453 0.07 6.04
BALANCE SHEET (Btm) Cash and equivalents Inventories PP&E-net Other assets Total assets ST debt & current portion Long-term debt Total liabilities Shareholder equity Total liab. & shareholder equity CASH FLOW (Btm) Net income Depreciation & amortization Change in working capital FX, non-cash adjustment & others Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 4 of 5
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS BUY: Expecting positive total returns of 15% or more over the next 12 months TRADING BUY: Expecting positive total returns of 10% or more over the next 3 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months.
SELL INTO STRENGTH: Expecting total returns between -10% to +10% over the next 12 month; share price has largely priced in fundamentals
The industry, as defined by the NEUTRAL: analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months.
SELL: Expecting negative total returns of 10% or more over the next 12 months
UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 5 of 5
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Somboon Advance Technology
Trading Buy (15E TP Bt20.40)
Recovery on the way
Price Bt18.20
SAT’s 2H14 results are likely to improve in tandem with the overall auto market despite softer-than-expected momentum. We expect its earnings performance to improve and get stronger in 2015. We, therefore, keep our TRADING BUY rating unchanged with the 2015E target price of Bt20.40 (PER+1SD at 11x). Moderate auto production recovery in 3Q14 Overall auto output in 3Q14 slumped by 23%YoY to 456,435 units, but this was mainly due to weak demand in the domestic market according to the Federation of Thai Industries (FTI). The slow pace of domestic consumption recovery and the adoption of stringent loan policies by banks resulted in a dramatic reduction of domestic car sales by 29%YoY to 207,205 units. The FTI also guides that output in 4Q14 will accelerate to 546,825 units (+4%YoY and +20%QoQ), implying that overall output in 2014E should drop 20%YoY to 1.96mn units. SAT also admits that their output target of 2.0mn units has downside risk due to the soft demand from the key export market, i.e., the Middle East.
Stock Performance (%) 1M
3M
12M
Absolute
-4.22
1.11
19.73
Relative to SET
-2.43
-2.55
6.80
Share data Reuters / Bloomberg
SAT.BK/SAT TB
Sector
Automotive
Paid-up Shares (m)
425.19
Earnings recovery in 3Q14E We estimate that SAT will post a net profit of Bt143mn, up 12%QoQ but down 16%YoY. On a QoQ basis, the earnings improvement should be attributed to an increase in revenue by 7%QoQ to Bt2.0bn thanks to higher capacity utilization from 73% in 2Q14 to 79%. The commencement of new production lines (coil springs, general forging) this quarter and a change in the product mix should push the gross margin down to 15.6% from 17.4% in 2Q14. However, SG&A expenses are expected to fall significantly on the new lines’ cost reclassification, which should cause the operating margin to improve slightly to 7%. On a YoY basis, the decrease in NP should be the result of weak auto output in the absence of the first-time car buyer program.
Par (Bt)
Thai NVDR Co., Ltd.
4.49 %
Cut 2014E earnings by 7% We cut the 2014E Kubota sales by 15% to 68,000 units, following the company’s new sales guidance. This resulted from sluggish demand in the domestic market, which has been hurt by the decline in major farm prices. Thus, our 2014E earnings are revised down by 7% to Bt635mn, declining 34%YoY. SAT is not providing official guidance for 2015 at the moment, but we expect its performance to improve in tandem with overall auto output. Our 2015E earnings forecast, therefore, remains unchanged at Bt786mn, up 23%YoY.
Nortrust Nominees Ltd.
3.41 %
Financial and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm. EPS (Bt) Norm. EPS growth (%) Dividend (Bt) BV (Bt)
2012 9,410 804 2.36 2.30 80.08 0.97 12.21
FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2012 13.26 7.38 2.50 3.18 19.29 55.76
2013 8,973 966 2.27 1.93 (16.05) 0.75 11.47
2014E 8,162 635 1.49 1.48 (23.17) 0.60 12.23
2015E 9,125 786 1.85 1.85 24.70 0.74 13.45
2016E 9,962 881 2.07 2.07 12.03 0.83 14.78
2013 7.46 4.62 1.26 5.21 21.42 45.17
2014E 12.27 5.92 1.49 3.28 12.61 32.24
2015E 9.84 4.89 1.35 4.06 14.41 20.29
2016E 8.78 4.16 1.23 4.55 14.68 7.21
1.00
Market cap (Bt bn / US$ m)
8.00/239.00
Foreign limit / actual (%)
49.00/20.95
52 week High / Low (Bt)
19.60/13.20
Avg. daily T/O (shares 000)
1,215.00
NVDR (%)
6.18
Estimated free float (%)
46.79
Beta
0.78
URL
www.satpcl.co.th
Major Shareholders (25/08/2014) Somboon Holding Co., Ltd.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
26.18 %
FY14
FY15
Consensus EPS (Bt)
1.585
1.8000
KT ZMICO vs. consensus
-8.5%
5%
Company Profile The Company engages in manufacturing of the parts of motor vehicle industry such as passenger car, pick-up car, trucks and agricultural parts industry. The main major customers are the original equipment manufacturer (OEM) with the long term purchase contract and the replacement equipment manufacturer (REM). CGR 2013
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624-6273
page 1 of 5
Table 1: Auto production
Source: SAT, KT ZMICO Research
Table 2: 3Q14E earnings preview Profit and Loss Statement (Btmn) Fiscal Year-Ended Dec. 3Q13 Revenue 2,159 Gross profit 375 SG&A (189) EBITDA 430 Interest expense (41) Other income 35 Income tax (15) Other extra items (1) Gain (Loss) from affiliate 4 Net profit (loss) 170 Normalized profit (loss) 171 Reported EPS (Bt) 0.40 Gross margin 17.4% EBITDA margin 19.9% Net margin 7.9% Current ratio (x) 1.24 Interest coverage (x) 5.46 Debt to equity (x) 1.09 BVPS 11.62 ROE 15.6%
2Q14 1,881 327 (207) 372 (35) 44 (11) 1 9 128 127 0.30 17.4% 19.8% 6.8% 1.41 4.67 0.99 11.65 14.5%
3Q14E 2,015 315 (173) 423 (39) 43 (12) 9 143 143 0.34 15.6% 21.0% 7.1% 0.97 4.73 0.98 11.77 14.0%
%QoQ %YoY 9M14E %YoY 7.1% -6.6% 6,003 -13.8% -3.7% -16.1% 1,018 -14.4% -16.2% -8.2% (567) 0.4% 13.9% -1.4% 1,207 -9.9% 11.3% -3.9% (115) -2.0% -1.2% 22.6% 108 -12.7% 15.5% -18.2% (44) -17.2% -100.0% -100.0% 3 -105.7% 8.0% 114.5% 38 48.9% 11.6% -16.0% 439 -21.1% 12.6% -16.2% 437 -27.5% 11.6% -16.0% 1.03 -21.1% -1.7% -1.8% 17.0% -0.1% 1.3% 1.1% 20.1% 0.9% 0.3% -0.8% 7.3% -0.7% 0.97 4.85 0.98 1.0% 1.2% 11.77 2.5% 14.0%
2014E 8,162 1,390 (738) 1,606 (157) 154 (65) 5 46 635 631 1.49 17.0% 19.7% 7.8% 1.37 5.15 0.87 12.23 12.6%
YTD %YoY (%2014E) -9.0% 73.5% -11.4% 73.2% 2.3% 76.8% -10.9% 75.1% -0.5% 73.7% -16.9% 69.9% -23.5% 68.2% -96.2% 56.5% 57.4% 82.4% -34.3% 69.2% -23.1% 69.3% -34.3% 69.2%
6.6%
Source: SAT, KT ZMICO Research
Table 3: Earnings revision
Year ended Dec Total Revenue (Btmn) EBITDA (Btmn) Pre-tax profit (Btmn) Core profit (Btm) Net profit (Btmn) % growth EPS (Bt) Core EPS (Bt) Core EPS growth (%) Gross margin (%) SG&A to sales (%)
Previous 8,380 1,667 755 675 680 -29.6% 1.60 1.59 -17.7% 17.0% 8.2%
2014E New 8,162 1,606 696 631 635 -34.3% 1.49 1.48 -23.2% 17.0% 9.0%
%chg -2.6% -3.6% -7.8% -6.6% -6.6% -4.6% -6.6% -6.6% -5.5% 0.0% 0.9%
Previous 9,122 1,819 886 786 786 15.6% 1.85 1.85 16.4% 17.3% 8.0%
2015E New 9,125 1,819 887 786 786 23.8% 1.85 1.85 24.7% 17.3% 8.0%
%chg 0.0% 0.0% 0.1% 0.0% 0.0% 8.2% 0.0% 0.0% 8.3% 0.0% 0.0%
Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 2 of 5
(X)
25
20
15 +2 S.D. 2.5
+1 S.D. 2.0
10 Average 1.5
5 ‐1 S.D.
0 0.5
Jan‐05 Jun‐05 Nov‐05 Apr‐06 Oct‐06 Feb‐07 Jul‐07 Dec‐07 May‐08 Oct‐08 Feb‐09 Jul‐09 Dec‐09 May‐10 Oct‐10 Mar‐11 Aug‐11 Dec‐11 May‐12 Oct‐12 Mar‐13 Jul‐13 Dec‐13 May‐14 Oct‐14
Jan‐05 Jun‐05 Nov‐05 Apr‐06 Oct‐06 Feb‐07 Jul‐07 Dec‐07 May‐08 Oct‐08 Feb‐09 Jul‐09 Dec‐09 May‐10 Oct‐10 Mar‐11 Aug‐11 Dec‐11 May‐12 Oct‐12 Mar‐13 Jul‐13 Dec‐13 May‐14 Oct‐14
Table 4: PER and PBV band
PER 3.5
PBV
3.0 +1 S.D.
Average
1.0 -1 S.D.
0.0
Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 3 of 5
Financial Summary PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Equity earnings Other income / exp. EBT Corporate tax Net profit Reported EPS Core net profit Core EPS Dividend (Bt)
2012 9,410 (7,926) 1,484 (641) 1,722 (720) 1,002 (160) 11 159 1,011 (70) 804 2.36 810 2.30 0.97
2013 8,973 (7,404) 1,569 (721) 1,803 (769) 1,034 (157) 29 185 1,091 (85) 966 2.27 811 1.93 0.75
2014E 8,162 (6,771) 1,390 (738) 1,606 (800) 807 (157) 46 154 850 (65) 635 1.49 635 1.48 0.60
2015E 9,125 (7,546) 1,579 (730) 1,819 (814) 1,005 (170) 51 156 1,043 (100) 786 1.85 786 1.85 0.74
2016E 9,962 (8,215) 1,747 (797) 1,968 (846) 1,122 (186) 57 172 1,165 (112) 881 2.07 881 2.07 0.83
2012 815 670 5,739 2,197 9,421 23 2,574 5,272 4,149 9,421
2013 1,075 638 6,392 1,819 9,923 3 2,701 5,050 4,873 9,923
2014E 1,039 566 6,128 1,984 9,717 14 2,124 4,518 5,199 9,717
2015E 977 776 5,814 2,114 9,680 13 1,547 3,962 5,718 9,680
2016E 1,104 776 5,468 2,248 9,597 10 970 3,312 6,285 9,597
2012 804 720 90 154 1,768 (904) (192) (1,096) (48) 0 (136) (141) (324) 347 863 2.54
2013 966 769 94 25 1,855 (1,427) 115 (1,312) 106 86 (249) (226) (283) 260 428 1.01
2014E 635 800 (157) 12 1,290 (536) (25) (561) (565) 4 (306) 103 (765) (36) 754 1.77
2015E 786 814 (208) 20 1,411 (500) (29) (529) (578) 0 (267) (100) (945) (62) 911 2.14
2016E 881 846 (193) 20 1,554 (500) (32) (532) (580) 0 (315) 0 (895) 127 1,054 2.48
PROFITA BILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2012 46.5 44.9 96.9 15.8 18.3 9.0 8.5 8.3 8.3
2013 (4.6) 4.7 (3.8) 17.5 20.1 9.5 10.8 9.1 9.4
2014E (9.0) (10.9) (34.3) 17.0 19.7 8.0 7.8 7.7 9.3
2015E 11.8 13.2 23.8 17.3 19.9 9.3 8.6 8.6 11.3
2016E 9.2 8.2 12.0 17.5 19.8 9.5 8.8 8.8 11.3
FINANCIAL QUALITY Total debt (Btm) Total debt to capital employed (x) Net debt (Cash) (Btm) Net debt to equity (x) Interest coverage (x)
2,597 0.38 2,342 0.56 6.26
2,703 0.35 2,203 0.45 6.57
2,138 0.29 1,776 0.34 5.15
1,560 0.21 1,160 0.20 5.93
980 0.13 453 0.07 6.04
BALANCE SHEET (Btm) Cash and equivalents Inventories PP&E-net Other assets Total assets ST debt & current portion Long-term debt Total liabilities Shareholder equity Total liab. & shareholder equity CASH FLOW (Btm) Net income Depreciation & amortization Change in working capital FX, non-cash adjustment & others Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 4 of 5
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS BUY: Expecting positive total returns of 15% or more over the next 12 months TRADING BUY: Expecting positive total returns of 10% or more over the next 3 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months.
SELL INTO STRENGTH: Expecting total returns between -10% to +10% over the next 12 month; share price has largely priced in fundamentals
The industry, as defined by the NEUTRAL: analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months.
SELL: Expecting negative total returns of 10% or more over the next 12 months
UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES
page 5 of 5
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
