17E TP Bt11.70
Land and Houses Buy (17E TP Bt11.70)
Company Update
Close Bt10.00
Property Development June 22, 2017
Earnings upgrade /Earnings downgrade/Overview unchanged
Extra gain will boost 2017E net profit Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.739
0.746
KT ZMICO vs. consensus Share data
17.7%
‐4.8%
Reuters / Bloomberg
LH.BK/LH TB
Paid‐up Shares (m)
11,949.71
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
119.00/3,517.00
Foreign limit / actual (%)
30.00/29.99
52 week High / Low (Bt)
10.40/7.60
Avg. daily T/O (shares 000)
23,610.00
NVDR (%)
18.88
Estimated free float (%)
43.87
Beta
1.11
URL
www.lh.co.th
CGR
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
n.a.
Maintain Buy with the new 17E TP of Bt11.70 We maintain a Buy rating for LH with the new 17E TP of Bt11.70 from Bt12 after we revised down 2017E core profit by 2.8%. However, our 2017E net profit was revised up by 23.6% after we included extra gain at a total amount of Bt2.2bn in our new forecast. We still like LH as a top pick as it now has catalysts from its 2Q17E earnings that will be better QoQ and also the expected 1H17E dividend of Bt0.35, implying a yield of 3.5%. Expected to book extra gain of Bt1.06bn from selling GCP in 2Q17E The LH Hotel Leasehold Real Estate Investment Trust (LHHOTEL) announced an investment in the Grand Center Point Ratchadamri Hotel (GCP) on Jun 15, 17 with the price of Bt3.7bn. Based on LHHOTEL’s investment value of Bt3.7bn and the GCP Ratchadamri Hotel’s estimated book value of Bt1.47bn as of mid Jun‐17, we estimate that LH will book gain on the sale after tax of around Bt1.06bn (based on a 60% holding portion) in 2Q17E; hence, we include this extra gain in our new 2017E forecast. Shared gain from LHBANK to be reduced by 5%‐39% after shareholding dilution in Aug‐17 We expect CTBC’s share subscription in LHBANK to be completed in Aug‐ 17 and then LH’s shareholding in LHBANK will be diluted to 21.9% from currently at 33.98%. Hence, we expect 2017‐18E shared gain from LHBANK to decrease by 5% and 39%, respectively, from our previous forecasts, which will also cause the overall shared gain from associates to decline by 5% and 12% from our previous estimates. To book extra gain on change in shareholders' equity of LHBANK in 3Q17E We expect LH to record accounting gain on the change in shareholders’ equity of LHBANK in the amount of around Bt1.1bn after CTBC’s transaction is completed in 3Q17E. Hence, we have included this extra item in our forecasts. Revised down 2017‐18E core profit forecasts by 2.8%‐4.6% but revised up 2017E net profit by 23.6% We revised down our 2017‐18E core profit by 2.8% and 4.6%, respectively, after we decreased shared gain from associates by 5% and 12% from our previous estimates due to LHBANK’s shared gain dilution effect. Meanwhile, 2017E net profit was increased by 23.6% from the previous forecast as we included the following in our estimate: 1) gain from selling GCP of Bt1.06bn in 2Q17E and 2) gain from the change in LHBANK’s shareholding equity of Bt1.1bn in 3Q17E. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) Normalized PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 28,317 8,423 0.77 18.7 0.63 (2.2) 0.65 4.0 2014 13.0 15.8 20.2 2.5 6.5 21.3 66.4
2015 26,260 7,920 0.68 (11.9) 0.58 (8.7) 0.60 4.0 2015 14.8 17.3 24.7 2.5 6.0 17.4 69.2
2016 29,909 8,618 0.73 8.3 0.69 19.0 0.65 4.1 2016 13.7 14.5 22.8 2.5 6.5 18.2 86.9
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 34,083 10,443 0.87 18.7 0.69 0.2 0.76 4.3 2017E 11.5 14.5 22.5 2.3 7.6 20.9 84.2
2018E 35,117 8,530 0.71 (18.3) 0.71 2.9 0.62 4.3 2018E 14.1 14.1 21.8 2.3 6.2 16.4 83.4
Figure 1: Major forecast revisions Previous 2017E
New 2017E
% Change 2017E
Previous 2018E
New 2018E
% Change 2018E
Shared gain from associates
3,204
3,372
(5.0)
3,198
3,614
(11.5)
Core profit
8,291
8,527
(2.8)
8,530
8,938
(4.6)
Net profit
10,443
8,447
23.6
8,530
8,938
(4.6)
EPS
0.87
0.70
23.6
0.71
0.74
(4.6)
Core EPS
0.69
0.71
(2.8)
0.71
0.74
(4.6)
Btmn
Source: LH, KT ZMICO Research
Figure 2: Presales
Figure 3: Backlog at end 1Q17
Btmn
Btmn
30,000
14,000
25,000
12,000
20,000
10,000
15,000
8,000 6,000
10,000
4,000
5,000
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
2015 2016
2,000
‐
‐ 2017
2018
Low‐rise
High rise
Source: LH, KT ZMICO Research
2019
Condo
Low rise
Source: LH, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital 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) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2014 28,317 (18,206) 10,111 (4,005) 6,886 391 6,496 (503) 390 11,393 (1,864) 0 3,113 2,210 8,423 0.77 0.77 6,947 0.63 0.65
2015 26,260 (17,313) 8,947 (3,574) 6,072 300 5,771 (305) 398 10,268 (1,601) 0 2,287 2,437 7,920 0.68 0.68 6,775 0.58 0.60
2016 29,909 (19,635) 10,274 (3,971) 6,994 243 6,751 (373) 447 10,700 (1,572) 0 1,318 2,964 8,618 0.73 0.73 8,103 0.69 0.65
2017E 34,083 (22,677) 11,406 (4,749) 7,312 200 7,112 (431) 456 13,170 (1,844) 0 3,284 3,204 10,443 0.87 0.87 8,291 0.69 0.76
2018E 35,117 (23,369) 11,748 (4,884) 7,532 206 7,326 (356) 462 10,168 (1,464) 0 0 3,198 8,530 0.71 0.71 8,530 0.71 0.62
2014 6,738 172 43,487 8,147 1,617 86,888 10,365 25,765 42,613 10,986 44,275 86,888
2015 10,159 184 48,118 10,823 1,921 98,070 9,814 32,790 51,175 11,730 46,895 98,070
2016 3,011 157 48,926 18,335 1,247 101,506 11,735 32,929 53,554 11,787 47,952 101,506
2017E 2,263 200 51,500 19,027 1,615 107,283 14,150 32,001 55,184 12,031 52,099 107,283
2018E 200 192 48,615 18,811 1,661 105,249 17,972 25,772 53,034 12,031 52,215 105,249
2014 8,423 (3,252) 391 (3,260) 2,301 5,600 36 5,637 616 3,396 (5,123) (1,538) (2,650) 5,289 (219) (0.02)
2015 7,920 (3,160) 300 (3,504) 1,557 1,840 34 1,874 6,478 2,630 (8,504) (1,357) (753) 2,678 1,397 0.12
2017E 10,443 (3,284) 200 (3,919) 3,439 (200) 500 300 1,594 0 (7,661) 0 (6,067) (2,328) 3,355 0.28
2018E 8,530 (3,278) 206 3,074 8,532 (200) 0 (200) (2,428) 0 (8,588) 0 (11,016) (2,684) 8,447 0.70
2014 12.9 1.2 18.7 35.7 24.3 22.9 29.7 24.5 16.4
2015 (7.3) (11.8) (11.9) 34.1 23.1 22.0 30.2 25.8 15.6
2016 8,618 (2,804) 243 1,221 7,278 (6,023) 42 (5,981) 2,004 571 (8,639) (1,709) (7,773) (6,476) 5,170 0.44 2016 13.9 15.2 8.3 34.4 23.4 22.6 28.8 27.1 14.7
2017E 14.0 4.6 18.7 33.5 21.5 20.9 30.6 24.3 14.0
2018E 3.0 3.0 (18.3) 33.5 21.4 20.9 24.3 24.3 14.4
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD, TFD.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws.
Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
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
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
Company Update
Close Bt10.00
Property Development June 22, 2017
Earnings upgrade /Earnings downgrade/Overview unchanged
Extra gain will boost 2017E net profit Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.739
0.746
KT ZMICO vs. consensus Share data
17.7%
‐4.8%
Reuters / Bloomberg
LH.BK/LH TB
Paid‐up Shares (m)
11,949.71
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
119.00/3,517.00
Foreign limit / actual (%)
30.00/29.99
52 week High / Low (Bt)
10.40/7.60
Avg. daily T/O (shares 000)
23,610.00
NVDR (%)
18.88
Estimated free float (%)
43.87
Beta
1.11
URL
www.lh.co.th
CGR
Anti‐corruption
Worarat Powpaka Analyst, no. 17992 [email protected] 66 (0) 2624‐6248
n.a.
Maintain Buy with the new 17E TP of Bt11.70 We maintain a Buy rating for LH with the new 17E TP of Bt11.70 from Bt12 after we revised down 2017E core profit by 2.8%. However, our 2017E net profit was revised up by 23.6% after we included extra gain at a total amount of Bt2.2bn in our new forecast. We still like LH as a top pick as it now has catalysts from its 2Q17E earnings that will be better QoQ and also the expected 1H17E dividend of Bt0.35, implying a yield of 3.5%. Expected to book extra gain of Bt1.06bn from selling GCP in 2Q17E The LH Hotel Leasehold Real Estate Investment Trust (LHHOTEL) announced an investment in the Grand Center Point Ratchadamri Hotel (GCP) on Jun 15, 17 with the price of Bt3.7bn. Based on LHHOTEL’s investment value of Bt3.7bn and the GCP Ratchadamri Hotel’s estimated book value of Bt1.47bn as of mid Jun‐17, we estimate that LH will book gain on the sale after tax of around Bt1.06bn (based on a 60% holding portion) in 2Q17E; hence, we include this extra gain in our new 2017E forecast. Shared gain from LHBANK to be reduced by 5%‐39% after shareholding dilution in Aug‐17 We expect CTBC’s share subscription in LHBANK to be completed in Aug‐ 17 and then LH’s shareholding in LHBANK will be diluted to 21.9% from currently at 33.98%. Hence, we expect 2017‐18E shared gain from LHBANK to decrease by 5% and 39%, respectively, from our previous forecasts, which will also cause the overall shared gain from associates to decline by 5% and 12% from our previous estimates. To book extra gain on change in shareholders' equity of LHBANK in 3Q17E We expect LH to record accounting gain on the change in shareholders’ equity of LHBANK in the amount of around Bt1.1bn after CTBC’s transaction is completed in 3Q17E. Hence, we have included this extra item in our forecasts. Revised down 2017‐18E core profit forecasts by 2.8%‐4.6% but revised up 2017E net profit by 23.6% We revised down our 2017‐18E core profit by 2.8% and 4.6%, respectively, after we decreased shared gain from associates by 5% and 12% from our previous estimates due to LHBANK’s shared gain dilution effect. Meanwhile, 2017E net profit was increased by 23.6% from the previous forecast as we included the following in our estimate: 1) gain from selling GCP of Bt1.06bn in 2Q17E and 2) gain from the change in LHBANK’s shareholding equity of Bt1.1bn in 3Q17E. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) Normalized PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 28,317 8,423 0.77 18.7 0.63 (2.2) 0.65 4.0 2014 13.0 15.8 20.2 2.5 6.5 21.3 66.4
2015 26,260 7,920 0.68 (11.9) 0.58 (8.7) 0.60 4.0 2015 14.8 17.3 24.7 2.5 6.0 17.4 69.2
2016 29,909 8,618 0.73 8.3 0.69 19.0 0.65 4.1 2016 13.7 14.5 22.8 2.5 6.5 18.2 86.9
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 34,083 10,443 0.87 18.7 0.69 0.2 0.76 4.3 2017E 11.5 14.5 22.5 2.3 7.6 20.9 84.2
2018E 35,117 8,530 0.71 (18.3) 0.71 2.9 0.62 4.3 2018E 14.1 14.1 21.8 2.3 6.2 16.4 83.4
Figure 1: Major forecast revisions Previous 2017E
New 2017E
% Change 2017E
Previous 2018E
New 2018E
% Change 2018E
Shared gain from associates
3,204
3,372
(5.0)
3,198
3,614
(11.5)
Core profit
8,291
8,527
(2.8)
8,530
8,938
(4.6)
Net profit
10,443
8,447
23.6
8,530
8,938
(4.6)
EPS
0.87
0.70
23.6
0.71
0.74
(4.6)
Core EPS
0.69
0.71
(2.8)
0.71
0.74
(4.6)
Btmn
Source: LH, KT ZMICO Research
Figure 2: Presales
Figure 3: Backlog at end 1Q17
Btmn
Btmn
30,000
14,000
25,000
12,000
20,000
10,000
15,000
8,000 6,000
10,000
4,000
5,000
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
2015 2016
2,000
‐
‐ 2017
2018
Low‐rise
High rise
Source: LH, KT ZMICO Research
2019
Condo
Low rise
Source: LH, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital 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) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2014 28,317 (18,206) 10,111 (4,005) 6,886 391 6,496 (503) 390 11,393 (1,864) 0 3,113 2,210 8,423 0.77 0.77 6,947 0.63 0.65
2015 26,260 (17,313) 8,947 (3,574) 6,072 300 5,771 (305) 398 10,268 (1,601) 0 2,287 2,437 7,920 0.68 0.68 6,775 0.58 0.60
2016 29,909 (19,635) 10,274 (3,971) 6,994 243 6,751 (373) 447 10,700 (1,572) 0 1,318 2,964 8,618 0.73 0.73 8,103 0.69 0.65
2017E 34,083 (22,677) 11,406 (4,749) 7,312 200 7,112 (431) 456 13,170 (1,844) 0 3,284 3,204 10,443 0.87 0.87 8,291 0.69 0.76
2018E 35,117 (23,369) 11,748 (4,884) 7,532 206 7,326 (356) 462 10,168 (1,464) 0 0 3,198 8,530 0.71 0.71 8,530 0.71 0.62
2014 6,738 172 43,487 8,147 1,617 86,888 10,365 25,765 42,613 10,986 44,275 86,888
2015 10,159 184 48,118 10,823 1,921 98,070 9,814 32,790 51,175 11,730 46,895 98,070
2016 3,011 157 48,926 18,335 1,247 101,506 11,735 32,929 53,554 11,787 47,952 101,506
2017E 2,263 200 51,500 19,027 1,615 107,283 14,150 32,001 55,184 12,031 52,099 107,283
2018E 200 192 48,615 18,811 1,661 105,249 17,972 25,772 53,034 12,031 52,215 105,249
2014 8,423 (3,252) 391 (3,260) 2,301 5,600 36 5,637 616 3,396 (5,123) (1,538) (2,650) 5,289 (219) (0.02)
2015 7,920 (3,160) 300 (3,504) 1,557 1,840 34 1,874 6,478 2,630 (8,504) (1,357) (753) 2,678 1,397 0.12
2017E 10,443 (3,284) 200 (3,919) 3,439 (200) 500 300 1,594 0 (7,661) 0 (6,067) (2,328) 3,355 0.28
2018E 8,530 (3,278) 206 3,074 8,532 (200) 0 (200) (2,428) 0 (8,588) 0 (11,016) (2,684) 8,447 0.70
2014 12.9 1.2 18.7 35.7 24.3 22.9 29.7 24.5 16.4
2015 (7.3) (11.8) (11.9) 34.1 23.1 22.0 30.2 25.8 15.6
2016 8,618 (2,804) 243 1,221 7,278 (6,023) 42 (5,981) 2,004 571 (8,639) (1,709) (7,773) (6,476) 5,170 0.44 2016 13.9 15.2 8.3 34.4 23.4 22.6 28.8 27.1 14.7
2017E 14.0 4.6 18.7 33.5 21.5 20.9 30.6 24.3 14.0
2018E 3.0 3.0 (18.3) 33.5 21.4 20.9 24.3 24.3 14.4
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD, TFD.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws.
Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
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
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
