17E TP Bt36.00 - Global Alliance Partners
Minor International
Sell (17E TP Bt36.00)
Earnings Review
Close Bt39.75
Food & Beverage August 10, 2017
Beat forecast/Below forecast/In‐line Result beats forecast on tax expenses Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
8.542
8.268
KT ZMICO vs. consensus Share data
‐2.1%
‐3.5%
Reuters / Bloomberg
MINT.BK/MINT TB
Paid-up Shares (m)
2,040.03
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
177.00/5,337.00
Foreign limit / actual (%)
40.00/23.39
52 week High / Low (Bt)
88.00/63.75
Avg. daily T/O (shares 000)
5,013.00
NVDR (%)
16.29
Estimated free float (%)
50.19
Beta
1.03
URL
www.minorinternational.com
CGR Level 4 (Certified)
Anti‐corruption
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6236
Core profit rose 24%YoY MINT reported a core profit of Bt737mn, beating our forecast by 6% due mainly to tax income of Bt3mn (instead of tax expenses at around 15% ‐ 20% of EBT). The core profit growth of 24%YoY was driven mainly by the strong hotel operations in Thailand, Brazil, Zambia, and Portugal. We maintain our profit forecast and the 17E TP. Our Sell recommendation stands. Impressive improvement in hotels’ RevPAR RevPAR of MINT’s owned hotels increased by 12%YoY, driven by strong operations in Thailand, Brazil, Zambia, and Portugal. Revenue of hotels in Thailand rose by 10%YoY on the back of strong tourist arrivals in 2Q17, which grew 7.6%YoY. After the completion of renovations, hotels in Brazil drove up the RevPAR of overseas hotels, which increased by 11%YoY. AVC improved margin of real estate business There were no luxury residential units sold in this quarter. However, the bottom line of the real estate business has improved substantially (from Bt30mn to Bt154mn) due mainly to the turnaround of AVC business after MINT revamped its selling program last year. Food dragged down the performance this quarter Food’s top line inched up only 1% owing to poor SSSG in all four main hubs. Thailand and China reported a slight drop of SSSG at 1%, Australia remained flat, and Singapore continued to be a challenging area. Therefore, total SSSG dipped by 1% while outlet expansion was around 8%YoY. Zero effective tax rate should be temporary MINT’s effective tax rate turned to zero this quarter because of management’s estimate and a tax exemption for dividends from subsidiaries. We believe this should be temporary and leave our tax rate assumption at 20% for 17E. Maintain Sell Core profit for 1H17 was 50% of our 17E forecast and we leave our forecast intact. The stock price looks overvalued compared to our 17E TP at Bt36.00. We therefore maintain our Sell rating. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Norm net profit (Btmn) Norm EPS (Bt) Norm EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 37,228 4,250 0.97 ‐0.1% 0.25 6.37 2014 40.38 27.52 6.24 0.6% 15.8% 96%
2015 42,432 4,704 1.07 10.7% 0.35 7.44 2015 37.20 26.39 5.34 0.9% 23.1% 115%
2016 51,152 4,576 1.04 ‐2.8% 0.35 8.48 2016 38.28 20.64 4.69 0.9% 18.8% 111%
2017E 55,196 5,228 1.19 14.2% 0.47 9.32 2017E 32.79 17.50 4.25 1.2% 13.3% 102%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 60,563 6,021 1.37 15.2% 0.55 10.21 2018E 29.16 15.83 3.89 1.4% 14.0% 87%
2019E 63,468 6,579 1.49 9.3% 0.60 11.15 2019E 26.82 14.85 3.56 1.5% 14.0% 69%
Figure 1: MINT’s 2Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Other extraordinary items Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt)
2Q16 12,029 6,871 1,418 (386) 599 (102) 136 30 732 596 0.17 57.1 11.8 5.0 1.3 1.3 1.2 8.0 2.0
Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt / equity (x) BVPS (Bt) ROE (%)
1Q17 14,644 8,700 2,988 (403) 511 (297) 0 224 1,924 1,924 0.44 59.4 20.4 13.1 0.9 4.9 1.1 8.8 5.0
2Q17 12,528 7,478 1,385 (463) 692 3 0 135 737 737 0.17 59.7 11.1 5.9 0.8 0.9 1.2 8.5 1.9
% YoY 4.1 8.8 (2.3) 20.0 15.6 (102.7) n.m. 344.4 0.7 23.7 0.5
% QoQ (14.5) (14.0) (53.6) 14.9 35.5 (100.9) n.m. (39.5) (61.7) (61.7) (61.7)
6M17 27,172 16,178 4,373 (866) 1,203 (294) 0 359 2,661 2,661 0.60 59.5 16.1 9.8 0.8 2.7 1.2 8.5 1.9
% YoY 7.9 10.7 8.9 9.4 2.2 (26.5) n.m. 68.0 (38.2) 18.9 (38.3)
2017E 55,196 32,864 9,979 (1,729) 2,664 (1,230) 0 600 5,347 5,347 1.21 59.5 18.1 9.7 1.1 3.1 1.0 9.3 13.6
% YoY 7.9 11.8 27.0 7.6 (6.7) 19.2 n.m. 1.4 (18.9) 16.9 (18.9)
YTD (% 17E) 49.2 49.2 43.8 50.1 45.2 23.9 n.m. 59.9 49.8 49.8 49.8
Sources: MINT, KT Zmico Research Figure 3: MINT’s PBV band
Figure 2: MINT’s PER band (X)
(X) 6.0
45 40
+2 S.D.
35 30
+1 S.D. 4.0
Avg.
25
15
Avg.
3.0
-1 S.D.
20
+2 S.D.
5.0
+1 S.D.
-1 S.D.
2.0
-2 S.D.
10
-2 S.D.
1.0
5
Source: Bloomberg, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Source: Bloomberg, KT Zmico Research
Jan-07
0.0
0
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 Gain (loss) from affiliates Extra items Non‐controlling interest Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories Investment 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 Non‐cash adjustment 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 37,228 (15,321) 21,907 (18,422) 6,372 (2,887) 3,485 (1,145) 1,584 3,924 (397) 823 152 (100) 4,402 1.00 1.00 4,250 0.97 0.25
2015 42,432 (17,829) 24,603 (21,473) 6,254 (3,124) 3,129 (1,301) 2,127 3,956 (411) 1,254 2,336 (94) 7,040 1.60 1.60 4,704 1.07 0.35
2016 51,152 (21,761) 29,390 (25,765) 7,501 (3,875) 3,626 (1,606) 3,215 5,235 (1,032) 592 2,014 (219) 6,590 1.50 1.49 4,576 1.04 0.35
2017E 55,196 (22,332) 32,864 (27,718) 9,823 (4,677) 5,146 (1,729) 2,664 6,082 (1,199) 600 0 (255) 5,228 1.19 1.19 5,228 1.19 0.47
2014 5,372 3,326 1,942 8,123 39,814 15,703 74,279 6,620 27,461 44,255 4,202 30,024 74,279
2015 4,003 4,960 2,414 10,162 53,002 21,196 95,737 4,101 41,373 59,822 4,642 35,915 95,737
2016 4,399 5,059 2,763 9,511 70,090 16,632 108,453 7,821 42,010 67,656 4,622 40,797 108,453
2017E 4,159 5,459 2,981 11,004 72,413 16,869 112,886 3,787 46,061 68,147 4,622 44,736 112,882
2014 4,502 (1,308) 2,887 (693) 5,388 (13,798) 386 (13,412) 11,400 1 (1,401) 26 10,027 2,003 (8,024) (2.01)
2015 7,134 (3,353) 3,124 (3,659) 3,247 (12,821) (1,105) (13,926) 10,147 22 (1,001) 125 9,294 (1,386) (10,679) (2.43)
2016 6,809 (3,180) 3,875 (363) 7,141 (9,472) (346) (9,818) 4,459 293 (1,540) (209) 3,003 326 (2,677) (0.61)
2017E 5,483 (600) 4,677 (382) 9,178 (8,000) 109 (7,891) 16 0 (1,544) 0 (1,527) (240) 1,287 0.29
2014 7.4% 4.2% ‐0.1% 58.8% 17.1% 9.4% 11.8% 11.4% 10.1%
2015 14.0% ‐1.9% 10.7% 58.0% 14.7% 7.4% 16.6% 11.1% 10.4%
2016 20.5% 19.9% ‐2.8% 57.5% 14.7% 7.1% 12.9% 8.9% 19.7%
2017E 7.9% 31.0% 14.2% 59.5% 17.8% 9.3% 9.5% 9.5% 19.7%
2018E 60,563 (24,775) 35,788 (29,802) 11,102 (5,116) 5,986 (1,784) 2,885 7,087 (1,397) 628 0 (297) 6,021 1.37 1.37 6,021 1.37 0.55
2018E 5,843 5,990 3,271 12,521 72,297 17,057 116,978 6,013 42,556 68,013 4,622 48,962 116,975
2019E 63,468 (25,970) 37,497 (30,913) 11,942 (5,357) 6,585 (1,745) 3,008 7,849 (1,547) 606 0 (329) 6,579 1.49 1.49 6,579 1.49 0.60 2019E 8,613 6,277 3,428 14,011 69,940 16,895 119,164 13,022 32,543 65,699 4,622 53,462 119,161
2018E 6,318 (628) 5,116 136 10,942 (6,000) 111 (5,889) (1,278) 0 (2,091) 0 (3,370) 1,684 5,053 1.15
2019E 6,908 (606) 5,357 409 12,068 (4,000) 116 (3,884) (3,005) 0 (2,408) 0 (5,413) 2,770 8,184 1.86
2018E 9.7% 13.0% 15.2% 59.1% 18.3% 9.9% 9.9% 9.9% 19.7%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2019E 4.8% 7.6% 9.3% 59.1% 18.8% 10.4% 10.4% 10.4% 19.7%
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.
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 returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. 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
Sell (17E TP Bt36.00)
Earnings Review
Close Bt39.75
Food & Beverage August 10, 2017
Beat forecast/Below forecast/In‐line Result beats forecast on tax expenses Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
8.542
8.268
KT ZMICO vs. consensus Share data
‐2.1%
‐3.5%
Reuters / Bloomberg
MINT.BK/MINT TB
Paid-up Shares (m)
2,040.03
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
177.00/5,337.00
Foreign limit / actual (%)
40.00/23.39
52 week High / Low (Bt)
88.00/63.75
Avg. daily T/O (shares 000)
5,013.00
NVDR (%)
16.29
Estimated free float (%)
50.19
Beta
1.03
URL
www.minorinternational.com
CGR Level 4 (Certified)
Anti‐corruption
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6236
Core profit rose 24%YoY MINT reported a core profit of Bt737mn, beating our forecast by 6% due mainly to tax income of Bt3mn (instead of tax expenses at around 15% ‐ 20% of EBT). The core profit growth of 24%YoY was driven mainly by the strong hotel operations in Thailand, Brazil, Zambia, and Portugal. We maintain our profit forecast and the 17E TP. Our Sell recommendation stands. Impressive improvement in hotels’ RevPAR RevPAR of MINT’s owned hotels increased by 12%YoY, driven by strong operations in Thailand, Brazil, Zambia, and Portugal. Revenue of hotels in Thailand rose by 10%YoY on the back of strong tourist arrivals in 2Q17, which grew 7.6%YoY. After the completion of renovations, hotels in Brazil drove up the RevPAR of overseas hotels, which increased by 11%YoY. AVC improved margin of real estate business There were no luxury residential units sold in this quarter. However, the bottom line of the real estate business has improved substantially (from Bt30mn to Bt154mn) due mainly to the turnaround of AVC business after MINT revamped its selling program last year. Food dragged down the performance this quarter Food’s top line inched up only 1% owing to poor SSSG in all four main hubs. Thailand and China reported a slight drop of SSSG at 1%, Australia remained flat, and Singapore continued to be a challenging area. Therefore, total SSSG dipped by 1% while outlet expansion was around 8%YoY. Zero effective tax rate should be temporary MINT’s effective tax rate turned to zero this quarter because of management’s estimate and a tax exemption for dividends from subsidiaries. We believe this should be temporary and leave our tax rate assumption at 20% for 17E. Maintain Sell Core profit for 1H17 was 50% of our 17E forecast and we leave our forecast intact. The stock price looks overvalued compared to our 17E TP at Bt36.00. We therefore maintain our Sell rating. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Norm net profit (Btmn) Norm EPS (Bt) Norm EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 37,228 4,250 0.97 ‐0.1% 0.25 6.37 2014 40.38 27.52 6.24 0.6% 15.8% 96%
2015 42,432 4,704 1.07 10.7% 0.35 7.44 2015 37.20 26.39 5.34 0.9% 23.1% 115%
2016 51,152 4,576 1.04 ‐2.8% 0.35 8.48 2016 38.28 20.64 4.69 0.9% 18.8% 111%
2017E 55,196 5,228 1.19 14.2% 0.47 9.32 2017E 32.79 17.50 4.25 1.2% 13.3% 102%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 60,563 6,021 1.37 15.2% 0.55 10.21 2018E 29.16 15.83 3.89 1.4% 14.0% 87%
2019E 63,468 6,579 1.49 9.3% 0.60 11.15 2019E 26.82 14.85 3.56 1.5% 14.0% 69%
Figure 1: MINT’s 2Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Other extraordinary items Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt)
2Q16 12,029 6,871 1,418 (386) 599 (102) 136 30 732 596 0.17 57.1 11.8 5.0 1.3 1.3 1.2 8.0 2.0
Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt / equity (x) BVPS (Bt) ROE (%)
1Q17 14,644 8,700 2,988 (403) 511 (297) 0 224 1,924 1,924 0.44 59.4 20.4 13.1 0.9 4.9 1.1 8.8 5.0
2Q17 12,528 7,478 1,385 (463) 692 3 0 135 737 737 0.17 59.7 11.1 5.9 0.8 0.9 1.2 8.5 1.9
% YoY 4.1 8.8 (2.3) 20.0 15.6 (102.7) n.m. 344.4 0.7 23.7 0.5
% QoQ (14.5) (14.0) (53.6) 14.9 35.5 (100.9) n.m. (39.5) (61.7) (61.7) (61.7)
6M17 27,172 16,178 4,373 (866) 1,203 (294) 0 359 2,661 2,661 0.60 59.5 16.1 9.8 0.8 2.7 1.2 8.5 1.9
% YoY 7.9 10.7 8.9 9.4 2.2 (26.5) n.m. 68.0 (38.2) 18.9 (38.3)
2017E 55,196 32,864 9,979 (1,729) 2,664 (1,230) 0 600 5,347 5,347 1.21 59.5 18.1 9.7 1.1 3.1 1.0 9.3 13.6
% YoY 7.9 11.8 27.0 7.6 (6.7) 19.2 n.m. 1.4 (18.9) 16.9 (18.9)
YTD (% 17E) 49.2 49.2 43.8 50.1 45.2 23.9 n.m. 59.9 49.8 49.8 49.8
Sources: MINT, KT Zmico Research Figure 3: MINT’s PBV band
Figure 2: MINT’s PER band (X)
(X) 6.0
45 40
+2 S.D.
35 30
+1 S.D. 4.0
Avg.
25
15
Avg.
3.0
-1 S.D.
20
+2 S.D.
5.0
+1 S.D.
-1 S.D.
2.0
-2 S.D.
10
-2 S.D.
1.0
5
Source: Bloomberg, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-17
Jan-16
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Source: Bloomberg, KT Zmico Research
Jan-07
0.0
0
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 Gain (loss) from affiliates Extra items Non‐controlling interest Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories Investment 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 Non‐cash adjustment 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 37,228 (15,321) 21,907 (18,422) 6,372 (2,887) 3,485 (1,145) 1,584 3,924 (397) 823 152 (100) 4,402 1.00 1.00 4,250 0.97 0.25
2015 42,432 (17,829) 24,603 (21,473) 6,254 (3,124) 3,129 (1,301) 2,127 3,956 (411) 1,254 2,336 (94) 7,040 1.60 1.60 4,704 1.07 0.35
2016 51,152 (21,761) 29,390 (25,765) 7,501 (3,875) 3,626 (1,606) 3,215 5,235 (1,032) 592 2,014 (219) 6,590 1.50 1.49 4,576 1.04 0.35
2017E 55,196 (22,332) 32,864 (27,718) 9,823 (4,677) 5,146 (1,729) 2,664 6,082 (1,199) 600 0 (255) 5,228 1.19 1.19 5,228 1.19 0.47
2014 5,372 3,326 1,942 8,123 39,814 15,703 74,279 6,620 27,461 44,255 4,202 30,024 74,279
2015 4,003 4,960 2,414 10,162 53,002 21,196 95,737 4,101 41,373 59,822 4,642 35,915 95,737
2016 4,399 5,059 2,763 9,511 70,090 16,632 108,453 7,821 42,010 67,656 4,622 40,797 108,453
2017E 4,159 5,459 2,981 11,004 72,413 16,869 112,886 3,787 46,061 68,147 4,622 44,736 112,882
2014 4,502 (1,308) 2,887 (693) 5,388 (13,798) 386 (13,412) 11,400 1 (1,401) 26 10,027 2,003 (8,024) (2.01)
2015 7,134 (3,353) 3,124 (3,659) 3,247 (12,821) (1,105) (13,926) 10,147 22 (1,001) 125 9,294 (1,386) (10,679) (2.43)
2016 6,809 (3,180) 3,875 (363) 7,141 (9,472) (346) (9,818) 4,459 293 (1,540) (209) 3,003 326 (2,677) (0.61)
2017E 5,483 (600) 4,677 (382) 9,178 (8,000) 109 (7,891) 16 0 (1,544) 0 (1,527) (240) 1,287 0.29
2014 7.4% 4.2% ‐0.1% 58.8% 17.1% 9.4% 11.8% 11.4% 10.1%
2015 14.0% ‐1.9% 10.7% 58.0% 14.7% 7.4% 16.6% 11.1% 10.4%
2016 20.5% 19.9% ‐2.8% 57.5% 14.7% 7.1% 12.9% 8.9% 19.7%
2017E 7.9% 31.0% 14.2% 59.5% 17.8% 9.3% 9.5% 9.5% 19.7%
2018E 60,563 (24,775) 35,788 (29,802) 11,102 (5,116) 5,986 (1,784) 2,885 7,087 (1,397) 628 0 (297) 6,021 1.37 1.37 6,021 1.37 0.55
2018E 5,843 5,990 3,271 12,521 72,297 17,057 116,978 6,013 42,556 68,013 4,622 48,962 116,975
2019E 63,468 (25,970) 37,497 (30,913) 11,942 (5,357) 6,585 (1,745) 3,008 7,849 (1,547) 606 0 (329) 6,579 1.49 1.49 6,579 1.49 0.60 2019E 8,613 6,277 3,428 14,011 69,940 16,895 119,164 13,022 32,543 65,699 4,622 53,462 119,161
2018E 6,318 (628) 5,116 136 10,942 (6,000) 111 (5,889) (1,278) 0 (2,091) 0 (3,370) 1,684 5,053 1.15
2019E 6,908 (606) 5,357 409 12,068 (4,000) 116 (3,884) (3,005) 0 (2,408) 0 (5,413) 2,770 8,184 1.86
2018E 9.7% 13.0% 15.2% 59.1% 18.3% 9.9% 9.9% 9.9% 19.7%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2019E 4.8% 7.6% 9.3% 59.1% 18.8% 10.4% 10.4% 10.4% 19.7%
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.
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 returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. 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
