Brighter earnings prospects ahead of the hot ...
Masterkool International Outperform (17E TP Bt8.00)
Company Update
Close Bt7.10
MAI‐ Services
Earnings upgrade/Earnings downgrade/Overview unchanged
March 21, 2017
Brighter earnings prospects ahead of the hot season Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.280
0.360
KT ZMICO vs. consensus Share data
‐7.1%
2.8%
Reuters / Bloomberg
KOOL.BK/KOOL TB
Paid‐up Shares (m)
480.00
Par (Bt)
0.25
Market cap (Bt bn / US$ m)
3.00/98.00
Foreign limit / actual (%)
49.00/14.73
52 week High / Low (Bt)
8.80/1.37
Avg. daily T/O (shares 000)
12,005.00
NVDR (%)
0.40
Estimated free float (%)
38.12
Beta
3.25
URL
www.masterkool.com
CGR Anti‐corruption
n.a.
Ruchanon Chiemkarnkit Analyst, no. 057859 [email protected] 66 (0) 2624‐6268
Rating upgraded to “Outperform”; new target price of Bt8/share We have upgraded our rating for KOOL to “Outperform” (from “Sell”), with the 2017E target price raised to Bt8/share, based on PER+1SD at 31x. We have revised up our 2017‐19 earnings projections by 3‐4% to reflect larger‐ than‐expected expansion of the modern trade sales network and greater export volume. Our revised forecasts call for KOOL’s 2017‐19E earnings to achieve a 35% CAGR. Finally, we expect positive sentiment for KOOL’s earnings in 1Q‐2Q17, i.e., the peak season for sales of cooling fans. 2017E revenue growth to hold up well KOOL targets 2017E sales growth of 40% given an increase in all sales channels, especially through modern trade after the successful penetration of Big C and Tesco Lotus. Hence, the number of sales points has increased to 480 currently, with the number expected to rise to 520 sales points in 2Q17 vs. 240 in 2Q16. The firm will spend a marketing budget of Bt30mn for marketing activities at sales points and promotional campaigns in order to boost sales during the summer (i.e., 2Q17), which is the high season for sales of cooling fans. Moreover, in Jun‐17 the firm will launch new product items in the electrical appliance line in order to boost revenue in the latter part of the year, which is the low season for sales of cooling fans. More room for export growth KOOL is going ahead with its plan to expand its overseas sales, with an export target at 25% of total sales in 2017 vs. 24% currently. The major export markets will remain CLMV countries. This year, the firm will focus on expansion of sales channels and the development of sales teams. We believe the firm will be able to achieve its target given huge room for export markets, peoples’ growing purchasing power, highly efficient sales representatives, good quality products and reasonable prices. We thus expect export sales growth of Bt312mn, up 44%. 2017‐19E earnings revised up by 3‐4% We have revised up our 2017‐19E earnings projections by 3‐4% to reflect: i) 9‐15% upward revisions made to the revenue assumptions to reflect greater‐than‐expected expansion of the distribution network in modern trade and export markets; ii) lower gross profit margin assumptions by 6‐ 11% to reflect larger revenue earned from the modern trade sales channel and exports (i.e., the profit margin earned by revenue from these channels is narrower than the average); and iii) reductions in SG&A assumptions by 6‐ 7% to reflect better management of sales representatives. Therefore, 2017‐ 19E earnings growth is expected to achieve 35% CAGR. Given the bright earnings outlook, we believe it is justified to rerate PER to 31x (+1SD) vs. 23x. Therefore, we have a new target price of Bt8/share. Financials and Valuation FY Ended 31 Dec Revenues (Bt mn) Net profit (Bt mn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net Gearing (%)
2015 636 21 0.04 ‐46% 21 ‐46% 2015 158.9 96.8 10.4 0.3% 9.9% ‐4%
2016 882 87 0.18 306% 87 306% 2016 39.2 30.1 8.8 1.1% 24.3% ‐24%
2017E 1,233 127 0.26 46% 127 46% 2017E 26.8 21.0 7.4 1.6% 29.8% ‐19%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 1,694 176 0.37 38% 176 38% 2018E 19.4 15.2 6.0 2.2% 34.2% ‐18%
2019E 2,212 232 0.48 32% 232 32% 2019E 14.7 11.5 4.9 2.9% 36.6% ‐20%
Figure 1: Key Assumption Changes List Revenue (Btmn) GPM % SG&A to sales (%)
Net profit (Btmn) NPM (%)
New 1,233
2017E Old %Change 9.1% 1,130
1,694
1,487
13.9%
2,212
1,920
15.2%
34.2%
36.5%
33.9%
37.7%
33.4%
37.8%
22.3%
23.7% 123 10.9%
21.7% 176 10.4%
23.2% 170 11.4%
3.5%
21% 232 10.5%
22.5% 223 11.6%
4.0%
127 10.3%
3.2%
New
2018E Old %Change
2019E Old %Change
New
Source: KT ZMICO Research Figure 2: PER and PBV band (X)
(X)
60
14.0
+2.0 S.D.
10.0
+1.0 S.D.
8.0
+1.0 S.D.
6.0
Avg.
+2.0 S.D.
Avg.
20
4.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Mar-17
Jan-17
Source: Bloomberg, KT ZMICO Research
Feb-17
Dec-16
Oct-16
Nov-16
Oct-16
Sep-16
Jul-16
Aug-16
Jun-16
Mar-17
Jan-17
Feb-17
Dec-16
Oct-16
Nov-16
Oct-16
Sep-16
Jul-16
Aug-16
Jun-16
Jun-16
Apr-16
May-16
Mar-16
Jan-16
Feb-16
Jan-16
Mar-16
0.0
0
Jun-16
-1.0 S.D.
Apr-16
2.0
May-16
-1.0 S.D.
10
Jan-16
30
12.0
Feb-16
40
+3.0 S.D.
+3.0 S.D.
Jan-16
50
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 Net profit Reported 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
2015
2016
2017E
2018E
2019E
459 (260) 199 (151) 56 8 48 (6) 5 47 (7) ‐ ‐ ‐ 40 0.08 40 0.08 ‐
636 (373) 263 (238) 34 9 25 (8) 4 22 (0) ‐ ‐ ‐ 21 0.04 21 0.04 0.02
882 (571) 311 (210) 110 10 101 (2) 8 107 (20) ‐ ‐ ‐ 87 0.18 87 0.18 0.08
1,233 (811) 422 (275) 158 11 147 (0) 10 157 (30) ‐ ‐ ‐ 127 0.26 127 0.26 0.11
1,694 (1,120) 574 (368) 218 12 207 (0) 11 217 (41) ‐ ‐ ‐ 176 0.37 176 0.37 0.15
2,212 (1,473) 739 (465) 288 13 275 (0) 11 286 (54) ‐ ‐ ‐ 232 0.48 232 0.48 0.20
2014
2015
2016
2017E
2018E
2019E
1 54 172 41 38 14 320 135 3 211 90 109 320
104 84 231 49 58 21 547 86 4 221 120 326 547
103 127 184 59 55 40 568 4 5 179 120 389 568
98 149 289 59 54 40 688 4 5 225 120 463 688
112 204 399 59 52 40 867 4 5 302 120 565 867
148 267 525 59 49 40 1,088 4 5 389 120 699 1,088
2014
2015
2016
2017E
2018E
2019E
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
8 9 9 (52) (25) (20) (7) (26) (54) 30 ‐ 178 154 103 (51) (0.43)
107 (1) 10 1 117 (6) (6) (12) (87) ‐ (24) ‐ (111) (6) 105 0.88
127 ‐ 11 (80) 58 (10) ‐ (10) ‐ ‐ (53) ‐ (53) (5) 48 0.40
176 ‐ 12 (89) 98 (10) ‐ (10) ‐ ‐ (74) ‐ (74) 15 88 0.74
232 ‐ 13 (101) 143 (10) ‐ (10) ‐ ‐ (97) ‐ (97) 36 133 1.11
2014
2015
2016
2017E
2018E
2019E
50.2% 182.6% 252.3% 43.3% 12.1% 10.4% 8.6% 8.6% 15.1%
38.8% ‐38.5% ‐45.9% 41.4% 5.4% 3.9% 3.4% 3.4% 1.8%
38.5% 222.0% 305.7% 35.3% 12.5% 11.4% 9.9% 9.9% 18.7%
39.8% 43.1% 46.1% 34.2% 12.8% 11.9% 10.3% 10.3% 19.0%
37.4% 38.5% 38.4% 33.9% 12.9% 12.2% 10.4% 10.4% 19.0%
30.6% 31.6% 31.6% 33.4% 13.0% 12.4% 10.5% 10.5% 19.0%
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, 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 Bt7.10
MAI‐ Services
Earnings upgrade/Earnings downgrade/Overview unchanged
March 21, 2017
Brighter earnings prospects ahead of the hot season Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.280
0.360
KT ZMICO vs. consensus Share data
‐7.1%
2.8%
Reuters / Bloomberg
KOOL.BK/KOOL TB
Paid‐up Shares (m)
480.00
Par (Bt)
0.25
Market cap (Bt bn / US$ m)
3.00/98.00
Foreign limit / actual (%)
49.00/14.73
52 week High / Low (Bt)
8.80/1.37
Avg. daily T/O (shares 000)
12,005.00
NVDR (%)
0.40
Estimated free float (%)
38.12
Beta
3.25
URL
www.masterkool.com
CGR Anti‐corruption
n.a.
Ruchanon Chiemkarnkit Analyst, no. 057859 [email protected] 66 (0) 2624‐6268
Rating upgraded to “Outperform”; new target price of Bt8/share We have upgraded our rating for KOOL to “Outperform” (from “Sell”), with the 2017E target price raised to Bt8/share, based on PER+1SD at 31x. We have revised up our 2017‐19 earnings projections by 3‐4% to reflect larger‐ than‐expected expansion of the modern trade sales network and greater export volume. Our revised forecasts call for KOOL’s 2017‐19E earnings to achieve a 35% CAGR. Finally, we expect positive sentiment for KOOL’s earnings in 1Q‐2Q17, i.e., the peak season for sales of cooling fans. 2017E revenue growth to hold up well KOOL targets 2017E sales growth of 40% given an increase in all sales channels, especially through modern trade after the successful penetration of Big C and Tesco Lotus. Hence, the number of sales points has increased to 480 currently, with the number expected to rise to 520 sales points in 2Q17 vs. 240 in 2Q16. The firm will spend a marketing budget of Bt30mn for marketing activities at sales points and promotional campaigns in order to boost sales during the summer (i.e., 2Q17), which is the high season for sales of cooling fans. Moreover, in Jun‐17 the firm will launch new product items in the electrical appliance line in order to boost revenue in the latter part of the year, which is the low season for sales of cooling fans. More room for export growth KOOL is going ahead with its plan to expand its overseas sales, with an export target at 25% of total sales in 2017 vs. 24% currently. The major export markets will remain CLMV countries. This year, the firm will focus on expansion of sales channels and the development of sales teams. We believe the firm will be able to achieve its target given huge room for export markets, peoples’ growing purchasing power, highly efficient sales representatives, good quality products and reasonable prices. We thus expect export sales growth of Bt312mn, up 44%. 2017‐19E earnings revised up by 3‐4% We have revised up our 2017‐19E earnings projections by 3‐4% to reflect: i) 9‐15% upward revisions made to the revenue assumptions to reflect greater‐than‐expected expansion of the distribution network in modern trade and export markets; ii) lower gross profit margin assumptions by 6‐ 11% to reflect larger revenue earned from the modern trade sales channel and exports (i.e., the profit margin earned by revenue from these channels is narrower than the average); and iii) reductions in SG&A assumptions by 6‐ 7% to reflect better management of sales representatives. Therefore, 2017‐ 19E earnings growth is expected to achieve 35% CAGR. Given the bright earnings outlook, we believe it is justified to rerate PER to 31x (+1SD) vs. 23x. Therefore, we have a new target price of Bt8/share. Financials and Valuation FY Ended 31 Dec Revenues (Bt mn) Net profit (Bt mn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net Gearing (%)
2015 636 21 0.04 ‐46% 21 ‐46% 2015 158.9 96.8 10.4 0.3% 9.9% ‐4%
2016 882 87 0.18 306% 87 306% 2016 39.2 30.1 8.8 1.1% 24.3% ‐24%
2017E 1,233 127 0.26 46% 127 46% 2017E 26.8 21.0 7.4 1.6% 29.8% ‐19%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 1,694 176 0.37 38% 176 38% 2018E 19.4 15.2 6.0 2.2% 34.2% ‐18%
2019E 2,212 232 0.48 32% 232 32% 2019E 14.7 11.5 4.9 2.9% 36.6% ‐20%
Figure 1: Key Assumption Changes List Revenue (Btmn) GPM % SG&A to sales (%)
Net profit (Btmn) NPM (%)
New 1,233
2017E Old %Change 9.1% 1,130
1,694
1,487
13.9%
2,212
1,920
15.2%
34.2%
36.5%
33.9%
37.7%
33.4%
37.8%
22.3%
23.7% 123 10.9%
21.7% 176 10.4%
23.2% 170 11.4%
3.5%
21% 232 10.5%
22.5% 223 11.6%
4.0%
127 10.3%
3.2%
New
2018E Old %Change
2019E Old %Change
New
Source: KT ZMICO Research Figure 2: PER and PBV band (X)
(X)
60
14.0
+2.0 S.D.
10.0
+1.0 S.D.
8.0
+1.0 S.D.
6.0
Avg.
+2.0 S.D.
Avg.
20
4.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Mar-17
Jan-17
Source: Bloomberg, KT ZMICO Research
Feb-17
Dec-16
Oct-16
Nov-16
Oct-16
Sep-16
Jul-16
Aug-16
Jun-16
Mar-17
Jan-17
Feb-17
Dec-16
Oct-16
Nov-16
Oct-16
Sep-16
Jul-16
Aug-16
Jun-16
Jun-16
Apr-16
May-16
Mar-16
Jan-16
Feb-16
Jan-16
Mar-16
0.0
0
Jun-16
-1.0 S.D.
Apr-16
2.0
May-16
-1.0 S.D.
10
Jan-16
30
12.0
Feb-16
40
+3.0 S.D.
+3.0 S.D.
Jan-16
50
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 Net profit Reported 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
2015
2016
2017E
2018E
2019E
459 (260) 199 (151) 56 8 48 (6) 5 47 (7) ‐ ‐ ‐ 40 0.08 40 0.08 ‐
636 (373) 263 (238) 34 9 25 (8) 4 22 (0) ‐ ‐ ‐ 21 0.04 21 0.04 0.02
882 (571) 311 (210) 110 10 101 (2) 8 107 (20) ‐ ‐ ‐ 87 0.18 87 0.18 0.08
1,233 (811) 422 (275) 158 11 147 (0) 10 157 (30) ‐ ‐ ‐ 127 0.26 127 0.26 0.11
1,694 (1,120) 574 (368) 218 12 207 (0) 11 217 (41) ‐ ‐ ‐ 176 0.37 176 0.37 0.15
2,212 (1,473) 739 (465) 288 13 275 (0) 11 286 (54) ‐ ‐ ‐ 232 0.48 232 0.48 0.20
2014
2015
2016
2017E
2018E
2019E
1 54 172 41 38 14 320 135 3 211 90 109 320
104 84 231 49 58 21 547 86 4 221 120 326 547
103 127 184 59 55 40 568 4 5 179 120 389 568
98 149 289 59 54 40 688 4 5 225 120 463 688
112 204 399 59 52 40 867 4 5 302 120 565 867
148 267 525 59 49 40 1,088 4 5 389 120 699 1,088
2014
2015
2016
2017E
2018E
2019E
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
8 9 9 (52) (25) (20) (7) (26) (54) 30 ‐ 178 154 103 (51) (0.43)
107 (1) 10 1 117 (6) (6) (12) (87) ‐ (24) ‐ (111) (6) 105 0.88
127 ‐ 11 (80) 58 (10) ‐ (10) ‐ ‐ (53) ‐ (53) (5) 48 0.40
176 ‐ 12 (89) 98 (10) ‐ (10) ‐ ‐ (74) ‐ (74) 15 88 0.74
232 ‐ 13 (101) 143 (10) ‐ (10) ‐ ‐ (97) ‐ (97) 36 133 1.11
2014
2015
2016
2017E
2018E
2019E
50.2% 182.6% 252.3% 43.3% 12.1% 10.4% 8.6% 8.6% 15.1%
38.8% ‐38.5% ‐45.9% 41.4% 5.4% 3.9% 3.4% 3.4% 1.8%
38.5% 222.0% 305.7% 35.3% 12.5% 11.4% 9.9% 9.9% 18.7%
39.8% 43.1% 46.1% 34.2% 12.8% 11.9% 10.3% 10.3% 19.0%
37.4% 38.5% 38.4% 33.9% 12.9% 12.2% 10.4% 10.4% 19.0%
30.6% 31.6% 31.6% 33.4% 13.0% 12.4% 10.5% 10.5% 19.0%
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, 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
