Buy (17E TP Bt26.00) Company Update
SPCG Company Update
Buy (17E TP Bt26.00) Close Bt22.50
Energy & Utilities February 28, 2017
Earnings upgrade/Earnings downgrade/Overview unchanged
4Q16 profit hit a new high Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
2.835
2.998
KT ZMICO vs. consensus Share data
‐4.4%
‐5.6%
Reuters / Bloomberg
SPCG.BK/SPCG TB
Paid‐up Shares (m)
923.99
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
21.00/596.00
Foreign limit / actual (%)
49.00/20.26
52 week High / Low (Bt)
23.00/18.70
Avg. daily T/O (shares 000) NVDR (%)
1,600.00 2.02
Estimated free float (%)
39.53
Beta
0.64
URL
www.spcg.co.th
CGR
Anti‐corruption
n.a.
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6289
A very good development on solar rooftop business 16 profit missed our forecast by 8.5% due to underestimating interest expenses. However, 4Q16 profit hit a new high at Bt630mn, +29%YoY and 25%QoQ. The key catalyst was the solar rooftop business, which surged 214%YoY and 488%QoQ from installation service. SPCG will pay a dividend of Bt0.70/share for the 2H16 performance, resulting in a total dividend of Bt1.10/share or a 4.9% yield, which is the highest among peers. Buy rating stands. Lower energy output and electricity price Energy output in 4Q16 dropped 2.7%YoY on unfavorable weather conditions and degradation. The electricity selling price decreased 9.1%YoY, continuing its downward trend amid the low oil price environment. Revenue from solar farms for the quarter declined 5.3%YoY. Good sign for solar rooftop business In 4Q16, SPCG had total revenue from the solar rooftop business of Bt685mn, +214%YoY and +488%QoQ. Total revenue consisted of Bt39mn from the sale of goods and Bt645mn from installation services. SPCG’s management expected strong business volume for installation of solar rooftops in Q4 since it is approaching the deadline for the government benefits for industrial solar rooftops. We view that this is just the starting point for solar rooftops in Thailand and anticipate the regulators to promote them further in the coming years. Lower dividend payment but still the best among peers SPCG will pay a dividend of Bt0.70/share from the 2H16 performance. The total dividend is Bt1.10/share, implying a yield of 4.9%. The total dividend per share decreases from Bt1.25 in 15 but is still the best among renewable energy peers. Buy rating stands The current stock price implies 17E PER at 8.3x, the lowest in the renewable energy sector. There are still catalysts from the solar rooftop business that we have not factored in as well as new solar farm projects under development. We maintain our 17E TP at Bt26.00. Buy rating stands. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 4,357 1,656 1.79 231.6% 0.85 6.26 2014 12.56 9.52 3.59 3.8% 39.3% 214%
2015 5,000 2,190 2.37 32.3% 1.25 7.76 2015 9.49 8.28 2.90 5.6% 33.8% 143%
2016 5,448 2,314 2.50 5.7% 1.10 8.98 2016 8.98 8.19 2.51 4.9% 29.9% 102%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 5,051 2,507 2.71 8.3% 1.15 10.57 2017E 8.29 7.99 2.13 5.1% 27.8% 66%
2018E 5,073 2,619 2.83 4.5% 1.20 12.24 2018E 7.94 7.98 1.84 5.3% 24.8% 39%
Figure 1: SPCG’s 4Q16 earnings result Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt / equity (x) BVPS (Bt) ROE (%)
4Q15 1,287 953 916 (214) 9 (8) (0) 488 488 0.53 74.1 71.2 37.9 1.8 3.5 1.4 7.8 27.4
3Q16 1,227 802 909 (189) 14 (2) (0) 503 503 0.54 65.3 74.0 41.0 1.9 4.0 1.2 9.9 26.3
4Q16 1,793 920 1,012 (176) 44 (11) 0 630 630 0.68 51.3 56.4 35.1 1.3 4.8 1.0 10.6 31.5
% YoY 39.3 (3.4) 10.4 (17.6) 372.2 39.6 n.a. 29.0 29.0 28.7
% QoQ 46.1 14.8 11.4 (6.6) 210.0 537.0 n.a. 25.1 25.1 24.7
2015 5,000 3,641 3,878 (898) 58 72 (1) 2,190 2,190 2.37 72.8 77.6 43.8 1.8 3.6 1.4 7.8 33.8
2016 5,448 3,528 3,921 (745) 96 (9) (1) 2,314 2,314 2.50 64.8 72.0 42.5 1.3 4.4 1.0 9.0 29.9
%YoY 9.0 (3.1) 1.1 (17.0) 67.1 (113.2) n.a. 5.7 5.7 5.7
Sources: SPCG, KT Zmico Research
Figure 2: SPCG’s PER band
Figure 3: SPCG’s PBV band
(X)
(X)
18
6.0
16 +2 S.D.
14 12
5.0 +1 S.D.
10
4.0
+0.5 S.D.
8 6
Avg. -0.5 S.D.
3.0
-1 S.D.
2.0
-2 S.D.
1.0
+2 S.D. +1 S.D. +0.5 S.D. Avg. -0.5 S.D. -1 S.D.
4
Source: Bloomberg, KT Zmico Research
Source: Bloomberg, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Jan-17
Oct-16
Jul-16
Apr-16
Jan-16
Oct-15
Jul-15
Apr-15
Jan-15
Oct-14
Jul-14
0.0 Apr-14
Jan-17
Oct-16
Jul-16
Apr-16
Jan-16
Oct-15
Jul-15
Apr-15
Jan-15
Oct-14
Jul-14
Apr-14
Jan-14
0
Jan-14
2
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 FX gain (loss) 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 (%)
2013 2,473 (806) 1,667 (403) 1,610 (347) 1,263 (605) 42 700 (64) 19 (10) (145) 499 0.54 499 0.54 0.00
2014 4,357 (1,167) 3,190 (384) 3,373 (566) 2,806 (979) 30 1,858 10 (1) 23 (234) 1,656 1.79 1,656 1.79 0.85
2015 5,000 (1,359) 3,641 (406) 3,878 (643) 3,235 (898) 58 2,394 72 (1) 0 (275) 2,190 2.37 2,190 2.37 1.25
2016 5,448 (1,920) 3,528 (252) 3,921 (644) 3,277 (745) 96 2,628 (9) (1) 0 (303) 2,314 2.50 2,314 2.50 1.10
2013 289 621 667 5 19,022 1,897 22,501 1,485 15,161 18,988 840 3,513 22,501
2014 2,834 1,022 428 4 18,887 2,396 25,571 2,473 15,542 18,470 924 7,100 25,571
2015 3,710 941 216 472 18,434 964 24,736 2,476 13,321 16,265 924 8,470 24,736
2016 3,360 972 581 471 17,865 983 24,232 2,706 10,615 14,466 924 9,766 24,232
2013 644 (0) 347 88 1,079 (8,427) (178) (8,605) 7,452 280 0 10 7,743 216 (7,526) (8.15)
2014 1,890 22 566 (895) 1,583 (6,397) 4,464 (1,933) 1,258 1,842 (370) 165 2,896 2,546 (350) (0.38)
2015 2,465 1 643 302 3,411 (220) 145 (75) (2,236) 0 (822) (290) (3,348) (12) 3,336 3.61
2016 2,617 (45) 644 352 3,568 (91) 789 698 (2,483) 0 (1,229) (170) (3,882) 384 4,266 4.62
2013 103.6% 197.0% 823.5% 67.4% 65.1% 51.1% 20.2% 20.2% 9.2%
2014 76.2% 109.4% 231.6% 73.2% 77.4% 64.4% 38.0% 38.0% ‐0.5%
2015 14.8% 15.0% 32.3% 72.8% 77.6% 64.7% 43.8% 43.8% ‐3.0%
2016 9.0% 1.1% 5.7% 64.8% 72.0% 60.1% 42.5% 42.5% 0.4%
2017E 4,985 (1,330) 3,655 (298) 4,019 (662) 3,357 (483) 30 2,904 (1) 55 0 (327) 2,631 2.85 2,631 2.85 1.35
2017E 3,607 819 225 472 17,170 968 23,261 2,952 8,253 11,673 924 11,588 23,261
2018E 5,006 (1,342) 3,664 (303) 4,024 (662) 3,362 (388) 30 3,004 (10) 55 0 (342) 2,707 2.93 2,707 2.93 1.40 2018E 2,908 823 229 472 16,539 971 21,942 2,952 5,303 8,723 924 13,218 21,942
2017E 2,958 (55) 662 (8) 3,556 (30) 55 25 (2,480) 0 (1,366) 0 (3,846) (265) 3,581 3.88
2018E 3,049 (55) 662 (11) 3,645 (30) 55 25 (2,950) 0 (1,419) 0 (4,369) (699) 3,670 3.97
2017E 0.2% ‐0.2% 4.0% 73.3% 80.6% 67.3% 52.8% 52.8% 0.1%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2018E 0.4% 0.1% 2.9% 73.2% 80.4% 67.2% 54.1% 54.1% 0.3%
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. KT ZMICO is a co underwriter of RPH.
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
Buy (17E TP Bt26.00) Close Bt22.50
Energy & Utilities February 28, 2017
Earnings upgrade/Earnings downgrade/Overview unchanged
4Q16 profit hit a new high Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
2.835
2.998
KT ZMICO vs. consensus Share data
‐4.4%
‐5.6%
Reuters / Bloomberg
SPCG.BK/SPCG TB
Paid‐up Shares (m)
923.99
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
21.00/596.00
Foreign limit / actual (%)
49.00/20.26
52 week High / Low (Bt)
23.00/18.70
Avg. daily T/O (shares 000) NVDR (%)
1,600.00 2.02
Estimated free float (%)
39.53
Beta
0.64
URL
www.spcg.co.th
CGR
Anti‐corruption
n.a.
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6289
A very good development on solar rooftop business 16 profit missed our forecast by 8.5% due to underestimating interest expenses. However, 4Q16 profit hit a new high at Bt630mn, +29%YoY and 25%QoQ. The key catalyst was the solar rooftop business, which surged 214%YoY and 488%QoQ from installation service. SPCG will pay a dividend of Bt0.70/share for the 2H16 performance, resulting in a total dividend of Bt1.10/share or a 4.9% yield, which is the highest among peers. Buy rating stands. Lower energy output and electricity price Energy output in 4Q16 dropped 2.7%YoY on unfavorable weather conditions and degradation. The electricity selling price decreased 9.1%YoY, continuing its downward trend amid the low oil price environment. Revenue from solar farms for the quarter declined 5.3%YoY. Good sign for solar rooftop business In 4Q16, SPCG had total revenue from the solar rooftop business of Bt685mn, +214%YoY and +488%QoQ. Total revenue consisted of Bt39mn from the sale of goods and Bt645mn from installation services. SPCG’s management expected strong business volume for installation of solar rooftops in Q4 since it is approaching the deadline for the government benefits for industrial solar rooftops. We view that this is just the starting point for solar rooftops in Thailand and anticipate the regulators to promote them further in the coming years. Lower dividend payment but still the best among peers SPCG will pay a dividend of Bt0.70/share from the 2H16 performance. The total dividend is Bt1.10/share, implying a yield of 4.9%. The total dividend per share decreases from Bt1.25 in 15 but is still the best among renewable energy peers. Buy rating stands The current stock price implies 17E PER at 8.3x, the lowest in the renewable energy sector. There are still catalysts from the solar rooftop business that we have not factored in as well as new solar farm projects under development. We maintain our 17E TP at Bt26.00. Buy rating stands. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 4,357 1,656 1.79 231.6% 0.85 6.26 2014 12.56 9.52 3.59 3.8% 39.3% 214%
2015 5,000 2,190 2.37 32.3% 1.25 7.76 2015 9.49 8.28 2.90 5.6% 33.8% 143%
2016 5,448 2,314 2.50 5.7% 1.10 8.98 2016 8.98 8.19 2.51 4.9% 29.9% 102%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 5,051 2,507 2.71 8.3% 1.15 10.57 2017E 8.29 7.99 2.13 5.1% 27.8% 66%
2018E 5,073 2,619 2.83 4.5% 1.20 12.24 2018E 7.94 7.98 1.84 5.3% 24.8% 39%
Figure 1: SPCG’s 4Q16 earnings result Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt / equity (x) BVPS (Bt) ROE (%)
4Q15 1,287 953 916 (214) 9 (8) (0) 488 488 0.53 74.1 71.2 37.9 1.8 3.5 1.4 7.8 27.4
3Q16 1,227 802 909 (189) 14 (2) (0) 503 503 0.54 65.3 74.0 41.0 1.9 4.0 1.2 9.9 26.3
4Q16 1,793 920 1,012 (176) 44 (11) 0 630 630 0.68 51.3 56.4 35.1 1.3 4.8 1.0 10.6 31.5
% YoY 39.3 (3.4) 10.4 (17.6) 372.2 39.6 n.a. 29.0 29.0 28.7
% QoQ 46.1 14.8 11.4 (6.6) 210.0 537.0 n.a. 25.1 25.1 24.7
2015 5,000 3,641 3,878 (898) 58 72 (1) 2,190 2,190 2.37 72.8 77.6 43.8 1.8 3.6 1.4 7.8 33.8
2016 5,448 3,528 3,921 (745) 96 (9) (1) 2,314 2,314 2.50 64.8 72.0 42.5 1.3 4.4 1.0 9.0 29.9
%YoY 9.0 (3.1) 1.1 (17.0) 67.1 (113.2) n.a. 5.7 5.7 5.7
Sources: SPCG, KT Zmico Research
Figure 2: SPCG’s PER band
Figure 3: SPCG’s PBV band
(X)
(X)
18
6.0
16 +2 S.D.
14 12
5.0 +1 S.D.
10
4.0
+0.5 S.D.
8 6
Avg. -0.5 S.D.
3.0
-1 S.D.
2.0
-2 S.D.
1.0
+2 S.D. +1 S.D. +0.5 S.D. Avg. -0.5 S.D. -1 S.D.
4
Source: Bloomberg, KT Zmico Research
Source: Bloomberg, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Jan-17
Oct-16
Jul-16
Apr-16
Jan-16
Oct-15
Jul-15
Apr-15
Jan-15
Oct-14
Jul-14
0.0 Apr-14
Jan-17
Oct-16
Jul-16
Apr-16
Jan-16
Oct-15
Jul-15
Apr-15
Jan-15
Oct-14
Jul-14
Apr-14
Jan-14
0
Jan-14
2
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 FX gain (loss) 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 (%)
2013 2,473 (806) 1,667 (403) 1,610 (347) 1,263 (605) 42 700 (64) 19 (10) (145) 499 0.54 499 0.54 0.00
2014 4,357 (1,167) 3,190 (384) 3,373 (566) 2,806 (979) 30 1,858 10 (1) 23 (234) 1,656 1.79 1,656 1.79 0.85
2015 5,000 (1,359) 3,641 (406) 3,878 (643) 3,235 (898) 58 2,394 72 (1) 0 (275) 2,190 2.37 2,190 2.37 1.25
2016 5,448 (1,920) 3,528 (252) 3,921 (644) 3,277 (745) 96 2,628 (9) (1) 0 (303) 2,314 2.50 2,314 2.50 1.10
2013 289 621 667 5 19,022 1,897 22,501 1,485 15,161 18,988 840 3,513 22,501
2014 2,834 1,022 428 4 18,887 2,396 25,571 2,473 15,542 18,470 924 7,100 25,571
2015 3,710 941 216 472 18,434 964 24,736 2,476 13,321 16,265 924 8,470 24,736
2016 3,360 972 581 471 17,865 983 24,232 2,706 10,615 14,466 924 9,766 24,232
2013 644 (0) 347 88 1,079 (8,427) (178) (8,605) 7,452 280 0 10 7,743 216 (7,526) (8.15)
2014 1,890 22 566 (895) 1,583 (6,397) 4,464 (1,933) 1,258 1,842 (370) 165 2,896 2,546 (350) (0.38)
2015 2,465 1 643 302 3,411 (220) 145 (75) (2,236) 0 (822) (290) (3,348) (12) 3,336 3.61
2016 2,617 (45) 644 352 3,568 (91) 789 698 (2,483) 0 (1,229) (170) (3,882) 384 4,266 4.62
2013 103.6% 197.0% 823.5% 67.4% 65.1% 51.1% 20.2% 20.2% 9.2%
2014 76.2% 109.4% 231.6% 73.2% 77.4% 64.4% 38.0% 38.0% ‐0.5%
2015 14.8% 15.0% 32.3% 72.8% 77.6% 64.7% 43.8% 43.8% ‐3.0%
2016 9.0% 1.1% 5.7% 64.8% 72.0% 60.1% 42.5% 42.5% 0.4%
2017E 4,985 (1,330) 3,655 (298) 4,019 (662) 3,357 (483) 30 2,904 (1) 55 0 (327) 2,631 2.85 2,631 2.85 1.35
2017E 3,607 819 225 472 17,170 968 23,261 2,952 8,253 11,673 924 11,588 23,261
2018E 5,006 (1,342) 3,664 (303) 4,024 (662) 3,362 (388) 30 3,004 (10) 55 0 (342) 2,707 2.93 2,707 2.93 1.40 2018E 2,908 823 229 472 16,539 971 21,942 2,952 5,303 8,723 924 13,218 21,942
2017E 2,958 (55) 662 (8) 3,556 (30) 55 25 (2,480) 0 (1,366) 0 (3,846) (265) 3,581 3.88
2018E 3,049 (55) 662 (11) 3,645 (30) 55 25 (2,950) 0 (1,419) 0 (4,369) (699) 3,670 3.97
2017E 0.2% ‐0.2% 4.0% 73.3% 80.6% 67.3% 52.8% 52.8% 0.1%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2018E 0.4% 0.1% 2.9% 73.2% 80.4% 67.2% 54.1% 54.1% 0.3%
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. KT ZMICO is a co underwriter of RPH.
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
