Continued expansion of production capacity
SVI Buy (17E TP Bt6.40) Close Bt5.65
Company Update
Electronic Components
Earnings upgrade/Earnings downgrade/ Overview unchanged
August 15, 2017
Continued expansion of production capacity Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.355
0.428
KT ZMICO vs. consensus Share data
‐1.4%
0.5%
Reuters / Bloomberg
SVI.BK/SVI TB
Paid‐up Shares (m)
2,265.75
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
13.00/385.00
Foreign limit / actual (%)
100.00/8.71
52 week High / Low (Bt)
6.50/4.22
Avg. daily T/O (shares 000) NVDR (%)
7,547.00 4.89
Estimated free float (%)
45.05
Beta
1.19
URL
www.svi.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Earnings projection and rating are maintained 2Q17 core profit grew YoY but fell QoQ on the back of higher raw material costs and the appreciation of the baht. We expect 2H earnings growth to accelerate on the back of new orders, which are expected to beat the level seen in 1H17. We stand by our current 2017E earnings projection and “Buy” rating, with the DCF‐based target price of Bt6.4/share. Total revenue from SVI still grew well but that from Seidel was flat SVI reported total revenue of Bt3,101mn (US$91mn) in 2Q17, up 6%YoY and 8%QoQ. Over 77% of revenue was contributed by SVI’s business (+11%YoY, +11%QoQ), which grew well thanks to expansions of production capacity to support orders placed by new clients. Meanwhile, Seidel’s business remained stable as the firm was upgrading its plant’s efficiency. NP dropped YoY given a lack of extra items SVI reported 2Q17 NP of Bt125mn, down by 78%YoY and 28%QoQ because in 2Q17 the firm received an insurance claim from the fire at around Bt523mn. Excluding the extra items and forex gain, the firm booked core profit of Bt138mn, up 5%YoY and down 14%QoQ. GPM was limited by high raw material costs and appreciation of the baht 2Q17 core profit fell QoQ on the back of 3% appreciation of the baht (+2.4%YoY) and higher raw material costs, which pushed the GPM down to 8.7% vs. 9.2% in the previous quarter. The core profit increased YoY thanks to revenue growth and a wider GPM vs. 8.4% in 2Q16. 2H earnings to improve HoH We believe the utilization rate will increase to 85‐95% in 2H17 from 80% in 2Q17 on the back of new orders that will increase significantly in 2H17. We maintain our current earnings forecast and a “Buy” rating, with the target price of Bt6.4/share. Financials and Valuation FY Ended 31 Dec Revenues (Bt mn) Net profit (Bt mn) EPS (Bt) EPS growth (%) Norm. profit (Bt mn) Norm. profit growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net Gearing (%)
2015 8,119 2,029 0.90 766% 697 ‐3.0% ‐ 2.51 2015 18.4 13.1 2.3 0.0% 14.9% ‐50%
2016 10,948 1,603 0.71 ‐21% 567 ‐18.6% 0.08 3.13 2016 22.6 14.5 1.8 1.4% 8.9% ‐41%
2017E 13,335 795 0.35 ‐50% 795 40.1% 0.12 3.36 2017E 16.1 9.4 1.7 2.2% 10.8% ‐64%
Ruchanon Chiemkarnkit Analyst, no. 057859 [email protected] 66 (0) 2624‐6268 REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 15,180 964 0.43 21% 964 21.3% 0.15 3.64 2018E 13.3 7.9 1.6 2.6% 12.2% ‐67%
2019E 16,491 1,082 0.48 12% 1,082 12.2% 0.17 3.95 2019E 11.8 7.2 1.4 3.0% 12.6% ‐73%
Figure 1: 2Q17 earnings results Profit and Loss (Btmn) Year‐end 31 Dec
2Q16
1Q17
2Q17
% YoY
% QoQ
6M17
% YoY
2017E
% YoY
% YTD
Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Extraordinary 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 (%)
2,927 245 174 (2) 35 (4) (40) 482 574 132 0.25 8.38 5.96 19.61 2.51 58.06 (0.30) 2.72 2.21
2,882 266 190 (3) 69 (21) (45) 59 174 160 0.08 9.23 6.58 6.04 2.95 36.42 (0.42) 3.21 2.23
3,101 269 197 (6) 26 (3) (2) (11) 125 138 0.06 8.67 6.34 4.04 n.m. 18.92 n.m. 3.19 1.91
5.9 9.6 12.9 264.6 (24.1) (11.8) (94.5) n.m. (78.2) 5.0 (78.2)
7.6 1.1 3.8 101.8 (61.7) (85.3) (95.1) n.m. (28.0) (13.9) (28.0)
5,983 535 386 (10) 95 (24) (47) 48 300 299 0.13 8.94 6.46 4.99 n.m. 24.72 n.m. 3.19 4.85
18.9 26.5 40.6 110.6 (2.3) 240.5 (55.6) (90.0) (50.1) 32.9 (50.1)
13,335 1,438 1,069 (23) 165 (20) 0 0 795 795 0.35 10.79 8.02 5.96 2.30 29.35 0.09 3.36 10.80
21.8 49.6 54.8 14.5 (18.8) 178.4 n.m. n.m. (50.4) 40.1 (50.4)
44.9 37.2 36.1 41.8 57.7 118.4 n.m. n.m. 37.7 37.6 37.7
Source: KT ZMICO Research Figure 2: PER (average 14.80x) and PBV band (average 2.10x) PER(X)
PBV(X)
18
Avg. -1.0 S.D.
1.9 -2.0 S.D.
1.7
Source: Bloomberg, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Mar-15
1.3
Feb-15
11 Jan-15
1.5 Jun-15
-3.0 S.D.
12
May-15
13
2.1
Apr-15
14
+2.0 S.D.
2.3 +1.0 S.D.
Mar-15
15
2.5
Feb-15
16
+2.0 S.D. +1.5.0 S.D. +1.0 S.D. +0.5 S.D. Avg. -0.5 S.D. -1.0 S.D. -1.5.0 S.D. -2.0 S.D.
+3.0 S.D.
Jan-15
17
2.7
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
2015
2016
2017E
2018E
2019E
8,295 (7,266) 1,029 (402) 806 179 627 (4) 110 732 (13) ‐ (1,023) ‐ (304) (0.13) 719 0.32 0.08
8,119 (7,194) 926 (339) 765 178 587 (6) 102 682 15 ‐ 1,484 ‐ 2,029 0.90 697 0.31 ‐
10,948 (9,987) 961 (570) 691 300 391 (20) 204 575 (7) ‐ 1,137 ‐ 1,603 0.71 567 0.25 0.08
13,335 (11,897) 1,438 (766) 1,069 397 673 (23) 165 815 (20) ‐ ‐ ‐ 795 0.35 795 0.35 0.12
15,180 (13,489) 1,691 (867) 1,260 436 824 (23) 188 989 (25) ‐ ‐ ‐ 964 0.43 964 0.43 0.15
16,491 (14,619) 1,872 (939) 1,382 450 933 (27) 204 1,110 (28) ‐ ‐ ‐ 1,082 0.48 1,082 0.48 0.17
2014
2015
2016
2017E
2018E
2019E
3,959 759 724 ‐ 918 71 6,431 89 86 2,782 2,266 3,649 6,431
2,992 1,637 1,030 ‐ 2,001 93 7,752 79 89 2,071 2,266 5,681 7,752
3,945 2,455 1,943 ‐ 2,296 95 10,735 181 859 3,637 2,266 7,098 10,735
5,524 2,192 1,630 ‐ 2,560 137 12,043 310 345 4,428 2,266 7,614 12,043
6,189 2,495 1,848 ‐ 2,485 138 13,156 226 431 4,914 2,266 8,241 13,156
7,260 2,711 2,003 ‐ 2,197 139 14,309 218 545 5,364 2,266 8,945 14,309
2014
2015
2016
2017E
2018E
2019E
(291) 2,159 179 554 2,601 (96) (1,931) (2,027) ‐ 10 (521) (27) (538) 37 574 0.25
2,014 92 178 (1,942) 342 (1,226) 1,255 30 ‐ ‐ ‐ (2) (2) 370 372 0.16
1,766 (65) 300 (414) 1,587 (239) (2,299) (2,538) 451 ‐ (181) (13) 257 (695) (951) (0.42)
795 ‐ 397 1,711 2,903 (661) ‐ (661) (385) ‐ (278) ‐ (663) 1,578 2,242 0.99
964 ‐ 436 (38) 1,362 (361) ‐ (361) 2 ‐ (337) ‐ (336) 665 1,001 0.44
1,082 ‐ 450 (28) 1,504 (161) ‐ (161) 106 ‐ (378) ‐ (272) 1,071 1,343 0.59
2014
2015
2016
2017E
2018E
2019E
3.6% 11.5% ‐118.6% 12.4% 9.7% 7.6% ‐3.7% 8.7% 1.8%
‐2.1% ‐5.2% ‐766.2% 11.4% 9.4% 7.2% 25.0% 8.6% ‐2.2%
34.8% ‐9.6% ‐21.1% 8.8% 6.3% 3.6% 14.6% 5.2% 1.3%
21.8% 54.8% ‐50.4% 10.8% 8.0% 5.0% 6.0% 6.0% 2.5%
13.8% 17.8% 21.3% 11.1% 8.3% 5.4% 6.4% 6.4% 2.5%
8.6% 9.7% 12.2% 11.4% 8.4% 5.7% 6.6% 6.6% 2.5%
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
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.
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
Company Update
Electronic Components
Earnings upgrade/Earnings downgrade/ Overview unchanged
August 15, 2017
Continued expansion of production capacity Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.355
0.428
KT ZMICO vs. consensus Share data
‐1.4%
0.5%
Reuters / Bloomberg
SVI.BK/SVI TB
Paid‐up Shares (m)
2,265.75
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
13.00/385.00
Foreign limit / actual (%)
100.00/8.71
52 week High / Low (Bt)
6.50/4.22
Avg. daily T/O (shares 000) NVDR (%)
7,547.00 4.89
Estimated free float (%)
45.05
Beta
1.19
URL
www.svi.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Earnings projection and rating are maintained 2Q17 core profit grew YoY but fell QoQ on the back of higher raw material costs and the appreciation of the baht. We expect 2H earnings growth to accelerate on the back of new orders, which are expected to beat the level seen in 1H17. We stand by our current 2017E earnings projection and “Buy” rating, with the DCF‐based target price of Bt6.4/share. Total revenue from SVI still grew well but that from Seidel was flat SVI reported total revenue of Bt3,101mn (US$91mn) in 2Q17, up 6%YoY and 8%QoQ. Over 77% of revenue was contributed by SVI’s business (+11%YoY, +11%QoQ), which grew well thanks to expansions of production capacity to support orders placed by new clients. Meanwhile, Seidel’s business remained stable as the firm was upgrading its plant’s efficiency. NP dropped YoY given a lack of extra items SVI reported 2Q17 NP of Bt125mn, down by 78%YoY and 28%QoQ because in 2Q17 the firm received an insurance claim from the fire at around Bt523mn. Excluding the extra items and forex gain, the firm booked core profit of Bt138mn, up 5%YoY and down 14%QoQ. GPM was limited by high raw material costs and appreciation of the baht 2Q17 core profit fell QoQ on the back of 3% appreciation of the baht (+2.4%YoY) and higher raw material costs, which pushed the GPM down to 8.7% vs. 9.2% in the previous quarter. The core profit increased YoY thanks to revenue growth and a wider GPM vs. 8.4% in 2Q16. 2H earnings to improve HoH We believe the utilization rate will increase to 85‐95% in 2H17 from 80% in 2Q17 on the back of new orders that will increase significantly in 2H17. We maintain our current earnings forecast and a “Buy” rating, with the target price of Bt6.4/share. Financials and Valuation FY Ended 31 Dec Revenues (Bt mn) Net profit (Bt mn) EPS (Bt) EPS growth (%) Norm. profit (Bt mn) Norm. profit growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net Gearing (%)
2015 8,119 2,029 0.90 766% 697 ‐3.0% ‐ 2.51 2015 18.4 13.1 2.3 0.0% 14.9% ‐50%
2016 10,948 1,603 0.71 ‐21% 567 ‐18.6% 0.08 3.13 2016 22.6 14.5 1.8 1.4% 8.9% ‐41%
2017E 13,335 795 0.35 ‐50% 795 40.1% 0.12 3.36 2017E 16.1 9.4 1.7 2.2% 10.8% ‐64%
Ruchanon Chiemkarnkit Analyst, no. 057859 [email protected] 66 (0) 2624‐6268 REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 15,180 964 0.43 21% 964 21.3% 0.15 3.64 2018E 13.3 7.9 1.6 2.6% 12.2% ‐67%
2019E 16,491 1,082 0.48 12% 1,082 12.2% 0.17 3.95 2019E 11.8 7.2 1.4 3.0% 12.6% ‐73%
Figure 1: 2Q17 earnings results Profit and Loss (Btmn) Year‐end 31 Dec
2Q16
1Q17
2Q17
% YoY
% QoQ
6M17
% YoY
2017E
% YoY
% YTD
Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Extraordinary 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 (%)
2,927 245 174 (2) 35 (4) (40) 482 574 132 0.25 8.38 5.96 19.61 2.51 58.06 (0.30) 2.72 2.21
2,882 266 190 (3) 69 (21) (45) 59 174 160 0.08 9.23 6.58 6.04 2.95 36.42 (0.42) 3.21 2.23
3,101 269 197 (6) 26 (3) (2) (11) 125 138 0.06 8.67 6.34 4.04 n.m. 18.92 n.m. 3.19 1.91
5.9 9.6 12.9 264.6 (24.1) (11.8) (94.5) n.m. (78.2) 5.0 (78.2)
7.6 1.1 3.8 101.8 (61.7) (85.3) (95.1) n.m. (28.0) (13.9) (28.0)
5,983 535 386 (10) 95 (24) (47) 48 300 299 0.13 8.94 6.46 4.99 n.m. 24.72 n.m. 3.19 4.85
18.9 26.5 40.6 110.6 (2.3) 240.5 (55.6) (90.0) (50.1) 32.9 (50.1)
13,335 1,438 1,069 (23) 165 (20) 0 0 795 795 0.35 10.79 8.02 5.96 2.30 29.35 0.09 3.36 10.80
21.8 49.6 54.8 14.5 (18.8) 178.4 n.m. n.m. (50.4) 40.1 (50.4)
44.9 37.2 36.1 41.8 57.7 118.4 n.m. n.m. 37.7 37.6 37.7
Source: KT ZMICO Research Figure 2: PER (average 14.80x) and PBV band (average 2.10x) PER(X)
PBV(X)
18
Avg. -1.0 S.D.
1.9 -2.0 S.D.
1.7
Source: Bloomberg, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Mar-15
1.3
Feb-15
11 Jan-15
1.5 Jun-15
-3.0 S.D.
12
May-15
13
2.1
Apr-15
14
+2.0 S.D.
2.3 +1.0 S.D.
Mar-15
15
2.5
Feb-15
16
+2.0 S.D. +1.5.0 S.D. +1.0 S.D. +0.5 S.D. Avg. -0.5 S.D. -1.0 S.D. -1.5.0 S.D. -2.0 S.D.
+3.0 S.D.
Jan-15
17
2.7
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
2015
2016
2017E
2018E
2019E
8,295 (7,266) 1,029 (402) 806 179 627 (4) 110 732 (13) ‐ (1,023) ‐ (304) (0.13) 719 0.32 0.08
8,119 (7,194) 926 (339) 765 178 587 (6) 102 682 15 ‐ 1,484 ‐ 2,029 0.90 697 0.31 ‐
10,948 (9,987) 961 (570) 691 300 391 (20) 204 575 (7) ‐ 1,137 ‐ 1,603 0.71 567 0.25 0.08
13,335 (11,897) 1,438 (766) 1,069 397 673 (23) 165 815 (20) ‐ ‐ ‐ 795 0.35 795 0.35 0.12
15,180 (13,489) 1,691 (867) 1,260 436 824 (23) 188 989 (25) ‐ ‐ ‐ 964 0.43 964 0.43 0.15
16,491 (14,619) 1,872 (939) 1,382 450 933 (27) 204 1,110 (28) ‐ ‐ ‐ 1,082 0.48 1,082 0.48 0.17
2014
2015
2016
2017E
2018E
2019E
3,959 759 724 ‐ 918 71 6,431 89 86 2,782 2,266 3,649 6,431
2,992 1,637 1,030 ‐ 2,001 93 7,752 79 89 2,071 2,266 5,681 7,752
3,945 2,455 1,943 ‐ 2,296 95 10,735 181 859 3,637 2,266 7,098 10,735
5,524 2,192 1,630 ‐ 2,560 137 12,043 310 345 4,428 2,266 7,614 12,043
6,189 2,495 1,848 ‐ 2,485 138 13,156 226 431 4,914 2,266 8,241 13,156
7,260 2,711 2,003 ‐ 2,197 139 14,309 218 545 5,364 2,266 8,945 14,309
2014
2015
2016
2017E
2018E
2019E
(291) 2,159 179 554 2,601 (96) (1,931) (2,027) ‐ 10 (521) (27) (538) 37 574 0.25
2,014 92 178 (1,942) 342 (1,226) 1,255 30 ‐ ‐ ‐ (2) (2) 370 372 0.16
1,766 (65) 300 (414) 1,587 (239) (2,299) (2,538) 451 ‐ (181) (13) 257 (695) (951) (0.42)
795 ‐ 397 1,711 2,903 (661) ‐ (661) (385) ‐ (278) ‐ (663) 1,578 2,242 0.99
964 ‐ 436 (38) 1,362 (361) ‐ (361) 2 ‐ (337) ‐ (336) 665 1,001 0.44
1,082 ‐ 450 (28) 1,504 (161) ‐ (161) 106 ‐ (378) ‐ (272) 1,071 1,343 0.59
2014
2015
2016
2017E
2018E
2019E
3.6% 11.5% ‐118.6% 12.4% 9.7% 7.6% ‐3.7% 8.7% 1.8%
‐2.1% ‐5.2% ‐766.2% 11.4% 9.4% 7.2% 25.0% 8.6% ‐2.2%
34.8% ‐9.6% ‐21.1% 8.8% 6.3% 3.6% 14.6% 5.2% 1.3%
21.8% 54.8% ‐50.4% 10.8% 8.0% 5.0% 6.0% 6.0% 2.5%
13.8% 17.8% 21.3% 11.1% 8.3% 5.4% 6.4% 6.4% 2.5%
8.6% 9.7% 12.2% 11.4% 8.4% 5.7% 6.6% 6.6% 2.5%
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
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.
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
