Outperform (15E TP Bt18.70) - Global Alliance Partners
TPC Power Holding Outperform (15E TP Bt18.70)
Company Update
Close Bt19.00
MAI ‐ Resources June 17, 2015
Earnings upgrade/Earnings downgrade/Overview unchanged
Better quarters ahead
Project development on schedule New power plants will start operations from 3Q15 onward. MWE will COD in July while MGE will come around the end of Q3. The overall project development is on schedule. We estimate that the two power plants will deliver bottom line growth of 159% in 2015E. Four consecutive years of YoY growth We estimate a better profitability profile of the FiT system compared to the Adder system. With a higher selling price at Bt4.5 per unit, FiT power plants will generate approximately Bt15mn per MW of net profit (IRR around 25%) while CRB delivers just around Bt10mn (IRR around 18%). Together with the on‐schedule expansion plan, TPCH will start to deliver YoY bottom line growth over the next four years. Our model suggests net profit CAGR of 94% until 2019E.
FY15
FY16
Consensus EPS (Bt)
0.235
0.795
KT ZMICO vs. consensus Share data
‐23.4%
0.6%
Reuters / Bloomberg
TPCH.BK/TPCH TB
Paid‐up Shares (m)
401.20
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
8.00/226.00
Foreign limit / actual (%)
49.00/0.00
52 week High / Low (Bt)
27.00/13.00
Avg. daily T/O (shares 000)
9,757.00
NVDR (%)
0.41
Estimated free float (%)
31.23
Beta
2.47
URL
www.tpcpower.co.th
CGR
‐
More expansion The management is being aggressive by participating in FiT bidding whenever it takes place. The focus will be on the southern area and the total new capacity is expected to be approximately 100MW. Despite the risk of delays in the process, we think there will be some developments in 2H15. But lots of risk to get through Biomass power plant operators are facing some risk ahead. We think important issues include transmission lines, delays by the regulator, and lower project IRR from bidding. Expecting new projects, time to accumulate Capacity expansion will provide hype for the share performance in the short term. We are expecting more capacity from both greenfield projects and acquisitions. This should be the time for accumulating since the FiT bidding is likely to make some progress in 2H15, which will be positive for TPCH. Recommendation changes from Sell to Outperform. Financials and Valuation FY Ended 31 Dec
2014
2015E
2016E
2017E
2018E
Revenues (Btmn)
258
427
1,135
2,029
2,600
Net profit (Btmn)
28
74
321
544
696
EPS (Bt) EPS growth (%) Dividend (Bt)
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6289
0.09
0.18
0.80
1.35
1.73
80.0%
104.2%
334.8%
69.6%
28.0%
0.00
0.02
0.16
0.41
0.69
BV (Bt)
4.87
5.78
6.66
7.67
8.55
FY Ended 31 Dec
2014
2015E
2016E
2017E
2018E 11.01
PER (x)
212.2
103.9
23.90
14.10
EV/EBITDA (x)
77.10
39.98
11.49
6.38
5.19
PBV (x)
3.92
3.30
2.87
2.49
2.23
Dividend yield (%)
0.0%
0.1%
0.8%
2.1%
3.6%
ROE (%)
2.5%
4.2%
17.2%
26.2%
30.4%
Net gearing (%)
‐18%
10%
95%
108%
81%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
Project progress MWE is now in the testing process and should be ready to COD in the beginning of July. MGP and TSG are still waiting for FiT licenses. The SCOD of these two projects has been expanded so it takes longer for the approval process. PGP and SGP also received approvals for FiT licenses. The first phase of PTG is now awaiting approval from the Board of Renewable Energy and we should know the result soon. Figure 1: Project progress
Permission Period
Construction Period
SCOD
CRB (9.9/9.2)
Complete
Complete
3Q13
MWE (9.9/8.0)
Complete
MGP (9.9/9.2)
Complete
TSG (9.9/9.2)
Complete
PGP (9.9/9.2)
Complete
SGP (9.9/9.2)
Complete
PTG1 (23/21)
3Q15
Testing
4Q15
Under construction
1Q16
Start construction
3Q16
Start construction
4Q16 2Q17
Awaiting Board of RE
PTG2 (23/21)
2Q18 0%
10%
20%
30%
40%
50%
60%
70%
Source: TPCH
80%
90%
100%
Future expansion plan The first growth phase (from 10MW to 106MW) will begin from 3Q15 when MWE starts COD. The existing projects on hand will start to deliver YoY bottom line growth from 4Q15 onward as capacity will be higher YoY. We forecast net profit CAGR of 94% during 2015E – 2019E, with the highest growth in 2016E. Figure 2: Expansion plan
Figure 3: Net profit forecasts
MW 120 100
83 83 83 83
80 60 40 20
Bt'mn 900 800 700 600 500 400 300 200 100 0
106
10 10 10 10 10 10 10 10
20
30
40 40
50
60 60
3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
0
Source: TPCH, KT ZMICO Research
796 696 544 321
28 2014
74
2015E
2016E
2017E
2018E
Source: TPCH, KT ZMICO Research
The management reiterates the expansion plan of 150MW by 2017 and 200MW in 2019 (Figure 4). After the first 106MW, capacity expansion will involve FiT bidding, in which the authority will determine the zoning of power plants. TPCH will join the bidding with a focus on the southern area. However, the management said that they are eyeing an area in the central region as well. TPCH is now expecting additional biomass power plants in Narathiwat, Yala, Songkhla, Trang, and Krabi by 2017, which will increase total capacity to 105MW. By 2019, the company is expecting more power plants in Chumphon, Ranong, Phangnga, and Surat Thani, which will bring total capacity to 200MW. TPCH has set an IRR policy of 15%. REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
2019E
Figure 4: Future plan
Source: TPCH
What is in our TP and why did we change our recommendation? Our 2015E TP includes the first 106MW. We estimate project IRR of 17% for CRB, 25% for the FiT power plants, and 20% for PTG (which is SPP and is now not subject to FiT). Therefore, we believe that the recent drop in the share price has already reflected our cautious assumptions and we see no further downside from this point onward. There has been some progress on FiT bidding from the regulator. At the least, we should see what the bidding process will look like by the end of July. What we know so far is 1) operators will bid on fixed FiT and 2) the regulator will determine the area and size of biomass. The final bid price depends on the capability of each operator. However, the area and size are hard to predict because this will depend on the capacity of transmission lines and demand in the area. TPCH is well prepared for the southern area and we believe it has an advantage due to its experience in project development. We fine‐tune our forecasts by splitting the PTG project into two parts according to the company’s plan so the final financial outlook remains intact. We maintain our 2015E TP but expect to see new projects soon, which will be a positive factor for the earnings outlook as well as the share price performance. Recommend Outperform.
Figure 5: Project IRR and net margin forecasts Project IRR NPM CRB 17% 30% MWE 25% 50% MGP 25% 50% TSG 25% 50% PGP 25% 50% SGP 25% 50% PTG 20% 30% Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
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 Accounts payable 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 180 (95) 85 (41) 44 (22) 23 (23) 16 16 (0) 0 0 (6) 10 0.05 10 0.05 0.00
2014 258 (119) 139 (45) 95 (27) 67 (28) 4 43 7 0 0 (21) 28 0.09 28 0.09 0.00
2015E 427 (188) 238 (56) 182 (41) 141 (35) 0 106 0 0 0 (32) 74 0.18 74 0.18 0.02
2016E 1,135 (436) 699 (65) 635 (102) 533 (99) 0 434 0 0 0 (113) 321 0.80 321 0.80 0.16
2013 279 14 0 0 718 172 1,183 74 20 413 525 311 658 1,183
2014 1,372 55 0 0 1,406 248 3,082 174 24 842 1,134 400 1,948 3,082
2015E 1,843 110 0 0 2,327 248 4,528 140 44 1,930 2,209 401 2,320 4,528
2016E 826 187 0 0 4,935 248 6,195 224 72 3,134 3,525 401 2,670 6,195
2013 24 16 22 (26) 36 (131) (6) (136) 48 381 0 (60) 369 268 (100) (0.36)
2014 50 5 27 (0) 82 (844) (8) (852) 526 1,140 0 197 1,864 1,093 (770) (2.48)
2015E 106 0 41 (34) 113 (962) 0 (962) 1,054 4 (11) 273 1,319 471 (848) (2.11)
2016E 434 0 102 (49) 486 (2,710) 0 (2,710) 1,289 0 (35) (48) 1,206 (1,018) (2,224) (5.54)
2013 0.0% ‐580% ‐350% 47.2% 24.5% 12.6% 5.4% 5.4% 1.7%
2014 43.3% 113.8% 80.0% 53.9% 36.6% 26.1% 11.0% 11.0% ‐15.4%
2015E 65.2% 92.8% 104.2% 55.8% 42.7% 33.0% 17.3% 17.3% 0.0%
2016E 166.0% 248.1% 334.8% 61.6% 55.9% 46.9% 28.2% 28.2% 0.0%
2017E 2,029 (818) 1,211 (68) 1,142 (178) 964 (148) 0 817 0 0 0 (273) 544 1.35 544 1.35 0.41
2017E 688 333 0 0 6,057 248 7,327 349 153 3,651 4,248 401 3,078 7,327
2018E 2,600 (1,123) 1,478 (74) 1,403 (230) 1,173 (176) 0 997 0 0 0 (301) 696 1.73 696 1.73 0.69 2018E 779 427 0 0 5,827 248 7,281 573 202 2,981 3,850 401 3,431 7,282
2017E 817 0 178 (65) 929 (1,300) 0 (1,300) 642 0 (135) (273) 233 (137) (371) (0.92)
2018E 997 0 230 (46) 1,181 0 0 0 (446) 0 (343) (301) (1,091) 91 1,181 2.94
2017E 78.8% 80.0% 69.6% 59.7% 56.3% 47.5% 26.8% 26.8% 0.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
2018E 28.2% 22.9% 28.0% 56.8% 54.0% 45.1% 26.8% 26.8% 0.0%
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Company Update
Close Bt19.00
MAI ‐ Resources June 17, 2015
Earnings upgrade/Earnings downgrade/Overview unchanged
Better quarters ahead
Project development on schedule New power plants will start operations from 3Q15 onward. MWE will COD in July while MGE will come around the end of Q3. The overall project development is on schedule. We estimate that the two power plants will deliver bottom line growth of 159% in 2015E. Four consecutive years of YoY growth We estimate a better profitability profile of the FiT system compared to the Adder system. With a higher selling price at Bt4.5 per unit, FiT power plants will generate approximately Bt15mn per MW of net profit (IRR around 25%) while CRB delivers just around Bt10mn (IRR around 18%). Together with the on‐schedule expansion plan, TPCH will start to deliver YoY bottom line growth over the next four years. Our model suggests net profit CAGR of 94% until 2019E.
FY15
FY16
Consensus EPS (Bt)
0.235
0.795
KT ZMICO vs. consensus Share data
‐23.4%
0.6%
Reuters / Bloomberg
TPCH.BK/TPCH TB
Paid‐up Shares (m)
401.20
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
8.00/226.00
Foreign limit / actual (%)
49.00/0.00
52 week High / Low (Bt)
27.00/13.00
Avg. daily T/O (shares 000)
9,757.00
NVDR (%)
0.41
Estimated free float (%)
31.23
Beta
2.47
URL
www.tpcpower.co.th
CGR
‐
More expansion The management is being aggressive by participating in FiT bidding whenever it takes place. The focus will be on the southern area and the total new capacity is expected to be approximately 100MW. Despite the risk of delays in the process, we think there will be some developments in 2H15. But lots of risk to get through Biomass power plant operators are facing some risk ahead. We think important issues include transmission lines, delays by the regulator, and lower project IRR from bidding. Expecting new projects, time to accumulate Capacity expansion will provide hype for the share performance in the short term. We are expecting more capacity from both greenfield projects and acquisitions. This should be the time for accumulating since the FiT bidding is likely to make some progress in 2H15, which will be positive for TPCH. Recommendation changes from Sell to Outperform. Financials and Valuation FY Ended 31 Dec
2014
2015E
2016E
2017E
2018E
Revenues (Btmn)
258
427
1,135
2,029
2,600
Net profit (Btmn)
28
74
321
544
696
EPS (Bt) EPS growth (%) Dividend (Bt)
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6289
0.09
0.18
0.80
1.35
1.73
80.0%
104.2%
334.8%
69.6%
28.0%
0.00
0.02
0.16
0.41
0.69
BV (Bt)
4.87
5.78
6.66
7.67
8.55
FY Ended 31 Dec
2014
2015E
2016E
2017E
2018E 11.01
PER (x)
212.2
103.9
23.90
14.10
EV/EBITDA (x)
77.10
39.98
11.49
6.38
5.19
PBV (x)
3.92
3.30
2.87
2.49
2.23
Dividend yield (%)
0.0%
0.1%
0.8%
2.1%
3.6%
ROE (%)
2.5%
4.2%
17.2%
26.2%
30.4%
Net gearing (%)
‐18%
10%
95%
108%
81%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
Project progress MWE is now in the testing process and should be ready to COD in the beginning of July. MGP and TSG are still waiting for FiT licenses. The SCOD of these two projects has been expanded so it takes longer for the approval process. PGP and SGP also received approvals for FiT licenses. The first phase of PTG is now awaiting approval from the Board of Renewable Energy and we should know the result soon. Figure 1: Project progress
Permission Period
Construction Period
SCOD
CRB (9.9/9.2)
Complete
Complete
3Q13
MWE (9.9/8.0)
Complete
MGP (9.9/9.2)
Complete
TSG (9.9/9.2)
Complete
PGP (9.9/9.2)
Complete
SGP (9.9/9.2)
Complete
PTG1 (23/21)
3Q15
Testing
4Q15
Under construction
1Q16
Start construction
3Q16
Start construction
4Q16 2Q17
Awaiting Board of RE
PTG2 (23/21)
2Q18 0%
10%
20%
30%
40%
50%
60%
70%
Source: TPCH
80%
90%
100%
Future expansion plan The first growth phase (from 10MW to 106MW) will begin from 3Q15 when MWE starts COD. The existing projects on hand will start to deliver YoY bottom line growth from 4Q15 onward as capacity will be higher YoY. We forecast net profit CAGR of 94% during 2015E – 2019E, with the highest growth in 2016E. Figure 2: Expansion plan
Figure 3: Net profit forecasts
MW 120 100
83 83 83 83
80 60 40 20
Bt'mn 900 800 700 600 500 400 300 200 100 0
106
10 10 10 10 10 10 10 10
20
30
40 40
50
60 60
3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
0
Source: TPCH, KT ZMICO Research
796 696 544 321
28 2014
74
2015E
2016E
2017E
2018E
Source: TPCH, KT ZMICO Research
The management reiterates the expansion plan of 150MW by 2017 and 200MW in 2019 (Figure 4). After the first 106MW, capacity expansion will involve FiT bidding, in which the authority will determine the zoning of power plants. TPCH will join the bidding with a focus on the southern area. However, the management said that they are eyeing an area in the central region as well. TPCH is now expecting additional biomass power plants in Narathiwat, Yala, Songkhla, Trang, and Krabi by 2017, which will increase total capacity to 105MW. By 2019, the company is expecting more power plants in Chumphon, Ranong, Phangnga, and Surat Thani, which will bring total capacity to 200MW. TPCH has set an IRR policy of 15%. REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
2019E
Figure 4: Future plan
Source: TPCH
What is in our TP and why did we change our recommendation? Our 2015E TP includes the first 106MW. We estimate project IRR of 17% for CRB, 25% for the FiT power plants, and 20% for PTG (which is SPP and is now not subject to FiT). Therefore, we believe that the recent drop in the share price has already reflected our cautious assumptions and we see no further downside from this point onward. There has been some progress on FiT bidding from the regulator. At the least, we should see what the bidding process will look like by the end of July. What we know so far is 1) operators will bid on fixed FiT and 2) the regulator will determine the area and size of biomass. The final bid price depends on the capability of each operator. However, the area and size are hard to predict because this will depend on the capacity of transmission lines and demand in the area. TPCH is well prepared for the southern area and we believe it has an advantage due to its experience in project development. We fine‐tune our forecasts by splitting the PTG project into two parts according to the company’s plan so the final financial outlook remains intact. We maintain our 2015E TP but expect to see new projects soon, which will be a positive factor for the earnings outlook as well as the share price performance. Recommend Outperform.
Figure 5: Project IRR and net margin forecasts Project IRR NPM CRB 17% 30% MWE 25% 50% MGP 25% 50% TSG 25% 50% PGP 25% 50% SGP 25% 50% PTG 20% 30% Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
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 Accounts payable 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 180 (95) 85 (41) 44 (22) 23 (23) 16 16 (0) 0 0 (6) 10 0.05 10 0.05 0.00
2014 258 (119) 139 (45) 95 (27) 67 (28) 4 43 7 0 0 (21) 28 0.09 28 0.09 0.00
2015E 427 (188) 238 (56) 182 (41) 141 (35) 0 106 0 0 0 (32) 74 0.18 74 0.18 0.02
2016E 1,135 (436) 699 (65) 635 (102) 533 (99) 0 434 0 0 0 (113) 321 0.80 321 0.80 0.16
2013 279 14 0 0 718 172 1,183 74 20 413 525 311 658 1,183
2014 1,372 55 0 0 1,406 248 3,082 174 24 842 1,134 400 1,948 3,082
2015E 1,843 110 0 0 2,327 248 4,528 140 44 1,930 2,209 401 2,320 4,528
2016E 826 187 0 0 4,935 248 6,195 224 72 3,134 3,525 401 2,670 6,195
2013 24 16 22 (26) 36 (131) (6) (136) 48 381 0 (60) 369 268 (100) (0.36)
2014 50 5 27 (0) 82 (844) (8) (852) 526 1,140 0 197 1,864 1,093 (770) (2.48)
2015E 106 0 41 (34) 113 (962) 0 (962) 1,054 4 (11) 273 1,319 471 (848) (2.11)
2016E 434 0 102 (49) 486 (2,710) 0 (2,710) 1,289 0 (35) (48) 1,206 (1,018) (2,224) (5.54)
2013 0.0% ‐580% ‐350% 47.2% 24.5% 12.6% 5.4% 5.4% 1.7%
2014 43.3% 113.8% 80.0% 53.9% 36.6% 26.1% 11.0% 11.0% ‐15.4%
2015E 65.2% 92.8% 104.2% 55.8% 42.7% 33.0% 17.3% 17.3% 0.0%
2016E 166.0% 248.1% 334.8% 61.6% 55.9% 46.9% 28.2% 28.2% 0.0%
2017E 2,029 (818) 1,211 (68) 1,142 (178) 964 (148) 0 817 0 0 0 (273) 544 1.35 544 1.35 0.41
2017E 688 333 0 0 6,057 248 7,327 349 153 3,651 4,248 401 3,078 7,327
2018E 2,600 (1,123) 1,478 (74) 1,403 (230) 1,173 (176) 0 997 0 0 0 (301) 696 1.73 696 1.73 0.69 2018E 779 427 0 0 5,827 248 7,281 573 202 2,981 3,850 401 3,431 7,282
2017E 817 0 178 (65) 929 (1,300) 0 (1,300) 642 0 (135) (273) 233 (137) (371) (0.92)
2018E 997 0 230 (46) 1,181 0 0 0 (446) 0 (343) (301) (1,091) 91 1,181 2.94
2017E 78.8% 80.0% 69.6% 59.7% 56.3% 47.5% 26.8% 26.8% 0.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
2018E 28.2% 22.9% 28.0% 56.8% 54.0% 45.1% 26.8% 26.8% 0.0%
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
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Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
