Outperform (17E TP Bt15.80) Company Update - Global Alliance
BCPG
Outperform (17E TP Bt15.80)
Company Update
Close Bt15.10
Energy & Utilities August 11, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
2Q17 core earnings undestroyed Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
1.141
1.349
KT ZMICO vs. consensus Share data
‐2.7%
5.3%
Reuters / Bloomberg
BCPG.BK/BCPG TB
Paid‐up Shares (m)
1,991.33
Par (Bt)
5.00
Market cap (Bt bn / US$ m)
30.00/904.00
Foreign limit / actual (%)
49.00/0.80
52 week High / Low (Bt)
16.00/10.60
Avg. daily T/O (shares 000)
34,855.00
NVDR (%)
1.18
Estimated free float (%)
29.58
Beta
1.42
URL
www.bcpggroup.com
CGR
Promising earnings growth; undemanding valuation The company’s growth story looks promising, with regional renewable projects as the main catalyst, particularly in the case of geothermal projects in Indonesia with its first contribution to start in 2H17E. Our forecasts call for soaring core profit growth at 34% CAGR in 2017‐18E, with a projected core profit contribution/effective MW at ~Bt8.0‐ 8.5mn/MW in 2017‐18E (on average compared with domestic renewable peers). Meanwhile, its PBV/ROE is still undemanding at 0.13x 2017E PBV/ROE (vs. domestic renewable peers at 0.17x). Thus, we maintain our Outperform rating (17E SOTP‐based TP : Bt15.8). Flat 2Q17 NP at Bt462mn BCPG delivered flat Bt462mn NP in 2Q17 (+2% YoY, +2% QoQ), with extraordinary items including 1) a one‐off Bt140mn reversal of the provision for contingent considerations from the business acquisition related to the settlement with SunEdison; 2) advisory fees for the acquisition deal totaling Bt54mn; and 3) forex loss and loss on foreign currency buying forward contracts amounting to Bt114mn. 2Q17 core profit marked growth both YoY and QoQ Meanwhile, its 2Q17 core profit registered at Bt491mn (+29% YoY, +24% QoQ), thanks to 1) the solid revenue from solar Thailand at Bt719mn, with higher power generation from the full‐quarter contribution of the 12MW Solar Coop helping offset the smaller power generation of the 118MW solar projects due to less irradiance, resulting in total power generation of 68.07GWh in 2Q17 (+4.5% YoY, +3.2% QoQ); 2) the dramatic increase in revenue from solar Japan to Bt171mn (+3x YoY, +1x QoQ) in line with higher power generation to 14.4GWh (+3.3x YoY, +1.2x QoQ) following the full‐quarter contribution of the two new projects in Japan (Nikaho and Nagi), with the six projects in Japan now having 30MW of total capacity in operation; and 3) the first profit contribution of Bt43mn from the wind project in the Philippines. Slight downward adjustment on 2017E NP We slightly revise down the 2017E NP by 2% to Bt2.2bn to reflect the one‐off extraordinary items mentioned above, with no change in the 17E SOTP‐based TP at Bt15.8. Both its core profit and NP in 1H17 accounted for 41% of our full‐year forecasts; meanwhile, an accelerating performance is expected in 2H17E given the first profit contribution from geothermal projects in Indonesia, as well as the seasonal high power generation in 3Q for Solar Japan and in 4Q for Solar Thailand.
‐
Anti‐corruption
n.a.
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) ‐ weighted EPS growth (%) ‐ weighted Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 3,024 2,147 2.82 11.05 3.45 5.31 2015 5.36 6.28 2.84 22.8% 49.2% 171.5%
2016 3,084 1,541 1.46 (47.98) 0.69 6.79 2016 10.31 13.13 2.22 4.6% 17.7% 19.2%
2017E 3,696 2,209 1.11 (24.21) 0.67 7.24 2017E 13.60 16.12 2.09 4.4% 15.8% 126.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 4,200 2,830 1.42 28.15 0.85 7.81 2018E 10.62 15.74 1.93 5.7% 18.9% 168.9%
2019E 5,475 3,333 1.68 17.76 1.01 8.48 2019E 9.01 12.39 1.78 6.7% 20.6% 183.6%
Figure 1: BCPG’s 2Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Extraordinary Items 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 (%)
2Q16 759 567 597 (92) 18 5 163 (90) ‐ 455 382 0.32 74.7 78.6 59.9 2.5 4.9 1.0 5.8 22.5
Source: KT Zmico Research
1Q17 798 577 622 (86) 22 1 (3) 62 ‐ 454 396 0.23 72.3 78.0 56.9 4.4 5.3 0.7 7.0 13.0
2Q17 890 642 691 (84) 18 2 (114) 86 43 462 491 0.23 72.2 77.6 52.0 6.4 6.1 0.7 7.0 13.3
% YoY 17.1 13.2 15.7 (8.9) 1.0 (62.5) nm nm nm 1.7 28.6 (28.1)
% QoQ 11.5 11.3 11.0 (2.8) (18.1) 33.6 3,590 39.5 nm 1.9 24.1 0.0
1H16 1,542 1,162 1,241 (173) 21 6 145 117 0 1,067 806 0.98 75.4 80.5 69.2 2.5 5.5 1.0 5.8 26.4
1H17 1,688 1,219 1,313 (170) 40 3 (117) 147 43 916 886 0.46 72.2 77.8 54.3 6.4 5.7 0.7 7.0 13.2
% YoY 9.4 4.9 5.8 (1.5) 87.7 (44.4) nm 26.5 nm (14.1) 10.0 (53.1)
2016 3,084 2,262 2,447 (349) 70 19 (86) 43 ‐ 1,541 1,585 1.46 73.3 79.3 50.0 3.6 5.3 0.8 6.8 17.7
2017E 3,696 2,678 2,971 (524) 15 (24) (120) 148 439 2,209 2,181 1.11 72.5 80.4 59.8 1.2 4.3 1.5 7.2 15.8
% YoY 19.8 18.4 21.4 50.0 (78.0) nm 39.0 247.0 nm 43.3 37.6 (24.2)
YTD (% 17E) 46% 46% 44% 32% 262% ‐13% 98% 100% 10% 41% 41% 41%
Figure 2: Comparison of domestic renewable operators’ profit contribution per effective MW
Figure 3: Comparison of domestic renewable operators’ 2017‐18E PBV/ROE
Source: KT Zmico Research, Bloomberg Note: effective MW calculated based on the projected month contribution of each new project
Source: KT Zmico Research, Bloomberg
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Minority interests Net profit Reported EPS Fully diluted EPS Core net profit Fully diluted core EPS Dividend (Bt) BALANCE SHEET (Btm) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Minority interests Total liab. & shareholder equity CASH FLOW (Btm) Net income Forex and other extraordinary adjustments 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 2,692 (556) 2,136 (27) 2,540 430 2,110 (272) 28 1,865 (5) 0 0 0 0 1,861 2.54 2.51 1,861 2.51 2.45
2015 3,024 (624) 2,400 (45) 2,833 478 2,355 (208) 14 2,160 (11) (2) 0 0 0 2,147 2.82 2.90 2,149 2.90 3.45
2016 3,084 (822) 2,262 (416) 2,447 602 1,845 (349) 70 1,566 19 (86) 43 0 0 1,541 1.46 0.77 1,585 0.80 0.69
2017E 3,696 (1,018) 2,678 (403) 2,971 696 2,275 (524) 15 1,766 (24) (120) 148 439 0 2,209 1.11 1.11 2,181 1.10 0.67
2018E 4,200 (1,274) 2,926 (430) 3,372 877 2,495 (711) 15 1,799 (62) 0 0 1,093 0 2,830 1.42 1.42 2,830 1.42 0.85
2019E 5,475 (1,932) 3,543 (487) 4,401 1,344 3,057 (725) 15 2,347 (152) 0 0 1,138 0 3,333 1.68 1.68 3,333 1.68 1.01
2014 1,017 547 0 10,656 34 12,254 438 6,879 7,451 3,700 4,803 0 12,254
2015 975 456 0 10,220 21 11,671 656 6,939 7,741 3,700 3,930 0 11,671
2016 8,061 1,119 0 14,195 2,114 25,489 1,194 8,956 11,972 9,950 13,517 0 25,489
2017E 3,959 1,063 0 17,227 14,739 36,988 3,727 18,078 22,588 9,950 14,400 0 36,988
2018E 1,031 1,208 0 25,689 15,352 43,281 2,462 21,612 27,748 9,950 15,532 0 43,281
2019E 932 1,575 0 30,756 15,990 49,254 3,045 22,361 32,388 9,950 16,866 0 49,254
2014 1,861 0 430 (308) 1,983 (3,457)
2015 2,147 2 478 139 2,766 (41)
2016 1,541 86 602 526 2,756 (4,577)
2017E 2,209 120 696 (1,367) 1,658 (16,288)
2018E 2,830 0 877 (1,204) 2,504 (9,886)
2019E 3,333 0 1,344 (1,377) 3,300 (6,981)
(3,457) 7,317 464 (1,810) (2) 5,969 4,495 (1,474) (1.99)
(41) 7,595 (469) (2,552) (25) 4,549 7,274 2,725 3.68
(4,577) 10,150 9,418 (1,373) (1,693) 16,502 14,681 (1,821) (0.92)
(16,288) 21,804 415 (1,325) (214) 20,679 6,048 (14,631) (7.35)
(9,886) 24,074 1,031 (1,698) (66) 23,340 15,958 (7,382) (3.71)
(6,981) 25,406 986 (2,000) (68) 24,323 20,643 (3,681) (1.85)
2014 84.1 85.3 30.7 79.4 94.3 78.4 69.1 69.1 0.2
2015 12.3 11.5 11.0 79.4 93.7 77.9 71.0 71.1 0.5
2016 2.0 (13.6) (48.0) 73.3 79.3 59.8 50.0 51.4 (1.2)
2017E 19.8 21.4 (24.2) 72.5 80.4 61.6 59.8 59.0 1.4
2018E 13.6 13.5 28.1 69.7 80.3 59.4 67.4 67.4 3.5
2019E 30.4 30.5 17.8 64.7 80.4 55.8 60.9 60.9 6.5
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
Outperform (17E TP Bt15.80)
Company Update
Close Bt15.10
Energy & Utilities August 11, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
2Q17 core earnings undestroyed Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
1.141
1.349
KT ZMICO vs. consensus Share data
‐2.7%
5.3%
Reuters / Bloomberg
BCPG.BK/BCPG TB
Paid‐up Shares (m)
1,991.33
Par (Bt)
5.00
Market cap (Bt bn / US$ m)
30.00/904.00
Foreign limit / actual (%)
49.00/0.80
52 week High / Low (Bt)
16.00/10.60
Avg. daily T/O (shares 000)
34,855.00
NVDR (%)
1.18
Estimated free float (%)
29.58
Beta
1.42
URL
www.bcpggroup.com
CGR
Promising earnings growth; undemanding valuation The company’s growth story looks promising, with regional renewable projects as the main catalyst, particularly in the case of geothermal projects in Indonesia with its first contribution to start in 2H17E. Our forecasts call for soaring core profit growth at 34% CAGR in 2017‐18E, with a projected core profit contribution/effective MW at ~Bt8.0‐ 8.5mn/MW in 2017‐18E (on average compared with domestic renewable peers). Meanwhile, its PBV/ROE is still undemanding at 0.13x 2017E PBV/ROE (vs. domestic renewable peers at 0.17x). Thus, we maintain our Outperform rating (17E SOTP‐based TP : Bt15.8). Flat 2Q17 NP at Bt462mn BCPG delivered flat Bt462mn NP in 2Q17 (+2% YoY, +2% QoQ), with extraordinary items including 1) a one‐off Bt140mn reversal of the provision for contingent considerations from the business acquisition related to the settlement with SunEdison; 2) advisory fees for the acquisition deal totaling Bt54mn; and 3) forex loss and loss on foreign currency buying forward contracts amounting to Bt114mn. 2Q17 core profit marked growth both YoY and QoQ Meanwhile, its 2Q17 core profit registered at Bt491mn (+29% YoY, +24% QoQ), thanks to 1) the solid revenue from solar Thailand at Bt719mn, with higher power generation from the full‐quarter contribution of the 12MW Solar Coop helping offset the smaller power generation of the 118MW solar projects due to less irradiance, resulting in total power generation of 68.07GWh in 2Q17 (+4.5% YoY, +3.2% QoQ); 2) the dramatic increase in revenue from solar Japan to Bt171mn (+3x YoY, +1x QoQ) in line with higher power generation to 14.4GWh (+3.3x YoY, +1.2x QoQ) following the full‐quarter contribution of the two new projects in Japan (Nikaho and Nagi), with the six projects in Japan now having 30MW of total capacity in operation; and 3) the first profit contribution of Bt43mn from the wind project in the Philippines. Slight downward adjustment on 2017E NP We slightly revise down the 2017E NP by 2% to Bt2.2bn to reflect the one‐off extraordinary items mentioned above, with no change in the 17E SOTP‐based TP at Bt15.8. Both its core profit and NP in 1H17 accounted for 41% of our full‐year forecasts; meanwhile, an accelerating performance is expected in 2H17E given the first profit contribution from geothermal projects in Indonesia, as well as the seasonal high power generation in 3Q for Solar Japan and in 4Q for Solar Thailand.
‐
Anti‐corruption
n.a.
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) ‐ weighted EPS growth (%) ‐ weighted Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 3,024 2,147 2.82 11.05 3.45 5.31 2015 5.36 6.28 2.84 22.8% 49.2% 171.5%
2016 3,084 1,541 1.46 (47.98) 0.69 6.79 2016 10.31 13.13 2.22 4.6% 17.7% 19.2%
2017E 3,696 2,209 1.11 (24.21) 0.67 7.24 2017E 13.60 16.12 2.09 4.4% 15.8% 126.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 4,200 2,830 1.42 28.15 0.85 7.81 2018E 10.62 15.74 1.93 5.7% 18.9% 168.9%
2019E 5,475 3,333 1.68 17.76 1.01 8.48 2019E 9.01 12.39 1.78 6.7% 20.6% 183.6%
Figure 1: BCPG’s 2Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Extraordinary Items 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 (%)
2Q16 759 567 597 (92) 18 5 163 (90) ‐ 455 382 0.32 74.7 78.6 59.9 2.5 4.9 1.0 5.8 22.5
Source: KT Zmico Research
1Q17 798 577 622 (86) 22 1 (3) 62 ‐ 454 396 0.23 72.3 78.0 56.9 4.4 5.3 0.7 7.0 13.0
2Q17 890 642 691 (84) 18 2 (114) 86 43 462 491 0.23 72.2 77.6 52.0 6.4 6.1 0.7 7.0 13.3
% YoY 17.1 13.2 15.7 (8.9) 1.0 (62.5) nm nm nm 1.7 28.6 (28.1)
% QoQ 11.5 11.3 11.0 (2.8) (18.1) 33.6 3,590 39.5 nm 1.9 24.1 0.0
1H16 1,542 1,162 1,241 (173) 21 6 145 117 0 1,067 806 0.98 75.4 80.5 69.2 2.5 5.5 1.0 5.8 26.4
1H17 1,688 1,219 1,313 (170) 40 3 (117) 147 43 916 886 0.46 72.2 77.8 54.3 6.4 5.7 0.7 7.0 13.2
% YoY 9.4 4.9 5.8 (1.5) 87.7 (44.4) nm 26.5 nm (14.1) 10.0 (53.1)
2016 3,084 2,262 2,447 (349) 70 19 (86) 43 ‐ 1,541 1,585 1.46 73.3 79.3 50.0 3.6 5.3 0.8 6.8 17.7
2017E 3,696 2,678 2,971 (524) 15 (24) (120) 148 439 2,209 2,181 1.11 72.5 80.4 59.8 1.2 4.3 1.5 7.2 15.8
% YoY 19.8 18.4 21.4 50.0 (78.0) nm 39.0 247.0 nm 43.3 37.6 (24.2)
YTD (% 17E) 46% 46% 44% 32% 262% ‐13% 98% 100% 10% 41% 41% 41%
Figure 2: Comparison of domestic renewable operators’ profit contribution per effective MW
Figure 3: Comparison of domestic renewable operators’ 2017‐18E PBV/ROE
Source: KT Zmico Research, Bloomberg Note: effective MW calculated based on the projected month contribution of each new project
Source: KT Zmico Research, Bloomberg
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Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Minority interests Net profit Reported EPS Fully diluted EPS Core net profit Fully diluted core EPS Dividend (Bt) BALANCE SHEET (Btm) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Minority interests Total liab. & shareholder equity CASH FLOW (Btm) Net income Forex and other extraordinary adjustments 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 2,692 (556) 2,136 (27) 2,540 430 2,110 (272) 28 1,865 (5) 0 0 0 0 1,861 2.54 2.51 1,861 2.51 2.45
2015 3,024 (624) 2,400 (45) 2,833 478 2,355 (208) 14 2,160 (11) (2) 0 0 0 2,147 2.82 2.90 2,149 2.90 3.45
2016 3,084 (822) 2,262 (416) 2,447 602 1,845 (349) 70 1,566 19 (86) 43 0 0 1,541 1.46 0.77 1,585 0.80 0.69
2017E 3,696 (1,018) 2,678 (403) 2,971 696 2,275 (524) 15 1,766 (24) (120) 148 439 0 2,209 1.11 1.11 2,181 1.10 0.67
2018E 4,200 (1,274) 2,926 (430) 3,372 877 2,495 (711) 15 1,799 (62) 0 0 1,093 0 2,830 1.42 1.42 2,830 1.42 0.85
2019E 5,475 (1,932) 3,543 (487) 4,401 1,344 3,057 (725) 15 2,347 (152) 0 0 1,138 0 3,333 1.68 1.68 3,333 1.68 1.01
2014 1,017 547 0 10,656 34 12,254 438 6,879 7,451 3,700 4,803 0 12,254
2015 975 456 0 10,220 21 11,671 656 6,939 7,741 3,700 3,930 0 11,671
2016 8,061 1,119 0 14,195 2,114 25,489 1,194 8,956 11,972 9,950 13,517 0 25,489
2017E 3,959 1,063 0 17,227 14,739 36,988 3,727 18,078 22,588 9,950 14,400 0 36,988
2018E 1,031 1,208 0 25,689 15,352 43,281 2,462 21,612 27,748 9,950 15,532 0 43,281
2019E 932 1,575 0 30,756 15,990 49,254 3,045 22,361 32,388 9,950 16,866 0 49,254
2014 1,861 0 430 (308) 1,983 (3,457)
2015 2,147 2 478 139 2,766 (41)
2016 1,541 86 602 526 2,756 (4,577)
2017E 2,209 120 696 (1,367) 1,658 (16,288)
2018E 2,830 0 877 (1,204) 2,504 (9,886)
2019E 3,333 0 1,344 (1,377) 3,300 (6,981)
(3,457) 7,317 464 (1,810) (2) 5,969 4,495 (1,474) (1.99)
(41) 7,595 (469) (2,552) (25) 4,549 7,274 2,725 3.68
(4,577) 10,150 9,418 (1,373) (1,693) 16,502 14,681 (1,821) (0.92)
(16,288) 21,804 415 (1,325) (214) 20,679 6,048 (14,631) (7.35)
(9,886) 24,074 1,031 (1,698) (66) 23,340 15,958 (7,382) (3.71)
(6,981) 25,406 986 (2,000) (68) 24,323 20,643 (3,681) (1.85)
2014 84.1 85.3 30.7 79.4 94.3 78.4 69.1 69.1 0.2
2015 12.3 11.5 11.0 79.4 93.7 77.9 71.0 71.1 0.5
2016 2.0 (13.6) (48.0) 73.3 79.3 59.8 50.0 51.4 (1.2)
2017E 19.8 21.4 (24.2) 72.5 80.4 61.6 59.8 59.0 1.4
2018E 13.6 13.5 28.1 69.7 80.3 59.4 67.4 67.4 3.5
2019E 30.4 30.5 17.8 64.7 80.4 55.8 60.9 60.9 6.5
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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
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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
