Outperform (17E TP Bt436.00) Company Update
PTT
Outperform (17E TP Bt436.00)
Company Update
Close Bt386.00
Energy & Utilities May 16, 2017
Earnings upgrade/ Earnings downgrade / Overview unchanged
Record‐high 1Q17 NP Price Performance (%)
Solid earnings growth; PTTOR listing to color PTT’s share price We maintain our Outperform rating on PTT (with the newly‐revised 2017E SOTP‐based TP to Bt436 vs. Bt430 earlier following the upward revision on the target prices of PTTGC and TOP done earlier) given its solid core profit growth continuing in 2017‐18E at 11% CAGR driven by its core gas business and the higher contribution from PTTEP and its downstream affiliates. Meanwhile, the targeted listing of PTT Oil and Retail Business (PTTOR) will color PTT’s share price over the next 6‐12 months. Reported record‐high NP at Bt46.2bn in 1Q17 PTT’s 1Q17 NP made a record high at Bt46.2bn (+95% YoY, +142% QoQ), with substantial forex gain and gain on financial derivatives totaling Bt7.8bn in the quarter. Meanwhile, it posted soaring core profit of Bt38.4bn in 1Q17 (+73% YoY, +104% QoQ), thanks to the better performance of its downstream affiliates and its own GSP business, along with dividend income from mutual funds amounting to Bt4.3bn in the quarter.
Source: SET Smart
Downstream affiliates and its GSP the main drivers in 1Q17 Consensus EPS (Bt)
FY17
FY18
36.421
37.915
3.6%
6.8%
KT ZMICO vs. consensus Share data Reuters / Bloomberg
PTT.BK/PTT TB
Paid‐up Shares (m)
2,856.30
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
1,103.00/31,920.00
Foreign limit / actual (%)
30.00/15.93
52 week High / Low (Bt)
430.00/292.00
Avg. daily T/O (shares 000) NVDR (%)
5,571.00 6.90
Estimated free float (%)
48.87
Beta
1.14
URL
www.pttplc.com
CGR Anti‐corruption
Level 5 (Certified)
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
A higher profit contribution from downstream affiliates was seen in 1Q17, especially PTTGC and TOP, due to the improvement in product spreads (particularly in the case of BZ, butadiene, and MEG) and the negligible stock impact in the quarter (vs. stock loss impact in 1Q16). Meanwhile, PTT’s GSP performance in 1Q17 was driven by the widening product spreads given the higher product prices and low gas cost, as well as the larger sales volume to 1.67mn tons (+12% YoY from 1.5mn tons in 1Q16 when the Ethane Separation Plant entered the major turnaround, but ‐6% QoQ). Slightly fine‐tune 2017‐18E earnings estimates We negligibly revise up our 2017‐18E NP for PTT by +2% to reflect the upward earnings revisions done on PTTGC and TOP earlier. Our forecasts call for its core profit to mark moderate growth at 11% CAGR during 2017‐ 18E, with its gas business as the core driver, along with a larger contribution from PTTEP (due to an improving margin) and its downstream affiliates. We also slightly raise our 2017E SOTP‐based TP to Bt436 vs. Bt430 previously following the upward revision on the target prices of PTTGC and TOP done earlier. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Core profit (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 2,025,552 94,968 19,936 6.73 (66.91) 10.00 244.07 2015 57.36 5.20 1.58 2.6% 2.9% 44.9%
2016 1,718,846 93,728 94,609 32.68 385.59 16.00 267.11 2016 11.81 4.39 1.45 4.1% 13.0% 29.0%
2017E 2,737,082 106,912 107,692 37.72 15.44 15.09 286.90 2017E 10.23 4.12 1.35 3.9% 13.6% 33.2%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 3,385,938 115,404 115,581 40.49 7.33 16.20 311.72 2018E 9.53 3.57 1.24 4.2% 13.5% 16.6%
2019E 3,859,560 118,961 119,138 41.73 3.08 16.69 336.98 2019E 9.25 3.10 1.15 4.3% 12.9% ‐0.5%
Figure 1: PTT’s 1Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Other extraordinary Items Gn (Ls) from affiliates Minority interests Profit (loss) from discontinued operations Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Interest‐bearing debt / equity (x) BVPS (Bt) ROE (%)
1Q16 386,644 54,609 67,964 (7,232) 4,917 (3,783) 1,432 ‐ 865 (8,714) 30 23,669 22,237 8.23 14.1 17.6 6.1 2.2 5.0 0.9 251.18 13.4
4Q16 476,583 72,630 81,906 (7,174) (6,781) (9,172) 4,998 (5,267) 1,277 (8,589) 530 19,087 18,796 6.53 15.2 17.2 4.0 2.2 6.9 0.8 267.11 10.2
1Q17 509,797 77,330 86,841 (7,777) 9,211 (6,398) 7,754 ‐ 2,048 (17,004) ‐ 46,168 38,413 16.09 15.2 17.0 9.1 2.2 7.5 0.7 278.99 23.7
% YoY 31.9 41.6 27.8 7.5 87.3 69.1 441.4 nm 136.8 95.1 (100.0) 95.1 72.7 95.5
% QoQ 7.0 6.5 6.0 8.4 nm (30.2) 55.1 (100.0) 60.3 98.0 (100.0) 141.9 104.4 146.4
2016 1,718,846 253,208 301,822 (28,887) 6,640 (26,593) 4,473 (4,161) 4,143 (34,663)
2017E 2,737,082 307,067 333,965 (21,816) 14,642 (42,179) 780 ‐ 3,400 (42,245)
% YoY 59.2 21.3 10.6 (24.5) 120.5 58.6 (82.6) (100.0) (17.9) 21.9
YTD (% of 17E) 18.6 25.2 26.0 35.7 62.9 15.2 994.1 nm 60.2 40.3
569 94,609 93,728 32.68 14.73 17.56 5.50 2.18 5.99 0.80 267.11 12.96
‐ 107,692 106,912 37.72 11.22 12.20 3.93 1.74 8.94 0.65 286.90 13.61
(100.0) 13.8 14.1 15.4
nm 42.9 35.9 42.7
Source: KT ZMICO Research
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 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 2,605,062 (2,384,840) 220,222 (95,753) 260,033 135,563 124,469 (33,033) 36,926 128,361 (38,006) 11,610 (34,999) 860 (9,149) 58,678 20.34 20.34 82,066 28.73 11.00
2015 2,025,552 (1,808,624) 216,928 (87,890) 272,374 143,336 129,038 (30,079) 28,361 127,319 (25,071) (5,992) (71,180) 6,032 (11,171) 19,936 6.73 6.73 94,968 33.25 10.00
2016 1,718,846 (1,465,638) 253,208 (80,121) 301,822 128,734 173,088 (28,887) 6,640 150,841 (26,593) 4,473 (3,591) 4,143 (34,663) 94,609 32.68 32.68 93,728 32.81 16.00
2017E 2,737,082 (2,430,014) 307,067 (111,958) 333,965 138,855 195,110 (21,816) 14,642 187,936 (42,179) 780 0 3,400 (42,245) 107,692 37.72 37.72 106,912 37.43 15.09
2018E 3,385,938 (3,036,777) 349,162 (138,075) 350,728 139,641 211,087 (19,805) 14,410 205,691 (47,063) 177 0 3,400 (46,625) 115,581 40.49 40.49 115,404 40.40 16.20
2019E 3,859,560 (3,488,654) 370,905 (156,982) 354,042 140,118 213,923 (16,615) 14,380 211,688 (48,704) 177 0 3,400 (47,422) 119,138 41.73 41.73 118,961 41.65 16.69
2014 316,757 220,142 147,930 1,111,484 454,038 2,250,351 137,118 592,982 1,195,657 28,563 683,287 371,408 2,250,351
2015 346,725 195,484 115,729 1,124,965 391,093 2,173,996 81,094 578,753 1,086,309 28,563 697,147 390,540 2,173,996
2016 392,380 192,362 147,910 1,250,380 249,299 2,232,331 94,583 519,267 1,060,734 28,563 762,948 408,649 2,232,331
2017E 257,548 348,656 298,671 1,255,245 250,422 2,410,542 123,576 406,213 1,140,188 28,563 819,459 450,894 2,410,542
2018E 329,769 443,013 367,219 1,200,839 252,142 2,592,983 143,309 334,684 1,205,103 28,563 890,361 497,519 2,592,983
2019E 411,609 515,045 418,279 1,136,133 254,489 2,735,555 100,385 306,218 1,228,084 28,563 962,529 544,941 2,735,555
2014 58,678 (11,610) 135,563 (86,852) 95,779 (344,007)
2015 19,936 5,992 143,336 18,551 187,816 (130,006)
2016 94,609 (4,473) 128,734 25,011 243,881 (259,126)
2017E 107,692 (780) 138,855 (112,481) 133,287 (143,720)
2018E 115,581 (177) 139,641 (13,186) 241,859 (85,235)
2019E 119,138 (177) 140,118 2,662 261,742 (75,412)
(344,007) 243,751 (31,715) (34,276) 226,855 404,615 156,387 (248,228) (86.95)
(130,006) (70,253) 18,776 (29,991) 53,627 (27,842) 29,968 57,810 20.25
(259,126) (45,997) (22,197) (37,132) 166,224 60,899 45,655 (15,244) (5.34)
(143,720) (84,061) (45,624) (44,401) 49,688 (124,399) (134,832) (10,434) (3.65)
(85,235) (51,796) (43,225) (44,679) 55,297 (84,403) 72,221 156,624 54.87
(75,412) (71,390) (44,022) (46,970) 57,892 (104,490) 81,839 186,330 65.27
2014 (8.4) 19.3 (37.5) 8.5 10.0 4.8 2.3 3.2 29.6
2015 (22.2) 4.7 (66.9) 10.7 13.4 6.4 1.0 4.7 19.7
2016 (15.1) 10.8 385.6 14.7 17.6 10.1 5.5 5.5 17.6
2017E 59.2 10.6 15.4 11.2 12.2 7.1 3.9 3.9 22.4
2018E 23.7 5.0 7.3 10.3 10.4 6.2 3.4 3.4 22.9
2019E 14.0 0.9 3.1 9.6 9.2 5.5 3.1 3.1 23.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TFD, TTL, NMG, NUSA.
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)
Anti‐corruption Progress Indicator
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy DISCLAIMER
This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
Outperform (17E TP Bt436.00)
Company Update
Close Bt386.00
Energy & Utilities May 16, 2017
Earnings upgrade/ Earnings downgrade / Overview unchanged
Record‐high 1Q17 NP Price Performance (%)
Solid earnings growth; PTTOR listing to color PTT’s share price We maintain our Outperform rating on PTT (with the newly‐revised 2017E SOTP‐based TP to Bt436 vs. Bt430 earlier following the upward revision on the target prices of PTTGC and TOP done earlier) given its solid core profit growth continuing in 2017‐18E at 11% CAGR driven by its core gas business and the higher contribution from PTTEP and its downstream affiliates. Meanwhile, the targeted listing of PTT Oil and Retail Business (PTTOR) will color PTT’s share price over the next 6‐12 months. Reported record‐high NP at Bt46.2bn in 1Q17 PTT’s 1Q17 NP made a record high at Bt46.2bn (+95% YoY, +142% QoQ), with substantial forex gain and gain on financial derivatives totaling Bt7.8bn in the quarter. Meanwhile, it posted soaring core profit of Bt38.4bn in 1Q17 (+73% YoY, +104% QoQ), thanks to the better performance of its downstream affiliates and its own GSP business, along with dividend income from mutual funds amounting to Bt4.3bn in the quarter.
Source: SET Smart
Downstream affiliates and its GSP the main drivers in 1Q17 Consensus EPS (Bt)
FY17
FY18
36.421
37.915
3.6%
6.8%
KT ZMICO vs. consensus Share data Reuters / Bloomberg
PTT.BK/PTT TB
Paid‐up Shares (m)
2,856.30
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
1,103.00/31,920.00
Foreign limit / actual (%)
30.00/15.93
52 week High / Low (Bt)
430.00/292.00
Avg. daily T/O (shares 000) NVDR (%)
5,571.00 6.90
Estimated free float (%)
48.87
Beta
1.14
URL
www.pttplc.com
CGR Anti‐corruption
Level 5 (Certified)
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
A higher profit contribution from downstream affiliates was seen in 1Q17, especially PTTGC and TOP, due to the improvement in product spreads (particularly in the case of BZ, butadiene, and MEG) and the negligible stock impact in the quarter (vs. stock loss impact in 1Q16). Meanwhile, PTT’s GSP performance in 1Q17 was driven by the widening product spreads given the higher product prices and low gas cost, as well as the larger sales volume to 1.67mn tons (+12% YoY from 1.5mn tons in 1Q16 when the Ethane Separation Plant entered the major turnaround, but ‐6% QoQ). Slightly fine‐tune 2017‐18E earnings estimates We negligibly revise up our 2017‐18E NP for PTT by +2% to reflect the upward earnings revisions done on PTTGC and TOP earlier. Our forecasts call for its core profit to mark moderate growth at 11% CAGR during 2017‐ 18E, with its gas business as the core driver, along with a larger contribution from PTTEP (due to an improving margin) and its downstream affiliates. We also slightly raise our 2017E SOTP‐based TP to Bt436 vs. Bt430 previously following the upward revision on the target prices of PTTGC and TOP done earlier. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Core profit (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 2,025,552 94,968 19,936 6.73 (66.91) 10.00 244.07 2015 57.36 5.20 1.58 2.6% 2.9% 44.9%
2016 1,718,846 93,728 94,609 32.68 385.59 16.00 267.11 2016 11.81 4.39 1.45 4.1% 13.0% 29.0%
2017E 2,737,082 106,912 107,692 37.72 15.44 15.09 286.90 2017E 10.23 4.12 1.35 3.9% 13.6% 33.2%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 3,385,938 115,404 115,581 40.49 7.33 16.20 311.72 2018E 9.53 3.57 1.24 4.2% 13.5% 16.6%
2019E 3,859,560 118,961 119,138 41.73 3.08 16.69 336.98 2019E 9.25 3.10 1.15 4.3% 12.9% ‐0.5%
Figure 1: PTT’s 1Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Other extraordinary Items Gn (Ls) from affiliates Minority interests Profit (loss) from discontinued operations Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Interest‐bearing debt / equity (x) BVPS (Bt) ROE (%)
1Q16 386,644 54,609 67,964 (7,232) 4,917 (3,783) 1,432 ‐ 865 (8,714) 30 23,669 22,237 8.23 14.1 17.6 6.1 2.2 5.0 0.9 251.18 13.4
4Q16 476,583 72,630 81,906 (7,174) (6,781) (9,172) 4,998 (5,267) 1,277 (8,589) 530 19,087 18,796 6.53 15.2 17.2 4.0 2.2 6.9 0.8 267.11 10.2
1Q17 509,797 77,330 86,841 (7,777) 9,211 (6,398) 7,754 ‐ 2,048 (17,004) ‐ 46,168 38,413 16.09 15.2 17.0 9.1 2.2 7.5 0.7 278.99 23.7
% YoY 31.9 41.6 27.8 7.5 87.3 69.1 441.4 nm 136.8 95.1 (100.0) 95.1 72.7 95.5
% QoQ 7.0 6.5 6.0 8.4 nm (30.2) 55.1 (100.0) 60.3 98.0 (100.0) 141.9 104.4 146.4
2016 1,718,846 253,208 301,822 (28,887) 6,640 (26,593) 4,473 (4,161) 4,143 (34,663)
2017E 2,737,082 307,067 333,965 (21,816) 14,642 (42,179) 780 ‐ 3,400 (42,245)
% YoY 59.2 21.3 10.6 (24.5) 120.5 58.6 (82.6) (100.0) (17.9) 21.9
YTD (% of 17E) 18.6 25.2 26.0 35.7 62.9 15.2 994.1 nm 60.2 40.3
569 94,609 93,728 32.68 14.73 17.56 5.50 2.18 5.99 0.80 267.11 12.96
‐ 107,692 106,912 37.72 11.22 12.20 3.93 1.74 8.94 0.65 286.90 13.61
(100.0) 13.8 14.1 15.4
nm 42.9 35.9 42.7
Source: KT ZMICO Research
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 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 2,605,062 (2,384,840) 220,222 (95,753) 260,033 135,563 124,469 (33,033) 36,926 128,361 (38,006) 11,610 (34,999) 860 (9,149) 58,678 20.34 20.34 82,066 28.73 11.00
2015 2,025,552 (1,808,624) 216,928 (87,890) 272,374 143,336 129,038 (30,079) 28,361 127,319 (25,071) (5,992) (71,180) 6,032 (11,171) 19,936 6.73 6.73 94,968 33.25 10.00
2016 1,718,846 (1,465,638) 253,208 (80,121) 301,822 128,734 173,088 (28,887) 6,640 150,841 (26,593) 4,473 (3,591) 4,143 (34,663) 94,609 32.68 32.68 93,728 32.81 16.00
2017E 2,737,082 (2,430,014) 307,067 (111,958) 333,965 138,855 195,110 (21,816) 14,642 187,936 (42,179) 780 0 3,400 (42,245) 107,692 37.72 37.72 106,912 37.43 15.09
2018E 3,385,938 (3,036,777) 349,162 (138,075) 350,728 139,641 211,087 (19,805) 14,410 205,691 (47,063) 177 0 3,400 (46,625) 115,581 40.49 40.49 115,404 40.40 16.20
2019E 3,859,560 (3,488,654) 370,905 (156,982) 354,042 140,118 213,923 (16,615) 14,380 211,688 (48,704) 177 0 3,400 (47,422) 119,138 41.73 41.73 118,961 41.65 16.69
2014 316,757 220,142 147,930 1,111,484 454,038 2,250,351 137,118 592,982 1,195,657 28,563 683,287 371,408 2,250,351
2015 346,725 195,484 115,729 1,124,965 391,093 2,173,996 81,094 578,753 1,086,309 28,563 697,147 390,540 2,173,996
2016 392,380 192,362 147,910 1,250,380 249,299 2,232,331 94,583 519,267 1,060,734 28,563 762,948 408,649 2,232,331
2017E 257,548 348,656 298,671 1,255,245 250,422 2,410,542 123,576 406,213 1,140,188 28,563 819,459 450,894 2,410,542
2018E 329,769 443,013 367,219 1,200,839 252,142 2,592,983 143,309 334,684 1,205,103 28,563 890,361 497,519 2,592,983
2019E 411,609 515,045 418,279 1,136,133 254,489 2,735,555 100,385 306,218 1,228,084 28,563 962,529 544,941 2,735,555
2014 58,678 (11,610) 135,563 (86,852) 95,779 (344,007)
2015 19,936 5,992 143,336 18,551 187,816 (130,006)
2016 94,609 (4,473) 128,734 25,011 243,881 (259,126)
2017E 107,692 (780) 138,855 (112,481) 133,287 (143,720)
2018E 115,581 (177) 139,641 (13,186) 241,859 (85,235)
2019E 119,138 (177) 140,118 2,662 261,742 (75,412)
(344,007) 243,751 (31,715) (34,276) 226,855 404,615 156,387 (248,228) (86.95)
(130,006) (70,253) 18,776 (29,991) 53,627 (27,842) 29,968 57,810 20.25
(259,126) (45,997) (22,197) (37,132) 166,224 60,899 45,655 (15,244) (5.34)
(143,720) (84,061) (45,624) (44,401) 49,688 (124,399) (134,832) (10,434) (3.65)
(85,235) (51,796) (43,225) (44,679) 55,297 (84,403) 72,221 156,624 54.87
(75,412) (71,390) (44,022) (46,970) 57,892 (104,490) 81,839 186,330 65.27
2014 (8.4) 19.3 (37.5) 8.5 10.0 4.8 2.3 3.2 29.6
2015 (22.2) 4.7 (66.9) 10.7 13.4 6.4 1.0 4.7 19.7
2016 (15.1) 10.8 385.6 14.7 17.6 10.1 5.5 5.5 17.6
2017E 59.2 10.6 15.4 11.2 12.2 7.1 3.9 3.9 22.4
2018E 23.7 5.0 7.3 10.3 10.4 6.2 3.4 3.4 22.9
2019E 14.0 0.9 3.1 9.6 9.2 5.5 3.1 3.1 23.0
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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, TFD, TTL, NMG, NUSA.
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)
Anti‐corruption Progress Indicator
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy DISCLAIMER
This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
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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
