Global Power Synergy - Global Alliance Partners
Global Power Synergy
Underperform (18E TP Bt41.00)
Company Update
Close Bt41.50
Energy & Utilities August 8, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
Solid 2Q17 core earnings Price Performance (%)
Source: SET Smart
FY17
Consensus EPS (Bt)
1.959
2.515
KT ZMICO vs. consensus Share data
5.2%
‐9.7%
Reuters / Bloomberg
FY18
GPSC.BK/GPSC TB
Paid‐up Shares (m)
1,498.30
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
62.00/1,867.00
Foreign limit / actual (%)
49.00/1.50
52 week High / Low (Bt)
41.50/31.00
Avg. daily T/O (shares 000)
2,974.00
NVDR (%)
1.04
Estimated free float (%)
24.91
Beta
0.91
URL
www.gpscgroup.com
CGR
Anti‐corruption
Level 2 (Declared)
Patcharin Karsemarnuntana Analyst, no 17834 [email protected]
Solid fundamentals; but share price has largely priced this in The company’s solid fundamentals as the power flagship of the PTT Group with projected core earnings growth at 10% CAGR in 2017‐18E, ahead of domestic peers at the average of 6% CAGR during the period, have been largely priced in by the current share price, as it is trading at demanding 0.18x 2018E PBV/ROE against the average of 0.14x of domestic peers, with the rolled‐over 2018E SOTP‐based TP of Bt41 being fully valued. As such, we maintain an “Underperform” rating on GPSC. Upbeat 2Q17 NP at Bt815mn GPSC reported 2Q17 NP at Bt815mn (+19% YoY, +9% QoQ), 22% ahead of the street forecast, mainly due to the smaller‐than‐expected selling and administrative expenses and the one‐off Bt66mn insurance compensation for the gas turbine of the Rayong Central Utilities Plant damaged in 3Q16. Higher volume and margin behind solid core earnings in 2Q17 It delivered a solid core profit of Bt751mn in 2Q17, up 14% YoY but flat QoQ. The strong growth YoY was attributable to 1) the increase in the availability payment at Sriracha Power Plant (IPP) in line with the increase in the weight factor; 2) smaller selling and administrative expenses by 20% to Bt163mn; and 3) the higher profit contribution from affiliates, particularly in the case of Nava Nakorn Electricity Generating (NNEG) with its kickoff in early Jun‐16. Meanwhile, the flat performance QoQ was largely blamed on the absence of dividend income from RPCL (vs. Bt120mn in 1Q17) despite the smaller selling and administrative expenses, as well as the higher electricity output and margin at the IRPC Clean Power Phase 1 after its major customer resumed operations from the scheduled maintenance in 1Q17. Earnings estimates slightly revised up; with rolled‐over 2018E TP to Bt41 The company’s 1H17 NP accounted for 51% of our full‐year forecast, with a negligible upward revision by 2% in the year and 2% in 2018E, to reflect 1) the incorporation of Ichinoseki solar power (ISP1) in Japan (20.6MW equity capacity) with the scheduled kickoff in late 2017E; and 2) the one‐off Bt66mn insurance compensation for the gas turbine of the Rayong Central Utilities Plant in 2017E. Our forecasts call for the company’s core profit growth at 10% CAGR during 2017‐18E, mainly driven by the contribution of new projects including BIC‐2 in 2H17E (equity capacity: 29.25MW), as well as IRPC‐CP Phase 2 (equity capacity: 99.4MW) and Ichinoseki Solar Power (equity capacity: 20.6MW) in late‐2017E. At the same time, the Rayong expansion phase (CUP 4) with 45MW equity capacity (~13% capacity increase from the existing fleet CUP 1‐3) and the commercial run target within 2018E is the source of upside risk to our earnings estimates and TP. 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 22,543 2,031 1,906 1.40 (0.20) 0.95 24.03
2016 20,771 2,796 2,700 1.80 28.37 1.15 24.79
2017E 23,375 3,021 3,087 2.06 14.32 1.24 25.67
2018E 27,013 3,397 3,397 2.27 10.06 1.36 26.70
2019E 33,725 4,074 4,074 2.72 19.94 1.63 28.06
2015 29.56 23.79 1.73 2.3% 6.2% 12.3%
2016 23.03 18.66 1.67 2.8% 7.4% 25.4%
2017E 20.14 16.06 1.62 3.0% 8.2% 27.1%
2018E 18.30 13.50 1.55 3.3% 8.7% 23.3%
2019E 15.26 12.29 1.48 3.9% 9.9% 12.3%
66 (0) 2695‐5837
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: GPSC’s 2Q17 earnings results Profit and Loss (Btmn) Year‐end 31 Dec
2Q16
1Q17
2Q17
Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Extraordinary Items
5,583 947 1,055 (104) 48 (70) 29 ‐ 89 (49) 687 657 0.46 17.0 18.9 12.3 3.3 7.1 0.4 24.5 7.5
5,389 790 913 (96) 197 (47) 1 ‐ 111 (15) 750 749 0.50 14.7 16.9 13.9 2.5 6.2 0.4 25.3 7.9
5,483 939 1,099 (100) 72 (63) (2) 66 110 (44) 815 751 0.54 17.1 20.0 14.9 2.3 7.7 0.4 25.1 8.7
Gn (Ls) from affiliates
Minority interests 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 (%)
% YoY (1.8) (0.8) 4.1 (3.5) 50.2 (9.2) nm nm 23.5 (9.9) 18.7 14.3 17.4
% QoQ 1.7 18.9 20.3 4.2 (63.6) 34.8 nm nm (1.0) 201.8 8.7 0.3 8.0
1H16
1H17
11,088 1,831 2,081 (209) 285 (96) 38 0 175 (92) 1,557 1,519 1.04 16.5 18.8 14.0 3.3 7.0 0.4 24.5 8.5
10,871 1,729 2,012 (197) 269 (110) (1) 66 221 (58) 1,565 1,499 1.04 15.9 18.5 14.4 2.3 7.0 0.4 25.1 8.3
% YoY (2.0) (5.6) (3.3) (5.9) (5.6) 14.6 nm nm 26.4 (36.4) 0.5 (1.3) 0.0
2016
2017E
20,771 3,316 3,782 (418) 664 (140) 4 (100) 346 (172) 2,700 2,796 1.80 16.0 18.2 13.0 2.8 6.0 0.4 24.8 7.4
23,375 3,593 4,450 (671) 470 (228) ‐ 66 778 (190) 3,087 3,021 2.06 15.4 19.0 13.2 2.7 4.3 0.5 25.7 8.2
Source: KT ZMICO Research
Figure 2: GPSC’s committed capacity growth in the pipeline Source: The company
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
% YoY 12.5 8.3 17.7 60.7 (29.2) 62.4 (100.0) nm 124.8 10.6 14.3 8.0 14.3
YTD (% 17E) 46.5 48.1 45.2 29.3 57.2 48.2 nm 100.0 28.4 30.6 50.7 49.6 50.5
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 23,755 (21,665) 2,090 (410) 2,722 1,043 1,680 (470) 135 1,345 (27) (8) 0 268 3 1,581 1.41 1.41 1,588 1.41 0.10
2015 22,543 (20,270) 2,273 (591) 2,764 1,082 1,682 (394) 478 1,765 (90) (46) (79) 339 17 1,906 1.40 1.27 2,031 1.36 0.95
2016 20,771 (17,455) 3,316 (800) 3,782 1,266 2,516 (418) 664 2,762 (140) 4 (100) 346 (172) 2,700 1.80 1.80 2,796 1.87 1.15
2017E 23,375 (19,783) 3,593 (731) 4,450 1,588 2,862 (671) 470 2,661 (228) 0 66 778 (190) 3,087 2.06 2.06 3,021 2.02 1.24
2018E 27,013 (22,788) 4,226 (768) 5,200 1,743 3,458 (626) 450 3,282 (266) 0 0 801 (419) 3,397 2.27 2.27 3,397 2.27 1.36
2019E 33,725 (29,273) 4,452 (838) 5,373 1,760 3,614 (540) 400 3,474 (528) 0 0 1,545 (416) 4,074 2.72 2.72 4,074 2.72 1.63
2014 3,603 3,013 359 20,048 15,909 42,932 1,595 11,197 16,914 11,237 25,285 733 42,932
2015 11,421 2,849 406 23,467 17,840 55,983 1,595 13,394 18,855 14,983 36,006 1,122 55,983
2016 7,813 2,180 458 26,129 21,449 58,028 1,913 14,295 19,274 14,983 37,150 1,604 58,028
2017E 10,771 1,921 271 30,775 20,464 64,203 2,045 18,014 23,943 14,983 38,466 1,795 64,203
2018E 9,973 2,220 312 29,449 22,534 64,489 2,178 15,835 22,265 14,983 40,011 2,213 64,489
2019E 11,999 2,772 401 28,110 22,158 65,439 2,118 13,717 20,763 14,983 42,047 2,630 65,439
2014 1,581 8 1,043 549 3,180 (7,370)
2015 1,906 46 1,082 (1,358) 1,676 (5,438)
2016 2,700 (4) 1,266 193 4,155 (5,510)
2017E 3,087 0 1,588 767 5,442 (8,260)
2018E 3,397 0 1,743 (254) 4,886 (2,904)
2019E 4,074 0 1,760 (998) 4,836 (439)
(7,370) (207) 48 0 656 497 (3,693) (4,190) (3.73)
(5,438) 2,197 9,283 (112) 212 11,580 7,818 (3,762) (2.51)
(5,510) 1,219 41 (1,423) (2,090) (2,253) (3,608) (1,355) (0.90)
(8,260) 3,850 537 (1,723) 3,112 5,776 2,958 (2,818) (1.88)
(2,904) (2,045) 346 (1,852) 772 (2,779) (797) 1,982 1.32
(439) (2,178) 1,090 (2,038) 755 (2,372) 2,025 4,397 2.93
2014 (7.6) 2.2 6.6 8.8 11.5 7.1 6.7 6.7 2.0
2015 (5.1) 1.5 (0.2) 10.1 12.3 7.5 8.5 9.0 5.1
2016 (7.9) 36.8 28.4 16.0 18.2 12.1 13.0 13.5 5.1
2017E 12.5 17.7 14.3 15.4 19.0 12.2 13.2 12.9 8.6
2018E 15.6 16.9 10.1 15.6 19.3 12.8 12.6 12.6 8.1
2019E 24.8 3.3 19.9 13.2 15.9 10.7 12.1 12.1 15.2
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
Underperform (18E TP Bt41.00)
Company Update
Close Bt41.50
Energy & Utilities August 8, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
Solid 2Q17 core earnings Price Performance (%)
Source: SET Smart
FY17
Consensus EPS (Bt)
1.959
2.515
KT ZMICO vs. consensus Share data
5.2%
‐9.7%
Reuters / Bloomberg
FY18
GPSC.BK/GPSC TB
Paid‐up Shares (m)
1,498.30
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
62.00/1,867.00
Foreign limit / actual (%)
49.00/1.50
52 week High / Low (Bt)
41.50/31.00
Avg. daily T/O (shares 000)
2,974.00
NVDR (%)
1.04
Estimated free float (%)
24.91
Beta
0.91
URL
www.gpscgroup.com
CGR
Anti‐corruption
Level 2 (Declared)
Patcharin Karsemarnuntana Analyst, no 17834 [email protected]
Solid fundamentals; but share price has largely priced this in The company’s solid fundamentals as the power flagship of the PTT Group with projected core earnings growth at 10% CAGR in 2017‐18E, ahead of domestic peers at the average of 6% CAGR during the period, have been largely priced in by the current share price, as it is trading at demanding 0.18x 2018E PBV/ROE against the average of 0.14x of domestic peers, with the rolled‐over 2018E SOTP‐based TP of Bt41 being fully valued. As such, we maintain an “Underperform” rating on GPSC. Upbeat 2Q17 NP at Bt815mn GPSC reported 2Q17 NP at Bt815mn (+19% YoY, +9% QoQ), 22% ahead of the street forecast, mainly due to the smaller‐than‐expected selling and administrative expenses and the one‐off Bt66mn insurance compensation for the gas turbine of the Rayong Central Utilities Plant damaged in 3Q16. Higher volume and margin behind solid core earnings in 2Q17 It delivered a solid core profit of Bt751mn in 2Q17, up 14% YoY but flat QoQ. The strong growth YoY was attributable to 1) the increase in the availability payment at Sriracha Power Plant (IPP) in line with the increase in the weight factor; 2) smaller selling and administrative expenses by 20% to Bt163mn; and 3) the higher profit contribution from affiliates, particularly in the case of Nava Nakorn Electricity Generating (NNEG) with its kickoff in early Jun‐16. Meanwhile, the flat performance QoQ was largely blamed on the absence of dividend income from RPCL (vs. Bt120mn in 1Q17) despite the smaller selling and administrative expenses, as well as the higher electricity output and margin at the IRPC Clean Power Phase 1 after its major customer resumed operations from the scheduled maintenance in 1Q17. Earnings estimates slightly revised up; with rolled‐over 2018E TP to Bt41 The company’s 1H17 NP accounted for 51% of our full‐year forecast, with a negligible upward revision by 2% in the year and 2% in 2018E, to reflect 1) the incorporation of Ichinoseki solar power (ISP1) in Japan (20.6MW equity capacity) with the scheduled kickoff in late 2017E; and 2) the one‐off Bt66mn insurance compensation for the gas turbine of the Rayong Central Utilities Plant in 2017E. Our forecasts call for the company’s core profit growth at 10% CAGR during 2017‐18E, mainly driven by the contribution of new projects including BIC‐2 in 2H17E (equity capacity: 29.25MW), as well as IRPC‐CP Phase 2 (equity capacity: 99.4MW) and Ichinoseki Solar Power (equity capacity: 20.6MW) in late‐2017E. At the same time, the Rayong expansion phase (CUP 4) with 45MW equity capacity (~13% capacity increase from the existing fleet CUP 1‐3) and the commercial run target within 2018E is the source of upside risk to our earnings estimates and TP. 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 22,543 2,031 1,906 1.40 (0.20) 0.95 24.03
2016 20,771 2,796 2,700 1.80 28.37 1.15 24.79
2017E 23,375 3,021 3,087 2.06 14.32 1.24 25.67
2018E 27,013 3,397 3,397 2.27 10.06 1.36 26.70
2019E 33,725 4,074 4,074 2.72 19.94 1.63 28.06
2015 29.56 23.79 1.73 2.3% 6.2% 12.3%
2016 23.03 18.66 1.67 2.8% 7.4% 25.4%
2017E 20.14 16.06 1.62 3.0% 8.2% 27.1%
2018E 18.30 13.50 1.55 3.3% 8.7% 23.3%
2019E 15.26 12.29 1.48 3.9% 9.9% 12.3%
66 (0) 2695‐5837
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: GPSC’s 2Q17 earnings results Profit and Loss (Btmn) Year‐end 31 Dec
2Q16
1Q17
2Q17
Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Extraordinary Items
5,583 947 1,055 (104) 48 (70) 29 ‐ 89 (49) 687 657 0.46 17.0 18.9 12.3 3.3 7.1 0.4 24.5 7.5
5,389 790 913 (96) 197 (47) 1 ‐ 111 (15) 750 749 0.50 14.7 16.9 13.9 2.5 6.2 0.4 25.3 7.9
5,483 939 1,099 (100) 72 (63) (2) 66 110 (44) 815 751 0.54 17.1 20.0 14.9 2.3 7.7 0.4 25.1 8.7
Gn (Ls) from affiliates
Minority interests 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 (%)
% YoY (1.8) (0.8) 4.1 (3.5) 50.2 (9.2) nm nm 23.5 (9.9) 18.7 14.3 17.4
% QoQ 1.7 18.9 20.3 4.2 (63.6) 34.8 nm nm (1.0) 201.8 8.7 0.3 8.0
1H16
1H17
11,088 1,831 2,081 (209) 285 (96) 38 0 175 (92) 1,557 1,519 1.04 16.5 18.8 14.0 3.3 7.0 0.4 24.5 8.5
10,871 1,729 2,012 (197) 269 (110) (1) 66 221 (58) 1,565 1,499 1.04 15.9 18.5 14.4 2.3 7.0 0.4 25.1 8.3
% YoY (2.0) (5.6) (3.3) (5.9) (5.6) 14.6 nm nm 26.4 (36.4) 0.5 (1.3) 0.0
2016
2017E
20,771 3,316 3,782 (418) 664 (140) 4 (100) 346 (172) 2,700 2,796 1.80 16.0 18.2 13.0 2.8 6.0 0.4 24.8 7.4
23,375 3,593 4,450 (671) 470 (228) ‐ 66 778 (190) 3,087 3,021 2.06 15.4 19.0 13.2 2.7 4.3 0.5 25.7 8.2
Source: KT ZMICO Research
Figure 2: GPSC’s committed capacity growth in the pipeline Source: The company
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
% YoY 12.5 8.3 17.7 60.7 (29.2) 62.4 (100.0) nm 124.8 10.6 14.3 8.0 14.3
YTD (% 17E) 46.5 48.1 45.2 29.3 57.2 48.2 nm 100.0 28.4 30.6 50.7 49.6 50.5
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 23,755 (21,665) 2,090 (410) 2,722 1,043 1,680 (470) 135 1,345 (27) (8) 0 268 3 1,581 1.41 1.41 1,588 1.41 0.10
2015 22,543 (20,270) 2,273 (591) 2,764 1,082 1,682 (394) 478 1,765 (90) (46) (79) 339 17 1,906 1.40 1.27 2,031 1.36 0.95
2016 20,771 (17,455) 3,316 (800) 3,782 1,266 2,516 (418) 664 2,762 (140) 4 (100) 346 (172) 2,700 1.80 1.80 2,796 1.87 1.15
2017E 23,375 (19,783) 3,593 (731) 4,450 1,588 2,862 (671) 470 2,661 (228) 0 66 778 (190) 3,087 2.06 2.06 3,021 2.02 1.24
2018E 27,013 (22,788) 4,226 (768) 5,200 1,743 3,458 (626) 450 3,282 (266) 0 0 801 (419) 3,397 2.27 2.27 3,397 2.27 1.36
2019E 33,725 (29,273) 4,452 (838) 5,373 1,760 3,614 (540) 400 3,474 (528) 0 0 1,545 (416) 4,074 2.72 2.72 4,074 2.72 1.63
2014 3,603 3,013 359 20,048 15,909 42,932 1,595 11,197 16,914 11,237 25,285 733 42,932
2015 11,421 2,849 406 23,467 17,840 55,983 1,595 13,394 18,855 14,983 36,006 1,122 55,983
2016 7,813 2,180 458 26,129 21,449 58,028 1,913 14,295 19,274 14,983 37,150 1,604 58,028
2017E 10,771 1,921 271 30,775 20,464 64,203 2,045 18,014 23,943 14,983 38,466 1,795 64,203
2018E 9,973 2,220 312 29,449 22,534 64,489 2,178 15,835 22,265 14,983 40,011 2,213 64,489
2019E 11,999 2,772 401 28,110 22,158 65,439 2,118 13,717 20,763 14,983 42,047 2,630 65,439
2014 1,581 8 1,043 549 3,180 (7,370)
2015 1,906 46 1,082 (1,358) 1,676 (5,438)
2016 2,700 (4) 1,266 193 4,155 (5,510)
2017E 3,087 0 1,588 767 5,442 (8,260)
2018E 3,397 0 1,743 (254) 4,886 (2,904)
2019E 4,074 0 1,760 (998) 4,836 (439)
(7,370) (207) 48 0 656 497 (3,693) (4,190) (3.73)
(5,438) 2,197 9,283 (112) 212 11,580 7,818 (3,762) (2.51)
(5,510) 1,219 41 (1,423) (2,090) (2,253) (3,608) (1,355) (0.90)
(8,260) 3,850 537 (1,723) 3,112 5,776 2,958 (2,818) (1.88)
(2,904) (2,045) 346 (1,852) 772 (2,779) (797) 1,982 1.32
(439) (2,178) 1,090 (2,038) 755 (2,372) 2,025 4,397 2.93
2014 (7.6) 2.2 6.6 8.8 11.5 7.1 6.7 6.7 2.0
2015 (5.1) 1.5 (0.2) 10.1 12.3 7.5 8.5 9.0 5.1
2016 (7.9) 36.8 28.4 16.0 18.2 12.1 13.0 13.5 5.1
2017E 12.5 17.7 14.3 15.4 19.0 12.2 13.2 12.9 8.6
2018E 15.6 16.9 10.1 15.6 19.3 12.8 12.6 12.6 8.1
2019E 24.8 3.3 19.9 13.2 15.9 10.7 12.1 12.1 15.2
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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
