MC Group - Global Alliance Partners
MC Group Buy (16E TP Bt16.60)
Company Update
Close Bt12.10
Commerce March 3, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
Focus is on freestanding shops Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.979
1.101
KT ZMICO vs. consensus Share data
‐0.9%
‐0.1%
Reuters / Bloomberg
MC.BK/MC TB
Paid‐up Shares (m)
800.00
Par (Bt)
0.50
Market cap (Bt bn / US$ m)
10.00/272.00
Foreign limit / actual (%)
49.00/22.29
52 week High / Low (Bt)
16.10/11.10
Avg. daily T/O (shares 000)
907.00
NVDR (%)
2.01
Estimated free float (%)
31.72
Beta
0.83
URL
www.mcgroupnet.com
CGR
Anti‐corruption
Level 3A (Established)
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
BUY maintained We keep our BUY rating unchanged for MC. Its continued expansion of channel coverage alongside product line extension with active marketing campaigns will help to support growth. The improvement of internal management will be another factor to spur a better performance. Moreover, MC remains attractive due to an estimated yield of 6‐7%. Aggressive guidance for 2016 MC shared its 2016 financial guidance with a sales growth target of 15%. This will be driven by its continued points of sales expansion and a greater variety of product offerings. MC plans to spend Bt100mn on additional points of sales, mainly on freestanding shops (FSS) and shops in PTT gas stations. Greater product variety including top wear under the McT brand, accessories and luggage will be offered in a bid to increase visits. Apart from conventional channels, MC will put more focus on e‐ commerce channels through its own officially re‐launched website, www.mcshop.com. Its internal improvement including new warehouse management and an ERP system should lead to higher sales with a better margin. This will also help the company to improve its inventory management. Further expansion in international markets MC has further expanded its coverage in CLMV countries, with a total of 23 points of sales by year‐end 2015. MC is also in talks with its partner in Vietnam. If a contract is signed, six more points of sales will be added from two currently. MC targets to increase the contribution from overseas markets to 5‐10% from 1% currently. Maintain conservative earnings estimates MC disclosed that its SSSG, which hit a record high at 19% in 4Q15, continued to post single‐digit growth in the first two months of this year. This was mainly derived from its FSS. With the slow pace of domestic spending recovery, we keep our conservative assumptions unchanged. Its sales and earnings are expected to grow 8% and 6% in 2016, respectively. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) P/BV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 3,470 712 0.89 0.89 ‐15.0% 0.80 4.91 2014 15.96 11.03 2.89 5.6% 18.7% net cash
2015 3,895 732 0.92 0.92 2.9% 0.75 5.09 2015 13.11 9.95 2.36 6.3% 18.3% net cash
2016E 4,188 779 0.97 0.97 6.4% 0.68 5.29 2016E 12.43 9.48 2.29 5.6% 18.8% net cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2017E 4,681 881 1.10 1.10 13.2% 0.77 5.68 2017E 10.98 7.99 2.13 6.4% 20.1% net cash
2018E 5,202 1,003 1.25 1.25 13.8% 0.88 6.13 2018E 9.65 6.77 1.98 7.3% 21.2% net cash
Figure 1: Operating summary 1,400
Revenue Breakdown by distribution channels (Btmn)
1,200
1000
1,000
$51
$13
$40 $4
600 426
$7
$26
424
800
396 443 412 330
600
344
400 300
747 419 406 364 389
498
400 407
18
21
22
23
22
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
9 548 550 542 544 540 526 516 496 509 430
259 272 281 288
Free standing shops
Others
Modern trade
Mobile unit
International
Profitability 70% 60%
YoY
TSS vs SSSG
50%
30% 40%
20% 30%
10% 20%
0% 10%
‐10% 0% 1Q12
‐20% 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q15 Total system growth
Same store sales growth
23
100 130 140 153 187 204 219 236 251 0 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q15
0 Modern trade
7
14
18
200 448 412 418
242 226 249
Free standing shops
7
500
410 381
200
10
700 $44
$34 498
567
Distributional Channels
900
531 $48 $53
$26
800
400
$11
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
Gros s ma rgi n
Gros s ma rgi n_MC
EBITDA ma rgi n
EBITDA ma rgi n_MC
Source: The Company and KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 2: PER and PBV band
PER (x) 25.00
+ 2SD
PBV (x) 5.00
23.00 21.00
+ 1SD
4.00
19.00 Average
17.00
3.00
15.00
+ 2 SD + 1 SD Average
‐ 1SD
13.00
2.00
11.00
‐ 2 SD
9.00 Ju l‐1 3 S ep ‐1 3 N o v ‐1 3 Jan ‐1 4 M ar ‐1 4 Ju n ‐1 4 A u g‐1 4 O c t‐1 4 D ec ‐1 4 F eb ‐1 5 M ay ‐1 5 Ju l‐1 5 S ep ‐1 5 N o v ‐1 5 F eb ‐1 6
Ju l‐1 3 S ep ‐1 3 N o v ‐1 3 Jan ‐1 4 M ar ‐1 4 M ay ‐1 4 A u g‐1 4 O c t‐1 4 D ec ‐1 4 F eb ‐1 5 A p r ‐1 5 Ju n ‐1 5 S ep ‐1 5 N o v ‐1 5 Jan ‐1 6
1.00
7.00
Source: Bloomberg, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
Financial Summary 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 Minority interests Net profit Fully diluted EPS (Bt) Dividend (Bt)
2014 3,470 (1,582) 1,888 (1,151) 893 (126) 805 (6) 68 799 (71) (16) 712 0.89 0.80
2015 3,895 (1,709) 2,186 (1,452) 895 (129) 790 (6) 56 791 (47) (12) 732 0.92 0.75
2016E 4,188 (1,790) 2,398 (1,577) 957 (103) 869 (4) 48 872 (64) (29) 779 0.97 0.68
2017E 4,681 (2,002) 2,679 (1,722) 1,111 (117) 1,013 (3) 56 1,018 (98) (39) 881 1.10 0.77
2018E 5,202 (2,224) 2,978 (1,885) 1,265 (130) 1,170 (3) 77 1,176 (133) (39) 1,003 1.25 0.88
BALANCE SHEET (Btm) Cash and equivalents Inventories PP&E‐net Total assets ST debt & current portion Long‐term debt Total liabilities Shareholder equity Total liab. & shareholder equity
2014 1,699 1,536 448 4,857 182 3 932 3,819 4,857
2015 877 2,316 445 5,100 184 0 1,024 3,957 5,100
2016E 691 2,158 1,213 5,318 80 0 1,010 4,200 5,239
2017E 883 2,068 1,361 5,676 80 0 1,036 4,508 5,579
2018E 1,192 1,886 1,496 6,055 80 0 1,054 4,860 5,954
CASH FLOW (Btm) EBIT Depreciation & amortization Change in working capital FX, non‐cash adjustment & others 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)
2014 805 126 579 (858) 651 (239) (67) (306) 53 0 (504) (7) (458) (113) 412 0.52
2015 790 129 1,046 (1,951) 14 (150) 1,085 935 2 0 (600) (9) (607) 342 ‐136 ‐0.17
2016E 869 103 2,053 (1,883) 1,142 (882) 577 (305) (103) 0 (538) (0) (642) 195 260 0.33
2017E 1,013 117 2,313 (2,397) 1,046 (276) (3) (280) 0 0 (574) 0 (574) 192 769 0.96
2018E 1,170 130 2,964 (3,025) 1,239 (277) (3) (280) 0 0 (651) 0 (651) 308 963 1.20
PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Effective tax rate (%)
2014 16.7 0.8 (15.0) 54.4 25.7 21.2 20.5 9.7
2015 12.3 0.2 2.9 56.1 23.0 18.9 18.8 9.0
2016E 7.5 6.9 6.4 57.3 22.9 19.6 18.6 7.0
2017E 11.8 16.1 13.2 57.2 23.7 20.4 18.8 10.0
2018E 11.1 13.9 13.8 57.3 24.3 21.0 19.3 10.0
226 net cash net cash 131.26
225 net cash net cash 141.26
123 net cash net cash 224.71
124 net cash net cash 337.63
125 net cash net cash 389.87
FINANCIAL QUALITY Total interest bearing debt (Btm) Net debt (Btm) Net debt to equity (x) Interest coverage (x)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
Note: KT ZMICO is a partnership between KTB and ZMICO. 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, PACE, PLE, TPOLY. KT ZMICO is a co‐underwriter of TKN.
Anti‐corruption Progress Indicator
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Company Update
Close Bt12.10
Commerce March 3, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
Focus is on freestanding shops Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.979
1.101
KT ZMICO vs. consensus Share data
‐0.9%
‐0.1%
Reuters / Bloomberg
MC.BK/MC TB
Paid‐up Shares (m)
800.00
Par (Bt)
0.50
Market cap (Bt bn / US$ m)
10.00/272.00
Foreign limit / actual (%)
49.00/22.29
52 week High / Low (Bt)
16.10/11.10
Avg. daily T/O (shares 000)
907.00
NVDR (%)
2.01
Estimated free float (%)
31.72
Beta
0.83
URL
www.mcgroupnet.com
CGR
Anti‐corruption
Level 3A (Established)
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
BUY maintained We keep our BUY rating unchanged for MC. Its continued expansion of channel coverage alongside product line extension with active marketing campaigns will help to support growth. The improvement of internal management will be another factor to spur a better performance. Moreover, MC remains attractive due to an estimated yield of 6‐7%. Aggressive guidance for 2016 MC shared its 2016 financial guidance with a sales growth target of 15%. This will be driven by its continued points of sales expansion and a greater variety of product offerings. MC plans to spend Bt100mn on additional points of sales, mainly on freestanding shops (FSS) and shops in PTT gas stations. Greater product variety including top wear under the McT brand, accessories and luggage will be offered in a bid to increase visits. Apart from conventional channels, MC will put more focus on e‐ commerce channels through its own officially re‐launched website, www.mcshop.com. Its internal improvement including new warehouse management and an ERP system should lead to higher sales with a better margin. This will also help the company to improve its inventory management. Further expansion in international markets MC has further expanded its coverage in CLMV countries, with a total of 23 points of sales by year‐end 2015. MC is also in talks with its partner in Vietnam. If a contract is signed, six more points of sales will be added from two currently. MC targets to increase the contribution from overseas markets to 5‐10% from 1% currently. Maintain conservative earnings estimates MC disclosed that its SSSG, which hit a record high at 19% in 4Q15, continued to post single‐digit growth in the first two months of this year. This was mainly derived from its FSS. With the slow pace of domestic spending recovery, we keep our conservative assumptions unchanged. Its sales and earnings are expected to grow 8% and 6% in 2016, respectively. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) P/BV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 3,470 712 0.89 0.89 ‐15.0% 0.80 4.91 2014 15.96 11.03 2.89 5.6% 18.7% net cash
2015 3,895 732 0.92 0.92 2.9% 0.75 5.09 2015 13.11 9.95 2.36 6.3% 18.3% net cash
2016E 4,188 779 0.97 0.97 6.4% 0.68 5.29 2016E 12.43 9.48 2.29 5.6% 18.8% net cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2017E 4,681 881 1.10 1.10 13.2% 0.77 5.68 2017E 10.98 7.99 2.13 6.4% 20.1% net cash
2018E 5,202 1,003 1.25 1.25 13.8% 0.88 6.13 2018E 9.65 6.77 1.98 7.3% 21.2% net cash
Figure 1: Operating summary 1,400
Revenue Breakdown by distribution channels (Btmn)
1,200
1000
1,000
$51
$13
$40 $4
600 426
$7
$26
424
800
396 443 412 330
600
344
400 300
747 419 406 364 389
498
400 407
18
21
22
23
22
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
9 548 550 542 544 540 526 516 496 509 430
259 272 281 288
Free standing shops
Others
Modern trade
Mobile unit
International
Profitability 70% 60%
YoY
TSS vs SSSG
50%
30% 40%
20% 30%
10% 20%
0% 10%
‐10% 0% 1Q12
‐20% 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q15 Total system growth
Same store sales growth
23
100 130 140 153 187 204 219 236 251 0 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q15
0 Modern trade
7
14
18
200 448 412 418
242 226 249
Free standing shops
7
500
410 381
200
10
700 $44
$34 498
567
Distributional Channels
900
531 $48 $53
$26
800
400
$11
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
Gros s ma rgi n
Gros s ma rgi n_MC
EBITDA ma rgi n
EBITDA ma rgi n_MC
Source: The Company and KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 2: PER and PBV band
PER (x) 25.00
+ 2SD
PBV (x) 5.00
23.00 21.00
+ 1SD
4.00
19.00 Average
17.00
3.00
15.00
+ 2 SD + 1 SD Average
‐ 1SD
13.00
2.00
11.00
‐ 2 SD
9.00 Ju l‐1 3 S ep ‐1 3 N o v ‐1 3 Jan ‐1 4 M ar ‐1 4 Ju n ‐1 4 A u g‐1 4 O c t‐1 4 D ec ‐1 4 F eb ‐1 5 M ay ‐1 5 Ju l‐1 5 S ep ‐1 5 N o v ‐1 5 F eb ‐1 6
Ju l‐1 3 S ep ‐1 3 N o v ‐1 3 Jan ‐1 4 M ar ‐1 4 M ay ‐1 4 A u g‐1 4 O c t‐1 4 D ec ‐1 4 F eb ‐1 5 A p r ‐1 5 Ju n ‐1 5 S ep ‐1 5 N o v ‐1 5 Jan ‐1 6
1.00
7.00
Source: Bloomberg, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
Financial Summary 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 Minority interests Net profit Fully diluted EPS (Bt) Dividend (Bt)
2014 3,470 (1,582) 1,888 (1,151) 893 (126) 805 (6) 68 799 (71) (16) 712 0.89 0.80
2015 3,895 (1,709) 2,186 (1,452) 895 (129) 790 (6) 56 791 (47) (12) 732 0.92 0.75
2016E 4,188 (1,790) 2,398 (1,577) 957 (103) 869 (4) 48 872 (64) (29) 779 0.97 0.68
2017E 4,681 (2,002) 2,679 (1,722) 1,111 (117) 1,013 (3) 56 1,018 (98) (39) 881 1.10 0.77
2018E 5,202 (2,224) 2,978 (1,885) 1,265 (130) 1,170 (3) 77 1,176 (133) (39) 1,003 1.25 0.88
BALANCE SHEET (Btm) Cash and equivalents Inventories PP&E‐net Total assets ST debt & current portion Long‐term debt Total liabilities Shareholder equity Total liab. & shareholder equity
2014 1,699 1,536 448 4,857 182 3 932 3,819 4,857
2015 877 2,316 445 5,100 184 0 1,024 3,957 5,100
2016E 691 2,158 1,213 5,318 80 0 1,010 4,200 5,239
2017E 883 2,068 1,361 5,676 80 0 1,036 4,508 5,579
2018E 1,192 1,886 1,496 6,055 80 0 1,054 4,860 5,954
CASH FLOW (Btm) EBIT Depreciation & amortization Change in working capital FX, non‐cash adjustment & others 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)
2014 805 126 579 (858) 651 (239) (67) (306) 53 0 (504) (7) (458) (113) 412 0.52
2015 790 129 1,046 (1,951) 14 (150) 1,085 935 2 0 (600) (9) (607) 342 ‐136 ‐0.17
2016E 869 103 2,053 (1,883) 1,142 (882) 577 (305) (103) 0 (538) (0) (642) 195 260 0.33
2017E 1,013 117 2,313 (2,397) 1,046 (276) (3) (280) 0 0 (574) 0 (574) 192 769 0.96
2018E 1,170 130 2,964 (3,025) 1,239 (277) (3) (280) 0 0 (651) 0 (651) 308 963 1.20
PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Effective tax rate (%)
2014 16.7 0.8 (15.0) 54.4 25.7 21.2 20.5 9.7
2015 12.3 0.2 2.9 56.1 23.0 18.9 18.8 9.0
2016E 7.5 6.9 6.4 57.3 22.9 19.6 18.6 7.0
2017E 11.8 16.1 13.2 57.2 23.7 20.4 18.8 10.0
2018E 11.1 13.9 13.8 57.3 24.3 21.0 19.3 10.0
226 net cash net cash 131.26
225 net cash net cash 141.26
123 net cash net cash 224.71
124 net cash net cash 337.63
125 net cash net cash 389.87
FINANCIAL QUALITY Total interest bearing debt (Btm) Net debt (Btm) Net debt to equity (x) Interest coverage (x)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
Note: KT ZMICO is a partnership between KTB and ZMICO. 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, PACE, PLE, TPOLY. KT ZMICO is a co‐underwriter of TKN.
Anti‐corruption Progress Indicator
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 5
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
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Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
