MC Group - Global Alliance Partners
MC Group Buy (16E TP Bt16.60)
Earnings Review
Close Bt11.70
Commerce
February 29, 2016
Beat forecast/Below forecast/In line 4Q15 results above view Price Performance (%)
BUY maintained MC posted a better‐than‐expected NP in 2015 amidst fragile domestic spending. This was due to a combination of its successful promotional campaign and the government’s stimulus package during the high season. Its marketing strategies and internal control management will help its 2016E earnings to grow. Thus, our BUY rating is maintained with the 2016E TP of Bt16.60, pegged with average PER of 17x. 4Q15 earnings above view MC posted a net profit (NP) of Bt250mn (EPS: Bt0.31) in 4Q15. This beat our estimate and the street forecast by 14% and 17%, respectively, due to higher sales with a better share of profit from associates. 4Q15: the best quarter of the year MC’s 4Q15 NP surged 28%YoY and 1.2x QoQ. The successful promotional campaign during its high season brought its same‐store‐sales growth to 19%YoY. This combined with continued expansion of its points of sales boosted its top line by 23%YoY and 60%QoQ to Bt1.3bn. With more efficiency on cost control regarding the production line improvement project, its gross margin stood at 54.1%, on par with 4Q14. This was sufficient to cover the escalation in SG&A expenses. Thus, its EBITDA margin increased to 23.8% from 23.4% in 4Q14 and 19.7% in 3Q15.
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.980
1.101
KT ZMICO vs. consensus Share data
0.0%
2.6%
Reuters / Bloomberg
MC.BK/MC TB
Paid‐up Shares (m)
800.00
Par (Bt)
0.50
Market cap (Bt bn / US$ m)
9.00/262.00
Foreign limit / actual (%)
49.00/22.49
52 week High / Low (Bt)
16.10/11.10
Avg. daily T/O (shares 000)
895.00
NVDR (%)
2.01
Estimated free float (%)
31.72
Beta
0.82
URL
www.mcgroupnet.com
CGR
Anti‐corruption
Level 3A (Established)
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
Gained good traction in 2015 MC ended 2015 with a NP of Bt732mn (EPS: Bt0.92), increasing 3%YoY amidst sluggish domestic spending. Its sales reached a record high of Bt3.9bn (+12%YoY) thanks to 1) points of sales expansion (+48 outlets domestically); 2) the introduction of new product lines (i.e., luggage, top wear); and 3) active promotional campaigns. The better GPM outweighed skyrocketing SG&A expenses (to 37.3% to sales from 33.2%). With its strong financial position, MC will pay a DPS of Bt0.40 for the 2H15 performance, representing a 3.5% yield for the period. The XD sign will be posted on 28 April, with the payment date set for 19 May. Earnings forecasts unchanged We keep our 2016E‐2017E earnings forecasts unchanged. We like MC’s fast‐moving strategies including offering a greater variety of products and active marketing campaigns. This will help MC continue to expand its earnings growth. 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 (%)
2013 2,973 733 1.05 1.05 ‐26.9% 0.73 4.63 2013 11.08 8.60 2.51 6.3% 32.5% net cash
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 9.67 2.36 6.3% 18.3% net cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2016E 4,149 782 0.98 0.98 6.8% 0.78 5.33 2016E 11.67 7.66 2.14 6.9% 18.7% net cash
2017E 4,628 907 1.13 1.13 16.1% 0.91 5.63 2017E 10.05 6.52 2.03 8.0% 20.7% net cash
Figure 1: Earnings review Profit and Loss Statement (Btmn) Fiscal Year‐Ended Dec. Revenue Gross Profit SG&A expenses EBITDA Interest Expense Other income Income tax Net profit (loss) Core profit (loss) Reported EPS (THB) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt to equity (x) BVPS (Bt) ROE (%)
4Q14 1,047 570 363 245 (1) 9 (16) 195 195 0.24 54.4% 23.4% 18.7% 4.49 146.50 0.24 4.91 18.6%
3Q15 806 475 361 159 (1) 9 (8) 113 113 0.14 58.9% 19.7% 14.0% 4.13 86.26 0.24 4.77 17.1%
4Q15 1,289 698 444 307 (1) 16 (20) 250 250 0.31 54.1% 23.8% 19.4% 4.13 222.43 0.25 5.09 18.3%
%QoQ 60.1% 47.0% 22.7% 93.7% ‐14.3% 76.0% 150.7% 121.8% 121.8% 121.8% ‐4.8% 4.1% 5.4%
%YoY 23.2% 22.5% 22.1% 25.5% ‐17.3% 76.8% 24.8% 27.9% 27.9% 27.9% ‐0.3% 0.4% 0.7%
9M15 2,606 1,488 1,008 614 (4) 40 (27) 482 482 0.60 57.1% 23.6% 18.5% 4.13 118.72 0.24 3.8% 4.77 17.1%
6.8%
%YoY 7.5% 12.9% 28.0% ‐5.3% ‐6.1% ‐32.2% ‐51.0% ‐6.6% ‐6.7% ‐6.6%
2015 3,895 2,186 1,452 921 (6) 56 (47) 732 732 0.92 56.1% 23.7% 18.8% 4.13 141.26 0.25 8.3% 5.09 18.3%
YTD %YoY (% of 15E) 12.3% 66.9% 15.8% 68.1% 26.1% 69.4% 3.2% 66.7% ‐8.8% 78.3% ‐17.6% 71.3% ‐34.2% 57.9% 2.9% 65.9% 2.9% 65.9% 2.9% 65.9% 1.7% ‐2.1% ‐1.7%
3.8%
Source: The Company and KT Zmico Research Figure 2: Operating summary 1,400
Revenue Breakdown by distribution channels (Btmn)
1,200
1000
Distributional Channels
900
1,000
800
516
10
700 600
800 498 424
600 426
410
400
396 412
443
330
400
344
739
419
200 242
226
400 407
300
381
498 406
364
389
448
412
7
7
500
567
9 542 516 526 496 509
100
249
130 140
22
23
22
23
550 544 540 548
430
200
418
219 236 251 153 187 204
259 272 281 288
0 1Q13
0 1Q13
14
21
18
18
3Q13
1Q14
Free standing shops
3Q14 Modern trade
1Q15
3Q15
3Q13
1Q14
Free standing shops
Others
3Q14
Modern trade
1Q15 Mobile unit
3Q15 International
Profitability
70%
YoY
TSS vs SSSG
60%
30%
50%
20%
40%
10%
30%
0%
20% 10%
‐10%
0%
‐20%
1Q12
1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q15 Total system growth
Same store sales growth
Source: The Company and KT Zmico Research
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
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
Figure 3: PER and PBV band
PBV (x)
PER (x)
25.00
+ 2SD
5.00
+ 1SD
4.00
23.00 21.00
+ 2 SD + 1 SD
19.00 Average
17.00
Average
3.00
15.00
‐ 1 SD
‐ 1SD
13.00
2.00
11.00
‐ 2 SD
9.00
Source: Bloomberg, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
Jan‐16
Nov‐15
Jul‐15
Sep‐15
May‐15
Jan‐15
Mar‐15
Sep‐14
Nov‐14
Jul‐14
May‐14
Jan‐14
Mar‐14
Sep‐13
Nov‐13
Jan‐16
Nov‐15
Jul‐15
Sep‐15
May‐15
Jan‐15
Mar‐15
Nov‐14
Jul‐14
Sep‐14
May‐14
Jan‐14
Mar‐14
Nov‐13
Jul‐13
Sep‐13
Jul‐13
1.00
7.00
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) 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 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) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Effective tax rate (%) FINANCIAL QUALITY Total interest bearing debt (Btm) Net debt (Btm) Net debt to equity (x) Interest coverage (x)
2013 2,973 (1,288) 1,685 (902) 886 (86) 827 (17) 44 810 (77) 1 733 1.05 0.73
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) 921 (155) 790 (6) 56 791 (47) (12) 732 0.92 0.75
2016E 4,149 (1,764) 2,385 (1,556) 1,035 (173) 876 (8) 48 884 (83) (19) 782 0.98 0.78
2017E 4,628 (1,969) 2,659 (1,708) 1,188 (200) 1,014 (6) 63 1,026 (97) (22) 907 1.13 0.91
2013 1,792 1,363 340 4,652 129 4 951 3,614 4,652
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 1,279 1,605 584 4,877 80 0 571 4,171 4,838
2017E 1,459 2,224 626 5,754 80 0 1,232 4,413 5,735
2013 827 86 (3,819) 3,187 282 (194) (1,482) (1,676) (121) 2,925 (860) (435) 1,509 114 87 0.12
2014 805 126 579 (858) 651 (239) (67) (306) 53 0 (504) (7) (458) (113) 412 0.52
2015 790 155 1,046 (1,977) 14 (150) 1,085 935 2 0 (600) (9) (607) 342 ‐136 ‐0.17
2016E 876 173 2,003 (1,848) 1,204 (323) (385) (709) (103) 0 (570) (0) (674) (179) 880 1.10
2017E 1,014 200 2,592 (2,681) 1,124 (253) (26) (279) 0 0 (665) 0 (665) 180 871 1.09
2013 16.3 13.8 (26.9) 56.7 29.8 26.3 24.7 13.3
2014 16.7 0.8 (15.0) 54.4 25.7 21.2 20.5 9.7
2015 12.3 3.2 2.9 56.1 23.7 18.9 18.8 9.0
2016E 6.5 12.3 6.8 57.5 24.9 20.0 18.8 10.0
2017E 11.5 14.8 16.1 57.5 25.7 20.6 19.6 10.0
172 net cash net cash 47.39
226 net cash net cash 131.26
225 net cash net cash 141.26
123 net cash net cash 113.33
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
124 net cash net cash 181.01
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, SUTHA, 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
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Earnings Review
Close Bt11.70
Commerce
February 29, 2016
Beat forecast/Below forecast/In line 4Q15 results above view Price Performance (%)
BUY maintained MC posted a better‐than‐expected NP in 2015 amidst fragile domestic spending. This was due to a combination of its successful promotional campaign and the government’s stimulus package during the high season. Its marketing strategies and internal control management will help its 2016E earnings to grow. Thus, our BUY rating is maintained with the 2016E TP of Bt16.60, pegged with average PER of 17x. 4Q15 earnings above view MC posted a net profit (NP) of Bt250mn (EPS: Bt0.31) in 4Q15. This beat our estimate and the street forecast by 14% and 17%, respectively, due to higher sales with a better share of profit from associates. 4Q15: the best quarter of the year MC’s 4Q15 NP surged 28%YoY and 1.2x QoQ. The successful promotional campaign during its high season brought its same‐store‐sales growth to 19%YoY. This combined with continued expansion of its points of sales boosted its top line by 23%YoY and 60%QoQ to Bt1.3bn. With more efficiency on cost control regarding the production line improvement project, its gross margin stood at 54.1%, on par with 4Q14. This was sufficient to cover the escalation in SG&A expenses. Thus, its EBITDA margin increased to 23.8% from 23.4% in 4Q14 and 19.7% in 3Q15.
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.980
1.101
KT ZMICO vs. consensus Share data
0.0%
2.6%
Reuters / Bloomberg
MC.BK/MC TB
Paid‐up Shares (m)
800.00
Par (Bt)
0.50
Market cap (Bt bn / US$ m)
9.00/262.00
Foreign limit / actual (%)
49.00/22.49
52 week High / Low (Bt)
16.10/11.10
Avg. daily T/O (shares 000)
895.00
NVDR (%)
2.01
Estimated free float (%)
31.72
Beta
0.82
URL
www.mcgroupnet.com
CGR
Anti‐corruption
Level 3A (Established)
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
Gained good traction in 2015 MC ended 2015 with a NP of Bt732mn (EPS: Bt0.92), increasing 3%YoY amidst sluggish domestic spending. Its sales reached a record high of Bt3.9bn (+12%YoY) thanks to 1) points of sales expansion (+48 outlets domestically); 2) the introduction of new product lines (i.e., luggage, top wear); and 3) active promotional campaigns. The better GPM outweighed skyrocketing SG&A expenses (to 37.3% to sales from 33.2%). With its strong financial position, MC will pay a DPS of Bt0.40 for the 2H15 performance, representing a 3.5% yield for the period. The XD sign will be posted on 28 April, with the payment date set for 19 May. Earnings forecasts unchanged We keep our 2016E‐2017E earnings forecasts unchanged. We like MC’s fast‐moving strategies including offering a greater variety of products and active marketing campaigns. This will help MC continue to expand its earnings growth. 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 (%)
2013 2,973 733 1.05 1.05 ‐26.9% 0.73 4.63 2013 11.08 8.60 2.51 6.3% 32.5% net cash
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 9.67 2.36 6.3% 18.3% net cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
2016E 4,149 782 0.98 0.98 6.8% 0.78 5.33 2016E 11.67 7.66 2.14 6.9% 18.7% net cash
2017E 4,628 907 1.13 1.13 16.1% 0.91 5.63 2017E 10.05 6.52 2.03 8.0% 20.7% net cash
Figure 1: Earnings review Profit and Loss Statement (Btmn) Fiscal Year‐Ended Dec. Revenue Gross Profit SG&A expenses EBITDA Interest Expense Other income Income tax Net profit (loss) Core profit (loss) Reported EPS (THB) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt to equity (x) BVPS (Bt) ROE (%)
4Q14 1,047 570 363 245 (1) 9 (16) 195 195 0.24 54.4% 23.4% 18.7% 4.49 146.50 0.24 4.91 18.6%
3Q15 806 475 361 159 (1) 9 (8) 113 113 0.14 58.9% 19.7% 14.0% 4.13 86.26 0.24 4.77 17.1%
4Q15 1,289 698 444 307 (1) 16 (20) 250 250 0.31 54.1% 23.8% 19.4% 4.13 222.43 0.25 5.09 18.3%
%QoQ 60.1% 47.0% 22.7% 93.7% ‐14.3% 76.0% 150.7% 121.8% 121.8% 121.8% ‐4.8% 4.1% 5.4%
%YoY 23.2% 22.5% 22.1% 25.5% ‐17.3% 76.8% 24.8% 27.9% 27.9% 27.9% ‐0.3% 0.4% 0.7%
9M15 2,606 1,488 1,008 614 (4) 40 (27) 482 482 0.60 57.1% 23.6% 18.5% 4.13 118.72 0.24 3.8% 4.77 17.1%
6.8%
%YoY 7.5% 12.9% 28.0% ‐5.3% ‐6.1% ‐32.2% ‐51.0% ‐6.6% ‐6.7% ‐6.6%
2015 3,895 2,186 1,452 921 (6) 56 (47) 732 732 0.92 56.1% 23.7% 18.8% 4.13 141.26 0.25 8.3% 5.09 18.3%
YTD %YoY (% of 15E) 12.3% 66.9% 15.8% 68.1% 26.1% 69.4% 3.2% 66.7% ‐8.8% 78.3% ‐17.6% 71.3% ‐34.2% 57.9% 2.9% 65.9% 2.9% 65.9% 2.9% 65.9% 1.7% ‐2.1% ‐1.7%
3.8%
Source: The Company and KT Zmico Research Figure 2: Operating summary 1,400
Revenue Breakdown by distribution channels (Btmn)
1,200
1000
Distributional Channels
900
1,000
800
516
10
700 600
800 498 424
600 426
410
400
396 412
443
330
400
344
739
419
200 242
226
400 407
300
381
498 406
364
389
448
412
7
7
500
567
9 542 516 526 496 509
100
249
130 140
22
23
22
23
550 544 540 548
430
200
418
219 236 251 153 187 204
259 272 281 288
0 1Q13
0 1Q13
14
21
18
18
3Q13
1Q14
Free standing shops
3Q14 Modern trade
1Q15
3Q15
3Q13
1Q14
Free standing shops
Others
3Q14
Modern trade
1Q15 Mobile unit
3Q15 International
Profitability
70%
YoY
TSS vs SSSG
60%
30%
50%
20%
40%
10%
30%
0%
20% 10%
‐10%
0%
‐20%
1Q12
1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q15 Total system growth
Same store sales growth
Source: The Company and KT Zmico Research
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
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Figure 3: PER and PBV band
PBV (x)
PER (x)
25.00
+ 2SD
5.00
+ 1SD
4.00
23.00 21.00
+ 2 SD + 1 SD
19.00 Average
17.00
Average
3.00
15.00
‐ 1 SD
‐ 1SD
13.00
2.00
11.00
‐ 2 SD
9.00
Source: Bloomberg, KT Zmico Research
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Jan‐16
Nov‐15
Jul‐15
Sep‐15
May‐15
Jan‐15
Mar‐15
Sep‐14
Nov‐14
Jul‐14
May‐14
Jan‐14
Mar‐14
Sep‐13
Nov‐13
Jan‐16
Nov‐15
Jul‐15
Sep‐15
May‐15
Jan‐15
Mar‐15
Nov‐14
Jul‐14
Sep‐14
May‐14
Jan‐14
Mar‐14
Nov‐13
Jul‐13
Sep‐13
Jul‐13
1.00
7.00
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) 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 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) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Effective tax rate (%) FINANCIAL QUALITY Total interest bearing debt (Btm) Net debt (Btm) Net debt to equity (x) Interest coverage (x)
2013 2,973 (1,288) 1,685 (902) 886 (86) 827 (17) 44 810 (77) 1 733 1.05 0.73
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) 921 (155) 790 (6) 56 791 (47) (12) 732 0.92 0.75
2016E 4,149 (1,764) 2,385 (1,556) 1,035 (173) 876 (8) 48 884 (83) (19) 782 0.98 0.78
2017E 4,628 (1,969) 2,659 (1,708) 1,188 (200) 1,014 (6) 63 1,026 (97) (22) 907 1.13 0.91
2013 1,792 1,363 340 4,652 129 4 951 3,614 4,652
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 1,279 1,605 584 4,877 80 0 571 4,171 4,838
2017E 1,459 2,224 626 5,754 80 0 1,232 4,413 5,735
2013 827 86 (3,819) 3,187 282 (194) (1,482) (1,676) (121) 2,925 (860) (435) 1,509 114 87 0.12
2014 805 126 579 (858) 651 (239) (67) (306) 53 0 (504) (7) (458) (113) 412 0.52
2015 790 155 1,046 (1,977) 14 (150) 1,085 935 2 0 (600) (9) (607) 342 ‐136 ‐0.17
2016E 876 173 2,003 (1,848) 1,204 (323) (385) (709) (103) 0 (570) (0) (674) (179) 880 1.10
2017E 1,014 200 2,592 (2,681) 1,124 (253) (26) (279) 0 0 (665) 0 (665) 180 871 1.09
2013 16.3 13.8 (26.9) 56.7 29.8 26.3 24.7 13.3
2014 16.7 0.8 (15.0) 54.4 25.7 21.2 20.5 9.7
2015 12.3 3.2 2.9 56.1 23.7 18.9 18.8 9.0
2016E 6.5 12.3 6.8 57.5 24.9 20.0 18.8 10.0
2017E 11.5 14.8 16.1 57.5 25.7 20.6 19.6 10.0
172 net cash net cash 47.39
226 net cash net cash 131.26
225 net cash net cash 141.26
123 net cash net cash 113.33
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124 net cash net cash 181.01
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, SUTHA, 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.
