Outperform (17E TP Bt430.00) Company Update - Amazon Web ...
PTT
Outperform (17E TP Bt430.00)
Company Update
Close Bt394.00
Energy & Utilities February 17, 2017
Earnings upgrade/ Earnings downgrade / Overview unchanged
2016 NP contained no surprises Price Performance (%)
Source: SET Smart Consensus EPS (Bt)
FY17
FY18
35.741
37.220
3.6%
7%
KT ZMICO vs. consensus Share data Reuters / Bloomberg
PTT.BK/PTT TB
Paid‐up Shares (m)
2,856.30
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
1,125.00/32,163.00
Foreign limit / actual (%)
30.00/16.21
52 week High / Low (Bt)
430.00/235.00
Avg. daily T/O (shares 000) NVDR (%)
5,978.00 6.88
Estimated free float (%)
48.87
Beta
1.23
URL
www.pttplc.com
CGR Anti‐corruption
Level 5 (Certified)
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Solid earnings growth; PTTOR listing to color PTT share price We maintain our Outperform rating on PTT (with the 2017E SOTP‐based TP increased to Bt430 vs. Bt425 previously following the upward revision on PTTGC’s TP done earlier) given its solid core profit growth continuing in 2017‐18E at 10% CAGR driven by its core gas business and the higher contribution from PTTEP and its downstream affiliates. Meanwhile, the targeted listing of PTT Oil and Retail Business (PTTOR) in late 2017E to early 2018E will color PTT’s share price over the next 6‐12 months. Impairment charges behind weak 4Q16 NP of Bt19.1bn PTT delivered Bt19.1bn NP in 4Q16, lower than our forecast by 9%, mainly due to higher‐than‐expected impairment charges (totaling Bt7.2bn linked to PTTEP, PTTER and PTTGC). However, this quarter’s bottom line marked a big jump of 10x YoY from 4Q15 in which massive Bt23bn impairment charges were booked (mainly from PTT’s coal assets), but it was down 29% QoQ. Stripping out forex impact and non‐recurring items, its core profit weakened to Bt18.8bn, with hedging loss as the main weakness QoQ despite the solid performance at its GSP business (given the sustained high sales volume to 1.77mn tons and widening product spreads on lower gas cost) and the stronger profit contribution from downstream affiliates (with improving product spreads and stock gain as the main catalysts). In‐line 2016 NP of Bt94.6bn It delivered 2016 NP of Bt94.6bn (+375% YoY), close to our forecast (Bt96.6bn), with a solid operational performance and smaller impairment charges of Bt7.2bn (vs. the huge impairment charges totaling Bt73bn in 2015, mainly from PTTEP and PTT’s coal assets). Meanwhile, its core profit of Bt93.7bn remained flat YoY, with the higher contribution from PTT’s gas business (mainly from the GSP performance driven by widening spreads), oil business (given the larger volume and higher margin), and its downstream affiliates (due to higher petrochemical spreads and the reversal to stock gain) weighed down by the smaller contribution from PTTEP, with lower ASP and oil hedging loss as the main pressures. Solid core earnings to continue in 2017‐18E We negligibly revise up our 2017‐18E NP for PTT by +1‐2% to reflect the slight revision done on PTTGC earlier. Our forecasts call for its core profit to mark moderate growth at 10% CAGR during 2017‐18E, with its gas business as the core driver, along with a larger contribution from PTTEP (due to an improving margin) and its downstream affiliates (given a higher utilization rate, except for IRPC with the entire 30‐day planned shutdown set for 1Q17). We also slightly raise our 2017E SOTP‐based TP to Bt430 vs. Bt425 previously following the upward revision on PTTGC’s TP done earlier). Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Core profit (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 2,605,062 82,066 58,678 20.34 (37.45) 11.00 239.22 2014 19.37 5.92 1.65 2.8% 8.6% 60.5%
2015 2,025,552 94,968 19,936 6.73 (66.91) 10.00 244.07 2015 58.54 5.28 1.61 2.5% 2.9% 44.9%
2016 1,718,846 93,728 94,609 32.68 385.59 12.53 267.11 2016 12.06 4.46 1.48 3.2% 13.0% 29.1%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 2,719,434 104,929 105,709 37.03 13.31 13.33 288.81 2017E 10.64 4.26 1.36 3.4% 13.3% 33.1%
2018E 3,369,425 113,565 113,742 39.84 7.60 13.95 315.00 2018E 9.89 3.68 1.25 3.5% 13.2% 16.4%
Figure 1: PTT’s 4Q16 and 2016 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Other extraordinary Items Gn (Ls) from affiliates Minority interests Profit (loss) from discontinued operations Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Interest‐bearing debt / equity (x) BVPS (Bt) ROE (%)
4Q15 470,213 51,442 63,617 (6,832) 7,838 (4,782) 4,002 (23,868) 1,444 (6,547) 381 188 20,054 0.07 10.9 13.5 0.0 2.2 4.2 0.95 244.07 0.1
3Q16 435,172 59,681 72,857 (7,237) 3,660 (6,727) 2,361 1,107 1,162 (7,879) 9 26,974 23,497 9.41 13.7 16.7 6.2 2.4 5.6 0.83 258.21 14.7
4Q16 476,287 72,971 81,842 (7,171) (6,781) (9,157) 4,998 (5,267) 1,277 (8,573) 560 19,087 18,796 6.53 15.3 17.2 4.0 2.2 6.9 0.81 267.11 10.2
% YoY 1.3 41.9 28.6 5.0 nm 91.5 24.9 (77.9) (11.6) 30.9 46.9 10,033.9 (6.3) 9,802.8
% QoQ 9.4 22.3 12.3 (0.9) nm 36.1 111.7 nm 9.9 8.8 5,942.7 (29.2) (20.0) (30.6)
2015 2,025,552 216,928 272,374 (30,079) 28,361 (25,071) (5,992) (70,450) 6,032 (11,171) (730) 19,936 94,968 6.73 10.71 13.45 0.98 2.16 4.29 0.95 244.07 2.89
2016 1,718,846 253,208 301,822 (28,887) 6,640 (26,593) 4,473 (4,161) 4,143 (34,663) 569 94,609 93,728 32.68 14.73 17.56 5.50 2.18 5.99 0.81 267.11 12.96
Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
% YoY (15.1) 16.7 10.8 (4.0) (76.6) 6.1 nm (94.1) (31.3) 210.3 nm 374.6 (1.3) 385.6
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 (%)
2013 2,842,408 (2,623,533) 218,875 (77,241) 217,878 76,244 141,634 (20,593) 12,714 133,755 (47,649) (210) 1,313 26,356 (20,473) 93,091 32.52 32.52 91,989 32.21 13.00
2014 2,605,062 (2,384,840) 220,222 (95,753) 260,033 135,563 124,469 (33,033) 36,926 128,361 (38,006) 11,610 (34,999) 860 (9,149) 58,678 20.34 20.34 82,066 28.73 11.00
2015 2,025,552 (1,808,624) 216,928 (87,890) 272,374 143,336 129,038 (30,079) 28,361 127,319 (25,071) (5,992) (71,180) 6,032 (11,171) 19,936 6.73 6.73 94,968 33.25 10.00
2016 1,718,846 (1,465,638) 253,208 (80,121) 301,822 128,734 173,088 (28,887) 6,640 150,841 (26,593) 4,473 (3,591) 4,143 (34,663) 94,609 32.68 32.68 93,728 32.81 12.53
2017E 2,719,434 (2,417,828) 301,605 (112,172) 328,289 138,855 189,433 (21,816) 15,147 182,764 (40,575) 780 0 3,400 (40,661) 105,709 37.03 37.03 104,929 36.74 13.33
2018E 3,369,425 (3,024,739) 344,685 (138,495) 345,832 139,641 206,191 (19,805) 14,847 201,233 (45,806) 177 0 3,400 (45,262) 113,742 39.84 39.84 113,565 39.76 13.95
2013 160,370 311,121 44,172 746,057 543,319 1,805,039 60,469 425,880 982,197 28,563 682,311 140,532 1,805,039
2014 316,757 220,142 147,930 1,111,484 454,038 2,250,351 137,118 592,982 1,195,657 28,563 683,287 371,408 2,250,351
2015 346,725 195,484 115,729 1,124,965 391,093 2,173,996 81,094 578,753 1,086,309 28,563 697,147 390,540 2,173,996
2016 392,380 186,415 147,910 1,104,458 401,169 2,232,331 94,583 519,772 1,060,734 28,563 762,948 408,649 2,232,331
2017E 256,870 335,068 281,993 1,133,661 399,292 2,406,884 123,576 406,213 1,132,633 28,563 824,941 449,310 2,406,884
2018E 330,345 426,995 345,486 1,085,334 398,186 2,586,346 143,309 334,684 1,192,047 28,563 899,728 494,572 2,586,346
2013 93,091 210 76,244 (17,248) 152,297 (173,972)
2014 58,678 (11,610) 135,563 (86,852) 95,779 (344,007)
2015 19,936 5,992 143,336 18,551 187,816 (130,006)
2016 94,609 (4,473) 128,734 25,104 243,974 (113,203)
2017E 105,709 (780) 138,855 (94,920) 148,864 (168,059)
2018E 113,742 (177) 139,641 (10,314) 242,892 (91,314)
(173,972) 30,527 28,315 (37,132) 17,002 38,712 17,037 (21,675) (7.59)
(344,007) 243,751 (31,715) (34,276) 226,855 404,615 156,387 (248,228) (86.95)
(130,006) (70,253) 18,776 (29,991) 53,627 (27,842) 29,968 57,810 20.25
(113,203) (45,492) (27,148) (32,180) 19,704 (85,117) 45,655 130,771 45.81
(168,059) (84,566) (44,040) (36,937) 49,228 (116,315) (135,510) (19,195) (6.72)
(91,314) (51,796) (41,862) (38,954) 54,509 (78,103) 73,475 151,578 53.10
2013 1.7 1.0 (11.1) 7.7 7.7 5.0 3.3 3.2 35.6
2014 (8.4) 19.3 (37.5) 8.5 10.0 4.8 2.3 3.2 29.6
2015 (22.2) 4.7 (66.9) 10.7 13.4 6.4 1.0 4.7 19.7
2016 (15.1) 10.8 385.6 14.7 17.6 10.1 5.5 5.5 17.6
2017E 58.2 8.8 13.3 11.1 12.1 7.0 3.9 3.9 22.2
2018E 23.9 5.3 7.6 10.2 10.3 6.1 3.4 3.4 22.8
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, TFD. KT ZMICO is a co underwriter of RPH.
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 UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
Outperform (17E TP Bt430.00)
Company Update
Close Bt394.00
Energy & Utilities February 17, 2017
Earnings upgrade/ Earnings downgrade / Overview unchanged
2016 NP contained no surprises Price Performance (%)
Source: SET Smart Consensus EPS (Bt)
FY17
FY18
35.741
37.220
3.6%
7%
KT ZMICO vs. consensus Share data Reuters / Bloomberg
PTT.BK/PTT TB
Paid‐up Shares (m)
2,856.30
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
1,125.00/32,163.00
Foreign limit / actual (%)
30.00/16.21
52 week High / Low (Bt)
430.00/235.00
Avg. daily T/O (shares 000) NVDR (%)
5,978.00 6.88
Estimated free float (%)
48.87
Beta
1.23
URL
www.pttplc.com
CGR Anti‐corruption
Level 5 (Certified)
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Solid earnings growth; PTTOR listing to color PTT share price We maintain our Outperform rating on PTT (with the 2017E SOTP‐based TP increased to Bt430 vs. Bt425 previously following the upward revision on PTTGC’s TP done earlier) given its solid core profit growth continuing in 2017‐18E at 10% CAGR driven by its core gas business and the higher contribution from PTTEP and its downstream affiliates. Meanwhile, the targeted listing of PTT Oil and Retail Business (PTTOR) in late 2017E to early 2018E will color PTT’s share price over the next 6‐12 months. Impairment charges behind weak 4Q16 NP of Bt19.1bn PTT delivered Bt19.1bn NP in 4Q16, lower than our forecast by 9%, mainly due to higher‐than‐expected impairment charges (totaling Bt7.2bn linked to PTTEP, PTTER and PTTGC). However, this quarter’s bottom line marked a big jump of 10x YoY from 4Q15 in which massive Bt23bn impairment charges were booked (mainly from PTT’s coal assets), but it was down 29% QoQ. Stripping out forex impact and non‐recurring items, its core profit weakened to Bt18.8bn, with hedging loss as the main weakness QoQ despite the solid performance at its GSP business (given the sustained high sales volume to 1.77mn tons and widening product spreads on lower gas cost) and the stronger profit contribution from downstream affiliates (with improving product spreads and stock gain as the main catalysts). In‐line 2016 NP of Bt94.6bn It delivered 2016 NP of Bt94.6bn (+375% YoY), close to our forecast (Bt96.6bn), with a solid operational performance and smaller impairment charges of Bt7.2bn (vs. the huge impairment charges totaling Bt73bn in 2015, mainly from PTTEP and PTT’s coal assets). Meanwhile, its core profit of Bt93.7bn remained flat YoY, with the higher contribution from PTT’s gas business (mainly from the GSP performance driven by widening spreads), oil business (given the larger volume and higher margin), and its downstream affiliates (due to higher petrochemical spreads and the reversal to stock gain) weighed down by the smaller contribution from PTTEP, with lower ASP and oil hedging loss as the main pressures. Solid core earnings to continue in 2017‐18E We negligibly revise up our 2017‐18E NP for PTT by +1‐2% to reflect the slight revision done on PTTGC earlier. Our forecasts call for its core profit to mark moderate growth at 10% CAGR during 2017‐18E, with its gas business as the core driver, along with a larger contribution from PTTEP (due to an improving margin) and its downstream affiliates (given a higher utilization rate, except for IRPC with the entire 30‐day planned shutdown set for 1Q17). We also slightly raise our 2017E SOTP‐based TP to Bt430 vs. Bt425 previously following the upward revision on PTTGC’s TP done earlier). Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Core profit (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 2,605,062 82,066 58,678 20.34 (37.45) 11.00 239.22 2014 19.37 5.92 1.65 2.8% 8.6% 60.5%
2015 2,025,552 94,968 19,936 6.73 (66.91) 10.00 244.07 2015 58.54 5.28 1.61 2.5% 2.9% 44.9%
2016 1,718,846 93,728 94,609 32.68 385.59 12.53 267.11 2016 12.06 4.46 1.48 3.2% 13.0% 29.1%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2017E 2,719,434 104,929 105,709 37.03 13.31 13.33 288.81 2017E 10.64 4.26 1.36 3.4% 13.3% 33.1%
2018E 3,369,425 113,565 113,742 39.84 7.60 13.95 315.00 2018E 9.89 3.68 1.25 3.5% 13.2% 16.4%
Figure 1: PTT’s 4Q16 and 2016 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Other extraordinary Items Gn (Ls) from affiliates Minority interests Profit (loss) from discontinued operations Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Interest‐bearing debt / equity (x) BVPS (Bt) ROE (%)
4Q15 470,213 51,442 63,617 (6,832) 7,838 (4,782) 4,002 (23,868) 1,444 (6,547) 381 188 20,054 0.07 10.9 13.5 0.0 2.2 4.2 0.95 244.07 0.1
3Q16 435,172 59,681 72,857 (7,237) 3,660 (6,727) 2,361 1,107 1,162 (7,879) 9 26,974 23,497 9.41 13.7 16.7 6.2 2.4 5.6 0.83 258.21 14.7
4Q16 476,287 72,971 81,842 (7,171) (6,781) (9,157) 4,998 (5,267) 1,277 (8,573) 560 19,087 18,796 6.53 15.3 17.2 4.0 2.2 6.9 0.81 267.11 10.2
% YoY 1.3 41.9 28.6 5.0 nm 91.5 24.9 (77.9) (11.6) 30.9 46.9 10,033.9 (6.3) 9,802.8
% QoQ 9.4 22.3 12.3 (0.9) nm 36.1 111.7 nm 9.9 8.8 5,942.7 (29.2) (20.0) (30.6)
2015 2,025,552 216,928 272,374 (30,079) 28,361 (25,071) (5,992) (70,450) 6,032 (11,171) (730) 19,936 94,968 6.73 10.71 13.45 0.98 2.16 4.29 0.95 244.07 2.89
2016 1,718,846 253,208 301,822 (28,887) 6,640 (26,593) 4,473 (4,161) 4,143 (34,663) 569 94,609 93,728 32.68 14.73 17.56 5.50 2.18 5.99 0.81 267.11 12.96
Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
% YoY (15.1) 16.7 10.8 (4.0) (76.6) 6.1 nm (94.1) (31.3) 210.3 nm 374.6 (1.3) 385.6
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 (%)
2013 2,842,408 (2,623,533) 218,875 (77,241) 217,878 76,244 141,634 (20,593) 12,714 133,755 (47,649) (210) 1,313 26,356 (20,473) 93,091 32.52 32.52 91,989 32.21 13.00
2014 2,605,062 (2,384,840) 220,222 (95,753) 260,033 135,563 124,469 (33,033) 36,926 128,361 (38,006) 11,610 (34,999) 860 (9,149) 58,678 20.34 20.34 82,066 28.73 11.00
2015 2,025,552 (1,808,624) 216,928 (87,890) 272,374 143,336 129,038 (30,079) 28,361 127,319 (25,071) (5,992) (71,180) 6,032 (11,171) 19,936 6.73 6.73 94,968 33.25 10.00
2016 1,718,846 (1,465,638) 253,208 (80,121) 301,822 128,734 173,088 (28,887) 6,640 150,841 (26,593) 4,473 (3,591) 4,143 (34,663) 94,609 32.68 32.68 93,728 32.81 12.53
2017E 2,719,434 (2,417,828) 301,605 (112,172) 328,289 138,855 189,433 (21,816) 15,147 182,764 (40,575) 780 0 3,400 (40,661) 105,709 37.03 37.03 104,929 36.74 13.33
2018E 3,369,425 (3,024,739) 344,685 (138,495) 345,832 139,641 206,191 (19,805) 14,847 201,233 (45,806) 177 0 3,400 (45,262) 113,742 39.84 39.84 113,565 39.76 13.95
2013 160,370 311,121 44,172 746,057 543,319 1,805,039 60,469 425,880 982,197 28,563 682,311 140,532 1,805,039
2014 316,757 220,142 147,930 1,111,484 454,038 2,250,351 137,118 592,982 1,195,657 28,563 683,287 371,408 2,250,351
2015 346,725 195,484 115,729 1,124,965 391,093 2,173,996 81,094 578,753 1,086,309 28,563 697,147 390,540 2,173,996
2016 392,380 186,415 147,910 1,104,458 401,169 2,232,331 94,583 519,772 1,060,734 28,563 762,948 408,649 2,232,331
2017E 256,870 335,068 281,993 1,133,661 399,292 2,406,884 123,576 406,213 1,132,633 28,563 824,941 449,310 2,406,884
2018E 330,345 426,995 345,486 1,085,334 398,186 2,586,346 143,309 334,684 1,192,047 28,563 899,728 494,572 2,586,346
2013 93,091 210 76,244 (17,248) 152,297 (173,972)
2014 58,678 (11,610) 135,563 (86,852) 95,779 (344,007)
2015 19,936 5,992 143,336 18,551 187,816 (130,006)
2016 94,609 (4,473) 128,734 25,104 243,974 (113,203)
2017E 105,709 (780) 138,855 (94,920) 148,864 (168,059)
2018E 113,742 (177) 139,641 (10,314) 242,892 (91,314)
(173,972) 30,527 28,315 (37,132) 17,002 38,712 17,037 (21,675) (7.59)
(344,007) 243,751 (31,715) (34,276) 226,855 404,615 156,387 (248,228) (86.95)
(130,006) (70,253) 18,776 (29,991) 53,627 (27,842) 29,968 57,810 20.25
(113,203) (45,492) (27,148) (32,180) 19,704 (85,117) 45,655 130,771 45.81
(168,059) (84,566) (44,040) (36,937) 49,228 (116,315) (135,510) (19,195) (6.72)
(91,314) (51,796) (41,862) (38,954) 54,509 (78,103) 73,475 151,578 53.10
2013 1.7 1.0 (11.1) 7.7 7.7 5.0 3.3 3.2 35.6
2014 (8.4) 19.3 (37.5) 8.5 10.0 4.8 2.3 3.2 29.6
2015 (22.2) 4.7 (66.9) 10.7 13.4 6.4 1.0 4.7 19.7
2016 (15.1) 10.8 385.6 14.7 17.6 10.1 5.5 5.5 17.6
2017E 58.2 8.8 13.3 11.1 12.1 7.0 3.9 3.9 22.2
2018E 23.9 5.3 7.6 10.2 10.3 6.1 3.4 3.4 22.8
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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, TFD. KT ZMICO is a co underwriter of RPH.
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 UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
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KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
