PTT Exploration and Production
PTT Exploration and Production
Underperform (17E TP Bt99.00)
Company Update
Close Bt86.75
Energy & Utilities June 28, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
S1 resumed operations in Agricultural Land Reform areas Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
6.370
7.396
KT ZMICO vs. consensus Share data
11.3%
14.0%
Reuters / Bloomberg
PTTEP.BK/PTTEP TB
Paid‐up Shares (m)
3,969.99
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
344.00/10,141.00
Foreign limit / actual (%)
40.00/13.56
52 week High / Low (Bt)
102.00/75.00
Avg. daily T/O (shares 000) NVDR (%)
9,782.00 6.55
Estimated free float (%)
34.67
Beta
0.94
URL
www.pttep.com
CGR Anti‐corruption
Level 4 (Certified)
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Earnings forecasts still at risk; valuation on par with regional peers Despite the easing of short‐term volume risk at the S1 project, PTTEP’s petroleum sales volume remains at risk, particularly in 2018E, with the possible downside stemming from PTT’s lower gas nomination in some projects in the Gulf of Thailand along with the current unfavorable oil price, which will put its earnings under pressure towards 2018E due to the company’s 30% sales exposure on crude. Given the small share price reaction to the S1 project issue over the last month, we don’t expect its operation resumption to result in a significant bounce back of the company’s share price. Meanwhile, its share price is currently trading at 0.12x 2017E PBV/ROE, on par with regional peers. We retain an “Underperform” rating. S1 operation resumes after a 23‐day temporary cessation Given the order of the National Council for Peace and Order announced in the Royal Thai Government Gazette on 23 Jun, 2017 granting authority to the Agricultural Land Reform Committee to allow the use of Agricultural Land Reform areas for any purpose other than agriculture until further notice, PTTEP immediately resumed the S1 operation in the areas of the Agricultural Land Reform after receiving the notification letter from the Department of Mineral Fuels on 26 Jun, 2017. The project temporarily ceased operations for a total of 23 days from 3‐25 Jun, 2017. Negligible impact to 2017E earnings and TP With the 23‐day temporary cessation of the S1 operation in the areas of the Agricultural Land Reform resulting in volume loss of 18kboe/d (including 15kboe/d of crude and 3kboe/d of natural gas and LPG), we make a negligible cut on PTTEP’s 2017E sales volume by the average of 1.1kboe/d (~0.4% to 301kboe/d) and its NP by Bt190mn in the year (~0.7% from earlier). As a result, there is no change to our TP at Bt99/share. Earnings forecasts remain at risk Our new 2017E sales volume projection for PTTEP at 301kboe/d reflects the negligible volume loss from the S1 project as mentioned above, as well as our earlier inclusion of possible lower gas nomination and the exercise of gas carried forward volume by PTT (with our last cut of 3% on its sales volume done in late Apr‐17), with the latter factor likely to be further downside risk to its 2018E sales volume (311kboe/d at current). Meanwhile, the sensitive oil price is another risk factor following the re‐emerging supply glut (particularly driven by the accelerating oil production from the US, as well as Libya and Nigeria), with our sensitivity study revealing that every US$5/bbl change in the oil price (vs. our Dubai assumptions of US$52/bbl in 2017E (YTD US$51.4/bbl) and US$60/bbl in 2018E) will have a 9‐11% impact (~Bt2.8‐3.0bn/year) on our earnings estimates and a Bt5/share impact on our DCF‐based TP. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 184,411 (31,590) (8.24) ‐258.8% 3.00 102.98 2015 nm 2.56 0.84 3.5% ‐7.7% ‐2.2%
2016 150,217 12,860 2.76 133.5% 3.25 102.77 2016 31.43 2.83 0.84 3.7% 3.1% ‐10.5%
2017E 155,770 28,136 7.09 156.8% 3.54 106.31 2017E 12.24 2.69 0.82 4.1% 6.8% ‐10.8%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 170,180 33,460 8.43 18.9% 3.62 111.11 2018E 10.29 2.15 0.78 4.2% 7.8% ‐19.3%
2019E 165,309 30,789 7.76 ‐8.0% 3.72 115.15 2019E 11.19 1.85 0.75 4.3% 6.9% ‐28.6%
Figure 1: PTTEP’s 2017E earnings revision
Petroleum sales volume (boe/d) Dubai (US$/bbl) Average selling price (US$/boe) Unit cost (US$/boe) Sales (Btmn) EBITDA (Btmn) Core profit (loss) (Btmn) Net profit (Btmn) EPS (Bt) 17E DCF‐based TP (Bt)
2017E New 300,810 52 40 30 155,770 110,920 28,136 28,136 7.09 99
Old 301,944 52 40 30 156,479 111,423 28,327 28,327 7.14 99
% chg. from old ‐0.4 0.0 ‐0.1 ‐0.2 ‐0.5 ‐0.5 ‐0.7 ‐0.7 ‐0.7
2018E Maintained 310,552 60 42 31 170,180 120,470 33,460 33,460 8.43
Source: KT ZMICO Research
Figure 2: PTTEP’s PBV band Source: Bloomberg, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt)
2015 184,411 (122,198) 62,213 (23,904) 130,705 92,396 38,309 (8,582) 2,641 32,368 (17,085) 2,545 (49,729) 311 (31,590) (8.24) (8.24) 14,183 3.57 3.00
2016 150,217 (96,500) 53,717 (20,359) 106,726 73,368 33,358 (8,274) 2,528 27,612 (10,040) (4,197) (816) 301 12,860 2.76 2.76 19,608 4.94 3.25
2017E 155,770 (87,070) 68,700 (22,596) 110,920 64,816 46,104 (6,526) 2,300 41,878 (13,991) 0 0 250 28,136 7.09 7.09 28,136 7.09 3.54
2018E 170,180 (93,915) 76,266 (25,161) 120,470 69,365 51,105 (5,962) 2,300 47,442 (14,233) 0 0 250 33,460 8.43 8.43 33,460 8.43 3.62
2019E 165,309 (94,485) 70,824 (24,241) 115,638 69,054 46,584 (5,349) 2,300 43,534 (13,060) 0 0 315 30,789 7.76 7.76 30,789 7.76 3.72
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 Total liab. & shareholder equity
2015 117,637 20,212 16,293 348,342 206,379 708,864 0 108,455 300,053 3,970 408,811 708,864
2016 144,102 16,438 13,738 305,782 196,830 676,890 0 101,459 268,906 3,970 407,984 676,890
2017E 175,982 17,071 10,735 326,139 183,914 713,841 13,125 117,375 291,789 3,970 422,052 713,841
2018E 200,606 18,650 11,579 312,060 172,927 715,821 18,821 96,750 274,697 3,970 441,124 715,821
2019E 227,714 18,116 11,649 290,481 163,145 711,105 8,200 88,550 253,971 3,970 457,134 711,105
CASH FLOW (Btm) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital & 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)
2015 (31,590) (2,545) 92,396 32,470 90,731 (62,379)
2016 12,860 4,197 73,368 (2,402) 88,024 (30,878)
2017E 28,136 0 64,816 (1,517) 91,436 (85,173)
2018E 33,460 0 69,365 (2,532) 100,293 (55,286)
2019E 30,789 0 69,054 349 100,192 (47,475)
(62,379) (30,936) 37,884 (11,910) (35,315) (40,277) (11,925) 28,352 7.14
(30,878) (6,996) 2,629 (15,143) (11,172) (30,682) 26,464 57,146 14.39
(85,173) 29,041 250 (14,068) 10,395 25,618 31,881 6,263 1.58
(55,286) (14,929) 250 (14,388) 8,683 (20,384) 24,623 45,007 11.34
(47,475) (18,821) 315 (14,779) 7,676 (25,608) 27,109 52,717 13.28
2015 (23.8) (23.8) (258.8) 33.7 70.9 20.8 (17.1) 7.7 52.8
2016 (18.5) (18.3) 133.5 35.8 71.0 22.2 8.6 13.1 36.4
2017E 3.7 3.9 156.8 44.1 71.2 29.6 18.1 18.1 33.4
2018E 9.3 8.6 18.9 44.8 70.8 30.0 19.7 19.7 30.0
2019E (2.9) (4.0) (8.0) 42.8 70.0 28.2 18.6 18.6 30.0
PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD, TFD.
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
Underperform (17E TP Bt99.00)
Company Update
Close Bt86.75
Energy & Utilities June 28, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
S1 resumed operations in Agricultural Land Reform areas Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
6.370
7.396
KT ZMICO vs. consensus Share data
11.3%
14.0%
Reuters / Bloomberg
PTTEP.BK/PTTEP TB
Paid‐up Shares (m)
3,969.99
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
344.00/10,141.00
Foreign limit / actual (%)
40.00/13.56
52 week High / Low (Bt)
102.00/75.00
Avg. daily T/O (shares 000) NVDR (%)
9,782.00 6.55
Estimated free float (%)
34.67
Beta
0.94
URL
www.pttep.com
CGR Anti‐corruption
Level 4 (Certified)
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Earnings forecasts still at risk; valuation on par with regional peers Despite the easing of short‐term volume risk at the S1 project, PTTEP’s petroleum sales volume remains at risk, particularly in 2018E, with the possible downside stemming from PTT’s lower gas nomination in some projects in the Gulf of Thailand along with the current unfavorable oil price, which will put its earnings under pressure towards 2018E due to the company’s 30% sales exposure on crude. Given the small share price reaction to the S1 project issue over the last month, we don’t expect its operation resumption to result in a significant bounce back of the company’s share price. Meanwhile, its share price is currently trading at 0.12x 2017E PBV/ROE, on par with regional peers. We retain an “Underperform” rating. S1 operation resumes after a 23‐day temporary cessation Given the order of the National Council for Peace and Order announced in the Royal Thai Government Gazette on 23 Jun, 2017 granting authority to the Agricultural Land Reform Committee to allow the use of Agricultural Land Reform areas for any purpose other than agriculture until further notice, PTTEP immediately resumed the S1 operation in the areas of the Agricultural Land Reform after receiving the notification letter from the Department of Mineral Fuels on 26 Jun, 2017. The project temporarily ceased operations for a total of 23 days from 3‐25 Jun, 2017. Negligible impact to 2017E earnings and TP With the 23‐day temporary cessation of the S1 operation in the areas of the Agricultural Land Reform resulting in volume loss of 18kboe/d (including 15kboe/d of crude and 3kboe/d of natural gas and LPG), we make a negligible cut on PTTEP’s 2017E sales volume by the average of 1.1kboe/d (~0.4% to 301kboe/d) and its NP by Bt190mn in the year (~0.7% from earlier). As a result, there is no change to our TP at Bt99/share. Earnings forecasts remain at risk Our new 2017E sales volume projection for PTTEP at 301kboe/d reflects the negligible volume loss from the S1 project as mentioned above, as well as our earlier inclusion of possible lower gas nomination and the exercise of gas carried forward volume by PTT (with our last cut of 3% on its sales volume done in late Apr‐17), with the latter factor likely to be further downside risk to its 2018E sales volume (311kboe/d at current). Meanwhile, the sensitive oil price is another risk factor following the re‐emerging supply glut (particularly driven by the accelerating oil production from the US, as well as Libya and Nigeria), with our sensitivity study revealing that every US$5/bbl change in the oil price (vs. our Dubai assumptions of US$52/bbl in 2017E (YTD US$51.4/bbl) and US$60/bbl in 2018E) will have a 9‐11% impact (~Bt2.8‐3.0bn/year) on our earnings estimates and a Bt5/share impact on our DCF‐based TP. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 184,411 (31,590) (8.24) ‐258.8% 3.00 102.98 2015 nm 2.56 0.84 3.5% ‐7.7% ‐2.2%
2016 150,217 12,860 2.76 133.5% 3.25 102.77 2016 31.43 2.83 0.84 3.7% 3.1% ‐10.5%
2017E 155,770 28,136 7.09 156.8% 3.54 106.31 2017E 12.24 2.69 0.82 4.1% 6.8% ‐10.8%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 170,180 33,460 8.43 18.9% 3.62 111.11 2018E 10.29 2.15 0.78 4.2% 7.8% ‐19.3%
2019E 165,309 30,789 7.76 ‐8.0% 3.72 115.15 2019E 11.19 1.85 0.75 4.3% 6.9% ‐28.6%
Figure 1: PTTEP’s 2017E earnings revision
Petroleum sales volume (boe/d) Dubai (US$/bbl) Average selling price (US$/boe) Unit cost (US$/boe) Sales (Btmn) EBITDA (Btmn) Core profit (loss) (Btmn) Net profit (Btmn) EPS (Bt) 17E DCF‐based TP (Bt)
2017E New 300,810 52 40 30 155,770 110,920 28,136 28,136 7.09 99
Old 301,944 52 40 30 156,479 111,423 28,327 28,327 7.14 99
% chg. from old ‐0.4 0.0 ‐0.1 ‐0.2 ‐0.5 ‐0.5 ‐0.7 ‐0.7 ‐0.7
2018E Maintained 310,552 60 42 31 170,180 120,470 33,460 33,460 8.43
Source: KT ZMICO Research
Figure 2: PTTEP’s PBV band Source: Bloomberg, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt)
2015 184,411 (122,198) 62,213 (23,904) 130,705 92,396 38,309 (8,582) 2,641 32,368 (17,085) 2,545 (49,729) 311 (31,590) (8.24) (8.24) 14,183 3.57 3.00
2016 150,217 (96,500) 53,717 (20,359) 106,726 73,368 33,358 (8,274) 2,528 27,612 (10,040) (4,197) (816) 301 12,860 2.76 2.76 19,608 4.94 3.25
2017E 155,770 (87,070) 68,700 (22,596) 110,920 64,816 46,104 (6,526) 2,300 41,878 (13,991) 0 0 250 28,136 7.09 7.09 28,136 7.09 3.54
2018E 170,180 (93,915) 76,266 (25,161) 120,470 69,365 51,105 (5,962) 2,300 47,442 (14,233) 0 0 250 33,460 8.43 8.43 33,460 8.43 3.62
2019E 165,309 (94,485) 70,824 (24,241) 115,638 69,054 46,584 (5,349) 2,300 43,534 (13,060) 0 0 315 30,789 7.76 7.76 30,789 7.76 3.72
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 Total liab. & shareholder equity
2015 117,637 20,212 16,293 348,342 206,379 708,864 0 108,455 300,053 3,970 408,811 708,864
2016 144,102 16,438 13,738 305,782 196,830 676,890 0 101,459 268,906 3,970 407,984 676,890
2017E 175,982 17,071 10,735 326,139 183,914 713,841 13,125 117,375 291,789 3,970 422,052 713,841
2018E 200,606 18,650 11,579 312,060 172,927 715,821 18,821 96,750 274,697 3,970 441,124 715,821
2019E 227,714 18,116 11,649 290,481 163,145 711,105 8,200 88,550 253,971 3,970 457,134 711,105
CASH FLOW (Btm) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital & 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)
2015 (31,590) (2,545) 92,396 32,470 90,731 (62,379)
2016 12,860 4,197 73,368 (2,402) 88,024 (30,878)
2017E 28,136 0 64,816 (1,517) 91,436 (85,173)
2018E 33,460 0 69,365 (2,532) 100,293 (55,286)
2019E 30,789 0 69,054 349 100,192 (47,475)
(62,379) (30,936) 37,884 (11,910) (35,315) (40,277) (11,925) 28,352 7.14
(30,878) (6,996) 2,629 (15,143) (11,172) (30,682) 26,464 57,146 14.39
(85,173) 29,041 250 (14,068) 10,395 25,618 31,881 6,263 1.58
(55,286) (14,929) 250 (14,388) 8,683 (20,384) 24,623 45,007 11.34
(47,475) (18,821) 315 (14,779) 7,676 (25,608) 27,109 52,717 13.28
2015 (23.8) (23.8) (258.8) 33.7 70.9 20.8 (17.1) 7.7 52.8
2016 (18.5) (18.3) 133.5 35.8 71.0 22.2 8.6 13.1 36.4
2017E 3.7 3.9 156.8 44.1 71.2 29.6 18.1 18.1 33.4
2018E 9.3 8.6 18.9 44.8 70.8 30.0 19.7 19.7 30.0
2019E (2.9) (4.0) (8.0) 42.8 70.0 28.2 18.6 18.6 30.0
PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
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Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TTL, NMG, SAWAD, TFD.
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
