Singer Thailand
Singer Thailand Buy (15E TP Bt19.50)
Earnings Review
Close Bt13.70
Commerce March 2, 2015
Beat forecast /Below forecast/In line
4Q14 results disappointed
FY15
FY16
Consensus EPS (Bt)
1.277
1.540
KT ZMICO vs. consensus Share data
‐11.5%
‐13.0%
Reuters / Bloomberg
SING.BK/SINGER TB
Paid‐up Shares (m)
270.00
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
4.00/114.00
Foreign limit / actual (%)
49.00/41.11
52 week High / Low (Bt)
21.70/11.70
Avg. daily T/O (shares 000) NVDR (%)
1,447.00 1.27
Estimated free float (%)
59.97
Beta
0.69
URL
www.singerthai.co.th
CGR
Weak market conditions remain SINGER posted weaker‐than‐expected earnings in 4Q14 due to the slow pace of domestic spending recovery. SINGER’s near‐term share price is likely to underperform as long as there is no clear signal of spending recovery, although its attractive yield may act as a cushion. Our BUY rating is based on its management strength with fast‐moving marketing reactions amid the unfavorable outlook. 2014 results weaker than expected SINGER posted a net profit of Bt241mn (EPS: Bt0.84) in 2014, decreasing 25%YoY. This was weaker than our forecast and the consensus by 9% and 18%. The weak results were attributed to softer sales and a lower margin. Total revenue declined 6%YoY mainly due to a decrease in product sales (‐11%YoY), chiefly in electrical home appliance products. The 111bps reduction in the operating margin was caused by a higher SG&A‐to‐sales ratio. Its NPL ratio climbed to 6.5% from 6.0% a year earlier while the percentage of paying accounts from the total portfolio fell to 90.2% from 91.7% in 2013. Disappointing 4Q14 earnings SINGER’s 4Q14 net profit plummeted by 43%QoQ and 47%YoY to Bt25mn (EPS: Bt0.09), the lowest in four years. Total revenue fell 19%YoY and 22%QoQ, weighed on heavily by weak spending in rural areas. Its gross margin softened to 50.3% on a higher proportion of low‐margin commercial products while the SG&A‐to‐sales ratio remained at a high level. Surprise on higher DPS SINGER surprised us by announcing it will pay a DPS of Bt0.53 for the 2014 performance, representing a yield of 4%. This implies a payout ratio of 60%, up from the average of 40% in the past couple years. Slow pace of earnings recovery expected The Bank of Thailand’s economic conditions report in January showed a sluggish recovery of private spending weighed down by low farm prices and elevated household debt levels. This signals that SINGER’s earnings may recover at a slower pace than expected, potentially posing downside risk to our forecast.
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
Financial and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) 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 (%)
2012 2,951 226 0.84 59% 0.30 4.42 2012 19.93 14.15 3.78 1.8% 20.8% 47.9%
2013 3,627 321 1.19 42% 0.45 5.30 2013 15.50 10.73 3.47 2.4% 24.4% 1.6%
2014 3,427 241 0.89 ‐25% 0.53 5.84 2014 14.20 9.08 2.17 4.2% 16.0% ‐0.2%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2015E 3,825 306 1.13 27% 0.45 6.45 2015E 12.07 8.21 2.12 3.3% 18.5% 9.9%
2016E 4,232 363 1.34 18% 0.54 7.34 2016E 10.19 7.40 1.87 3.9% 19.5% 8.3%
Figure 1: 2014 earnings review
Source: The Company and KT Zmico Research Figure 2: Operating summary
Source: SINGER and KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: PER and PBV band (X)
PER (x)
30.00 25.00
+2.0SD
20.00 15.00
+1.0SD
10.00 5.00 ‐ (5.00)
‐0.5SD
(10.00)
Feb‐15
Jan‐14
Dec‐12
Dec‐11
Nov‐10
Oct‐09
Jul‐08
Jun‐07
May‐06
Mar‐05
Feb‐04
Feb‐03
Jan‐02
(15.00)
Source: Bloomberg and KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
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 return over six months period because of specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to below market return over six months period because of 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 4 of 4
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 Bt13.70
Commerce March 2, 2015
Beat forecast /Below forecast/In line
4Q14 results disappointed
FY15
FY16
Consensus EPS (Bt)
1.277
1.540
KT ZMICO vs. consensus Share data
‐11.5%
‐13.0%
Reuters / Bloomberg
SING.BK/SINGER TB
Paid‐up Shares (m)
270.00
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
4.00/114.00
Foreign limit / actual (%)
49.00/41.11
52 week High / Low (Bt)
21.70/11.70
Avg. daily T/O (shares 000) NVDR (%)
1,447.00 1.27
Estimated free float (%)
59.97
Beta
0.69
URL
www.singerthai.co.th
CGR
Weak market conditions remain SINGER posted weaker‐than‐expected earnings in 4Q14 due to the slow pace of domestic spending recovery. SINGER’s near‐term share price is likely to underperform as long as there is no clear signal of spending recovery, although its attractive yield may act as a cushion. Our BUY rating is based on its management strength with fast‐moving marketing reactions amid the unfavorable outlook. 2014 results weaker than expected SINGER posted a net profit of Bt241mn (EPS: Bt0.84) in 2014, decreasing 25%YoY. This was weaker than our forecast and the consensus by 9% and 18%. The weak results were attributed to softer sales and a lower margin. Total revenue declined 6%YoY mainly due to a decrease in product sales (‐11%YoY), chiefly in electrical home appliance products. The 111bps reduction in the operating margin was caused by a higher SG&A‐to‐sales ratio. Its NPL ratio climbed to 6.5% from 6.0% a year earlier while the percentage of paying accounts from the total portfolio fell to 90.2% from 91.7% in 2013. Disappointing 4Q14 earnings SINGER’s 4Q14 net profit plummeted by 43%QoQ and 47%YoY to Bt25mn (EPS: Bt0.09), the lowest in four years. Total revenue fell 19%YoY and 22%QoQ, weighed on heavily by weak spending in rural areas. Its gross margin softened to 50.3% on a higher proportion of low‐margin commercial products while the SG&A‐to‐sales ratio remained at a high level. Surprise on higher DPS SINGER surprised us by announcing it will pay a DPS of Bt0.53 for the 2014 performance, representing a yield of 4%. This implies a payout ratio of 60%, up from the average of 40% in the past couple years. Slow pace of earnings recovery expected The Bank of Thailand’s economic conditions report in January showed a sluggish recovery of private spending weighed down by low farm prices and elevated household debt levels. This signals that SINGER’s earnings may recover at a slower pace than expected, potentially posing downside risk to our forecast.
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
Financial and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) 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 (%)
2012 2,951 226 0.84 59% 0.30 4.42 2012 19.93 14.15 3.78 1.8% 20.8% 47.9%
2013 3,627 321 1.19 42% 0.45 5.30 2013 15.50 10.73 3.47 2.4% 24.4% 1.6%
2014 3,427 241 0.89 ‐25% 0.53 5.84 2014 14.20 9.08 2.17 4.2% 16.0% ‐0.2%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2015E 3,825 306 1.13 27% 0.45 6.45 2015E 12.07 8.21 2.12 3.3% 18.5% 9.9%
2016E 4,232 363 1.34 18% 0.54 7.34 2016E 10.19 7.40 1.87 3.9% 19.5% 8.3%
Figure 1: 2014 earnings review
Source: The Company and KT Zmico Research Figure 2: Operating summary
Source: SINGER and KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: PER and PBV band (X)
PER (x)
30.00 25.00
+2.0SD
20.00 15.00
+1.0SD
10.00 5.00 ‐ (5.00)
‐0.5SD
(10.00)
Feb‐15
Jan‐14
Dec‐12
Dec‐11
Nov‐10
Oct‐09
Jul‐08
Jun‐07
May‐06
Mar‐05
Feb‐04
Feb‐03
Jan‐02
(15.00)
Source: Bloomberg and KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
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 return over six months period because of specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to below market return over six months period because of 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 4 of 4
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.
