Somboon Advance Technology
Somboon Advance Technology Earnings Review
Underperform (TP Bt14.20) Close Bt14.40
Automotive
Beat forecast/Below forecast/In line
August 10, 2016
Margin expansion boosted 2Q16 results Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
1.448
1.572
KT ZMICO vs. consensus Share data
‐1.9%
0.5%
Reuters / Bloomberg
SAT.BK/SAT TB
Paid‐up Shares (m)
425.19
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
6.00/175.00
Foreign limit / actual (%)
49.00/22.28
52 week High / Low (Bt)
18.40/12.40
Avg. daily T/O (shares 000) NVDR (%)
465.00 3.88
UNDERPERFORM rating maintained SAT reported in‐line 2Q16 results. Although we expect a better outlook in 2H16, its 2016E earnings remain weak compared to peers due to slow orders from both non‐auto parts and big trucks. This leads us to keep our UNDERPERFORM rating unchanged. 2Q16 NP came out within expectation SAT recorded a net profit of Bt118mn (EPS: Bt0.28) in 2Q16, in line with our expectation and the street. The significant 81% increase YoY was attributed to higher sales with a better margin. Revenue gained 8%YoY to Bt1.97bn. Auto parts sales (86% of revenue) jumped 15%YoY, outweighing the 19%YoY reduction of non‐auto parts sales. Higher utilization led to GPM improvement from 11.8% last year to 14.2%. Its SG&A‐to‐sales ratio also fell to 8.4% from 9.3%. On a QoQ basis, its NP dropped 22% due to a seasonal decline in sales (‐10%QoQ). DPS of Bt0.19, goes XD on August 22 Its financial status remained strong with net DER of only 0.5x. SAT declared an interim DPS of Bt0.19 for its 1H16 operating performance, representing a 30% payout ratio. The XD sign will posted on August 22, implying a yield of 1.3% for the period. 2H16 tending to improve Its 1H16 earnings results account for 44% of our full‐year forecast. We keep our forecast unchanged thanks to auto sales recovery, particularly for one‐ton pickups on the back of increasing farm income and Kubota sales driven by the new model. Nevertheless, its 3Q16 results are likely to be weak YoY given the relatively high base last year due to Toyota’s ramp up of the production of its new pickup model. Financials and Valuation
53.83
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
Beta
0.64
Revenues (Btmn)
8,084
8,644
8,472
8,968
9,665
URL
www.satpcl.co.th
Estimated free float (%)
CGR
Anti‐
Level 4 (Certified)
corruption
Net profit (Btmn)
650
642
605
674
755
EPS (Bt)
1.53
1.51
1.42
1.58
1.77
Norm. EPS (Bt)
1.53
1.51
1.42
1.58
1.77
EPS growth (%)
(19.88)
(1.47)
(5.51)
11.33
11.98
Dividend (Bt) BV (Bt)
0.60
0.60
0.57
0.63
0.71
12.27
13.01
13.83
14.84
15.98 2018E
FY Ended 31 Dec
2014
2015
2016E
2017E
PER (x)
10.60
11.40
12.08
10.85
9.69
5.28
4.91
4.15
3.70
3.49
EV/EBITDA (x) PBV (x)
1.32
1.32
1.24
1.16
1.08
Waraporn Wiboonkanarak
Dividend yield (%)
3.70
3.51
3.31
3.69
4.13
Analyst, no. 2482
ROE (%) Net gearing (%)
12.88 34.47
11.94 17.61
10.61 7.65
11.05 0.91
11.51 1.69
[email protected] 66 (0) 2624‐6273
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: Earnings review Profit and Loss Statement (Btmn) Fiscal Year‐Ended Dec. 2Q15 Revenue 1,820 Gross profit 215 SG&A (169) EBITDA 321 Interest expense (31) Other income 46 Income tax (10) Net profit (loss) 65 Normalized profit (loss) 66 Reported EPS (Bt) 0.15 Gross margin 11.8% EBITDA margin 17.7% Net margin 3.6% Current ratio (x) 1.44 Interest coverage (x) 3.01 Debt to equity (x) 0.81 BVPS 12.50 ROE 10.8%
1Q16 2,194 304 (178) 352 (24) 30 (11) 151 145 0.35 13.9% 16.1% 6.9% 1.39 6.61 0.71 13.36 10.7%
2Q16 1,970 281 (165) 343 (22) 23 (7) 118 120 0.28 14.2% 17.4% 6.0% 1.38 6.24 0.66 13.23 11.9%
%QoQ ‐10.2% ‐7.8% ‐6.9% ‐2.5% ‐6.7% ‐23.9% ‐31.8% ‐21.7% ‐17.3% ‐21.7% 0.4% 1.4% ‐0.9%
%YoY 8.3% 30.6% ‐2.2% 6.9% ‐29.4% ‐50.5% ‐26.7% 80.9% 81.4% 80.9% 2.4% ‐0.2% 2.4%
‐1.0%
1H16 4,164 585 (343) 696 (46) 53 (18) 269 265 0.63 14.0% 16.7% 6.5% 1.37 6.43 0.66 5.8% 13.23 11.9%
%YoY ‐2.0% ‐1.2% ‐0.8% ‐9.5% ‐28.2% ‐27.4% ‐20.7% 3.8% 2.7% 3.8% 0.1% ‐1.4% 0.4%
2016E 8,472 1,261 (683) 1,573 (103) 132 (61) 605 605 1.42 14.9% 18.6% 7.1% 1.77 6.88 0.57 5.8% 13.25 12.6%
YTD %YoY (%2016E) ‐2.0% 49.2% 0.7% 46.4% 0.3% 50.2% ‐1.8% 44.2% ‐10.8% 44.4% ‐23.2% 40.2% 40.0% 29.5% ‐5.7% 44.4% ‐5.5% 43.8% ‐5.7% 44.4%
0.0%
Source: Bloomberg and KTZMICO Research Figure 2: Peers comparison Stock
Price (Bt) u 13.30 AH PCSGH 5.55 n 14.30 SAT n 173.50 STANLY SIMPLE AVERAGE
Mkt Cap (Btmn) 4,241 8,464 6,080 13,294
EPS Growth 2016E 2017E 14.7% 16.8% ‐8.0% 17.1% ‐5.5% 11.3% ‐19.6% 10.0%
PER (x) 2016E 2017E 11.95 10.23 17.24 14.72 10.05 9.02 12.69 11.53 12.98 11.38
Yield 2016E 2017E 2.4% 3.2% 5.4% 5.6% 4.0% 4.4% 3.0% 3.5% 3.7% 4.2%
ROE PEG 2016E 2017E 2016E 2017E 6.5% 7.2% 0.81 0.61 9.9% 11.3% nm 0.86 10.6% 11.1% nm 0.80 9.0% 9.6% nm 1.15 9.0% 9.8%
Source: Bloomberg and KTZMICO Research Figure 3: PER and PBV band 30.0
PER (x) 25.0
15.0
3.5 3.0 +2 SD
+1 S.D.
2.0 Averag
10.0 5.0
2.5
+1 SD
1.5 1.0
‐1 SD
Average ‐1 S.D.
0.5
Jan‐05 Jul‐05 Jan‐06 Jul‐06 Jan‐07 Jul‐07 Jan‐08 Jul‐08 Jan‐09 Jul‐09 Jan‐10 Jul‐10 Jan‐11 Jul‐11 Jan‐12 Jul‐12 Jan‐13 Jul‐13 Jan‐14 Jul‐14 Jan‐15 Jul‐15 Jan‐16 Jul‐16
0.0
0.0 Jan‐05 Jul‐05 Jan‐06 Jul‐06 Jan‐07 Jul‐07 Jan‐08 Jul‐08 Jan‐09 Jul‐09 Jan‐10 Jul‐10 Jan‐11 Jul‐11 Jan‐12 Jul‐12 Jan‐13 Jul‐13 Jan‐14 Jul‐14 Jan‐15 Jul‐15 Jan‐16 Jul‐16
20.0
PBV (x)
4.0
Source: Bloomberg and KTZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 4: Operating summary
SAT's sales breakdown by products 100% 14% 18% 13% 90% 23% 80% 14% 12% 19% 70% 9% 7% 8% 19% 60% 8% 6% 7% 8% 50% 9% 9% 9% 7% 40% 15% 11% 16% 9% 6% 30% 20% 10%
31%
37%
18% 20% 20% 17% 14%
19% 19% 7% 6% 5% 5% 7% 6% 6% 2% 2%
21% 19% 19%
Capacity Utilization 120%
5% 5% 14% 14%
16% 6% 6% 7% 5% 6% 6% 21% 19%
6% 6% 5%
21%
28% 28% 27% 27% 27% 27% 26% 26%
Others
100%
Casting/Machining
80% Coil spring Stabilizer bar
60%
Leaf spring
40%
Disc & Drum brake
20%
Axle shaft
0%
0% 1Q142Q143Q144Q141Q152Q153Q154Q151Q162Q16
1Q13
SAT's sales breakdown by customers 12% 12% 11% 11% 15% 20% 4% 4% 4% 7% 80% 6% 6% 4% 8% 7% 7% 5% 70% 7% 17% 17% 14% 15% 17% 60% 19% 50% 28% 28% 28% 26% 31% 40% 26% 30% 20% 10%
20% 20% 4% 6%
20 18 16 14 12 10 8 6 4 2
13% 15%
3% 6% 4% 6% 15% 12% 3% 6%
Others Nissan Honda
19% 19% 29% 36% 29% 29%
Isuzu Kubota Toyota
31% 28% 30% 25% 31% 31% 28% 20% 19% 19%
0% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Mitsubishi
4Q14
4Q15
Kubota: Production
Units: '000
100% 90%
1Q14
2
1
2
1
3 1
3
2
2
2
1
4
3 3
14
12
16 14 15 14 13 15 15 13 15
11 11
9
‐ 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q16
Tractor
Combine
Source: SAT
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, PACE, PLE, TPOLY, M‐CHAI, CI. KT ZMICO is a co‐underwriter of ALT, EKH, RJH.
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
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th
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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.
Underperform (TP Bt14.20) Close Bt14.40
Automotive
Beat forecast/Below forecast/In line
August 10, 2016
Margin expansion boosted 2Q16 results Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
1.448
1.572
KT ZMICO vs. consensus Share data
‐1.9%
0.5%
Reuters / Bloomberg
SAT.BK/SAT TB
Paid‐up Shares (m)
425.19
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
6.00/175.00
Foreign limit / actual (%)
49.00/22.28
52 week High / Low (Bt)
18.40/12.40
Avg. daily T/O (shares 000) NVDR (%)
465.00 3.88
UNDERPERFORM rating maintained SAT reported in‐line 2Q16 results. Although we expect a better outlook in 2H16, its 2016E earnings remain weak compared to peers due to slow orders from both non‐auto parts and big trucks. This leads us to keep our UNDERPERFORM rating unchanged. 2Q16 NP came out within expectation SAT recorded a net profit of Bt118mn (EPS: Bt0.28) in 2Q16, in line with our expectation and the street. The significant 81% increase YoY was attributed to higher sales with a better margin. Revenue gained 8%YoY to Bt1.97bn. Auto parts sales (86% of revenue) jumped 15%YoY, outweighing the 19%YoY reduction of non‐auto parts sales. Higher utilization led to GPM improvement from 11.8% last year to 14.2%. Its SG&A‐to‐sales ratio also fell to 8.4% from 9.3%. On a QoQ basis, its NP dropped 22% due to a seasonal decline in sales (‐10%QoQ). DPS of Bt0.19, goes XD on August 22 Its financial status remained strong with net DER of only 0.5x. SAT declared an interim DPS of Bt0.19 for its 1H16 operating performance, representing a 30% payout ratio. The XD sign will posted on August 22, implying a yield of 1.3% for the period. 2H16 tending to improve Its 1H16 earnings results account for 44% of our full‐year forecast. We keep our forecast unchanged thanks to auto sales recovery, particularly for one‐ton pickups on the back of increasing farm income and Kubota sales driven by the new model. Nevertheless, its 3Q16 results are likely to be weak YoY given the relatively high base last year due to Toyota’s ramp up of the production of its new pickup model. Financials and Valuation
53.83
FY Ended 31 Dec
2014
2015
2016E
2017E
2018E
Beta
0.64
Revenues (Btmn)
8,084
8,644
8,472
8,968
9,665
URL
www.satpcl.co.th
Estimated free float (%)
CGR
Anti‐
Level 4 (Certified)
corruption
Net profit (Btmn)
650
642
605
674
755
EPS (Bt)
1.53
1.51
1.42
1.58
1.77
Norm. EPS (Bt)
1.53
1.51
1.42
1.58
1.77
EPS growth (%)
(19.88)
(1.47)
(5.51)
11.33
11.98
Dividend (Bt) BV (Bt)
0.60
0.60
0.57
0.63
0.71
12.27
13.01
13.83
14.84
15.98 2018E
FY Ended 31 Dec
2014
2015
2016E
2017E
PER (x)
10.60
11.40
12.08
10.85
9.69
5.28
4.91
4.15
3.70
3.49
EV/EBITDA (x) PBV (x)
1.32
1.32
1.24
1.16
1.08
Waraporn Wiboonkanarak
Dividend yield (%)
3.70
3.51
3.31
3.69
4.13
Analyst, no. 2482
ROE (%) Net gearing (%)
12.88 34.47
11.94 17.61
10.61 7.65
11.05 0.91
11.51 1.69
[email protected] 66 (0) 2624‐6273
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: Earnings review Profit and Loss Statement (Btmn) Fiscal Year‐Ended Dec. 2Q15 Revenue 1,820 Gross profit 215 SG&A (169) EBITDA 321 Interest expense (31) Other income 46 Income tax (10) Net profit (loss) 65 Normalized profit (loss) 66 Reported EPS (Bt) 0.15 Gross margin 11.8% EBITDA margin 17.7% Net margin 3.6% Current ratio (x) 1.44 Interest coverage (x) 3.01 Debt to equity (x) 0.81 BVPS 12.50 ROE 10.8%
1Q16 2,194 304 (178) 352 (24) 30 (11) 151 145 0.35 13.9% 16.1% 6.9% 1.39 6.61 0.71 13.36 10.7%
2Q16 1,970 281 (165) 343 (22) 23 (7) 118 120 0.28 14.2% 17.4% 6.0% 1.38 6.24 0.66 13.23 11.9%
%QoQ ‐10.2% ‐7.8% ‐6.9% ‐2.5% ‐6.7% ‐23.9% ‐31.8% ‐21.7% ‐17.3% ‐21.7% 0.4% 1.4% ‐0.9%
%YoY 8.3% 30.6% ‐2.2% 6.9% ‐29.4% ‐50.5% ‐26.7% 80.9% 81.4% 80.9% 2.4% ‐0.2% 2.4%
‐1.0%
1H16 4,164 585 (343) 696 (46) 53 (18) 269 265 0.63 14.0% 16.7% 6.5% 1.37 6.43 0.66 5.8% 13.23 11.9%
%YoY ‐2.0% ‐1.2% ‐0.8% ‐9.5% ‐28.2% ‐27.4% ‐20.7% 3.8% 2.7% 3.8% 0.1% ‐1.4% 0.4%
2016E 8,472 1,261 (683) 1,573 (103) 132 (61) 605 605 1.42 14.9% 18.6% 7.1% 1.77 6.88 0.57 5.8% 13.25 12.6%
YTD %YoY (%2016E) ‐2.0% 49.2% 0.7% 46.4% 0.3% 50.2% ‐1.8% 44.2% ‐10.8% 44.4% ‐23.2% 40.2% 40.0% 29.5% ‐5.7% 44.4% ‐5.5% 43.8% ‐5.7% 44.4%
0.0%
Source: Bloomberg and KTZMICO Research Figure 2: Peers comparison Stock
Price (Bt) u 13.30 AH PCSGH 5.55 n 14.30 SAT n 173.50 STANLY SIMPLE AVERAGE
Mkt Cap (Btmn) 4,241 8,464 6,080 13,294
EPS Growth 2016E 2017E 14.7% 16.8% ‐8.0% 17.1% ‐5.5% 11.3% ‐19.6% 10.0%
PER (x) 2016E 2017E 11.95 10.23 17.24 14.72 10.05 9.02 12.69 11.53 12.98 11.38
Yield 2016E 2017E 2.4% 3.2% 5.4% 5.6% 4.0% 4.4% 3.0% 3.5% 3.7% 4.2%
ROE PEG 2016E 2017E 2016E 2017E 6.5% 7.2% 0.81 0.61 9.9% 11.3% nm 0.86 10.6% 11.1% nm 0.80 9.0% 9.6% nm 1.15 9.0% 9.8%
Source: Bloomberg and KTZMICO Research Figure 3: PER and PBV band 30.0
PER (x) 25.0
15.0
3.5 3.0 +2 SD
+1 S.D.
2.0 Averag
10.0 5.0
2.5
+1 SD
1.5 1.0
‐1 SD
Average ‐1 S.D.
0.5
Jan‐05 Jul‐05 Jan‐06 Jul‐06 Jan‐07 Jul‐07 Jan‐08 Jul‐08 Jan‐09 Jul‐09 Jan‐10 Jul‐10 Jan‐11 Jul‐11 Jan‐12 Jul‐12 Jan‐13 Jul‐13 Jan‐14 Jul‐14 Jan‐15 Jul‐15 Jan‐16 Jul‐16
0.0
0.0 Jan‐05 Jul‐05 Jan‐06 Jul‐06 Jan‐07 Jul‐07 Jan‐08 Jul‐08 Jan‐09 Jul‐09 Jan‐10 Jul‐10 Jan‐11 Jul‐11 Jan‐12 Jul‐12 Jan‐13 Jul‐13 Jan‐14 Jul‐14 Jan‐15 Jul‐15 Jan‐16 Jul‐16
20.0
PBV (x)
4.0
Source: Bloomberg and KTZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 4: Operating summary
SAT's sales breakdown by products 100% 14% 18% 13% 90% 23% 80% 14% 12% 19% 70% 9% 7% 8% 19% 60% 8% 6% 7% 8% 50% 9% 9% 9% 7% 40% 15% 11% 16% 9% 6% 30% 20% 10%
31%
37%
18% 20% 20% 17% 14%
19% 19% 7% 6% 5% 5% 7% 6% 6% 2% 2%
21% 19% 19%
Capacity Utilization 120%
5% 5% 14% 14%
16% 6% 6% 7% 5% 6% 6% 21% 19%
6% 6% 5%
21%
28% 28% 27% 27% 27% 27% 26% 26%
Others
100%
Casting/Machining
80% Coil spring Stabilizer bar
60%
Leaf spring
40%
Disc & Drum brake
20%
Axle shaft
0%
0% 1Q142Q143Q144Q141Q152Q153Q154Q151Q162Q16
1Q13
SAT's sales breakdown by customers 12% 12% 11% 11% 15% 20% 4% 4% 4% 7% 80% 6% 6% 4% 8% 7% 7% 5% 70% 7% 17% 17% 14% 15% 17% 60% 19% 50% 28% 28% 28% 26% 31% 40% 26% 30% 20% 10%
20% 20% 4% 6%
20 18 16 14 12 10 8 6 4 2
13% 15%
3% 6% 4% 6% 15% 12% 3% 6%
Others Nissan Honda
19% 19% 29% 36% 29% 29%
Isuzu Kubota Toyota
31% 28% 30% 25% 31% 31% 28% 20% 19% 19%
0% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Mitsubishi
4Q14
4Q15
Kubota: Production
Units: '000
100% 90%
1Q14
2
1
2
1
3 1
3
2
2
2
1
4
3 3
14
12
16 14 15 14 13 15 15 13 15
11 11
9
‐ 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q16
Tractor
Combine
Source: SAT
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, PACE, PLE, TPOLY, M‐CHAI, CI. KT ZMICO is a co‐underwriter of ALT, EKH, RJH.
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
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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.
