The Bangchak Petroleum - Global Alliance Partners
The Bangchak Petroleum
Buy (17E TP Bt42.00)
Company Update
Close Bt36.25
Energy & Utilities August 11, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
In‐line 2Q17 earnings Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
4.035
4.235
KT ZMICO vs. consensus Share data
4.6%
8.4%
Reuters / Bloomberg
BCP.BK/BCP TB
Paid‐up Shares (m)
1,376.92
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
50.00/1,501.00
Foreign limit / actual (%)
25.00/15.67
52 week High / Low (Bt)
36.75/28.25
Avg. daily T/O (shares 000)
4,745.00
NVDR (%)
9.06
Estimated free float (%)
59.89
Beta
0.86
URL
www.bangchak.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Note: An executive of KT ZMICO Securities is also a member of BCP’s board.
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Well‐diversified earnings; growth story intact Given the company’s well‐diversified earnings, as well as the growth stories of BCPG and its 3E project (fully complete in 2020E), we maintain a Buy rating on BCP (17E TP : Bt42). Weak 2Q17 NP of Bt993mn as expected BCP delivered weak NP of Bt993mn in 2Q17 (‐59% YoY, ‐52% QoQ), in line with our forecast of Bt919mn. The EBITDA contribution was lower in almost businesses in 2Q17, led by the refinery given lower market GRM and stock loss (~Bt1.0bn), followed by the marketing business with smaller sales volume and a weakening margin (to 1,504mn litres and Bt0.83/litre, respectively) against higher promotional expenses, as well as the biodiesel business with an Bt80mn inventory loss following the decrease in the price of crude palm oil. The exception was the solar business, which delivered a higher EBITDA contribution both YoY and QoQ in 2Q17 thanks to larger power generation to 82.48GWh, mainly driven by the new Solar Coop in Thailand and the two new solar projects in Japan (Nikaho and Nagi), along with the first profit contribution from the wind project in the Philippines. Moreover, there was a tax credit in 2Q17 given an income tax refund from 2007 totaling Bt226mn. Stock loss behind the lower accounting GRM Its refinery marked a high crude run at 114kbd in 2Q17. Meanwhile, its market GRM marked a decline QoQ to US$6.38/bbl in the quarter (vs. US$7.07/bbl in 1Q17), largely blamed on the impact of the 22‐day planned shutdown at the Hydrocracking Unit with only a simple refining margin enjoyed during the period. Given the impact of stock loss of US$2.82/bbl against hedging gain of US$0.63/bbl, its accounting GRM stayed low at US$4.18/bbl in 2Q17 (vs. US$8.79/bbl in 2Q16 and US$7.96/bbl in 1Q17). 2017E NP slightly fine‐tuned We slightly fine‐tune BCP’s 2017E NP by +2%, mainly due to BCPG’s one‐ off positively adjusted transaction with SunEdison. We are comfortable with our 2017E forecasts calling for Bt13bn EBITDA and Bt5.6bn core profit (with the 1H17 figures accounting for 44% and 46%, respectively), with no refinery shutdown and a higher profit contribution from BCPG as the major drivers (due to the kickoff of new solar projects in Japan in the pipeline, and the profit contribution from newly‐acquired projects, including wind and geothermal projects). 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 (%)
2015 151,140 4,118 4,151 3.01 495.55 2.00 25.77 2015 12.04 6.48 1.41 5.5% 12.1% 60.1%
2016 144,705 4,234 4,773 3.47 15.28 1.80 28.72 2016 10.45 6.56 1.26 5.0% 12.7% 47.1%
2017E 146,564 5,648 5,809 4.22 21.58 2.11 30.83 2017E 8.59 6.87 1.18 5.8% 14.2% 94.5%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 138,271 6,291 6,321 4.59 8.81 2.30 33.12 2018E 7.90 6.74 1.09 6.3% 14.4% 93.8%
2019E 155,692 6,963 6,933 5.03 9.67 2.52 35.64 2019E 7.20 6.20 1.02 6.9% 14.6% 90.1%
Figure 1: BCP’s 2Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Extraordinary Items Gn (Ls) from affiliates
Minority interests Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (x) Current ratio (x) Interest coverage (x) Debt / equity (x) BVPS (Bt) ROE (%)
2Q16
1Q17
2Q17E
37,262 4,270 3,978 (327) 111 (458) 252 0 (6) 3 2,412 2,160 1.75 11.5 10.7 6.5 2.3 8.7 0.9 26.8 26.1
43,995 4,026 3,795 (355) 164 (482) 307 (39) 18 (114) 2,084 1,816 1.51 9.2 8.6 4.7 1.8 7.3 0.9 30.2 20.0
42,828 2,363 1,966 (339) 373 109 73 159 54 (153) 993 761 0.72 5.5 4.6 2.3 1.9 2.1 0.9 29.9 9.6
% YoY
% QoQ
14.9 (44.7) (50.6) 3.7 236.8 nm (70.9) nm nm (58.9) (64.8) (58.9)
(2.7) (41.3) (48.2) (4.6) 127.2 nm (76.2) nm 205.6 33.6 (52.4) (58.1) (52.4)
41,380
1H16
1H17E
67,538 5,213 4,813 (699) 400 (290) 393 229 7 75 2,681 2,060 1.95 7.7 7.1 4.0 2.3 3.7 0.9 26.8 14.5
86,823 6,389 5,761 (693) 538 (372) 381 119 72 (267) 3,076 2,576 2.23 7.4 6.6 3.5 1.9 4.8 0.9 29.9 14.9
% YoY 28.6 22.6 19.7 (0.9) 34.5 28.5 (3.0) (47.8) 963.3 nm 14.7 25.1 14.5
2016
2017E
144,705 11,896 10,442 (1,484) 634 (689) 276 263 21 44 4,773 4,234 3.47 8.2 7.2 3.3 1.7 3.8 1.0 28.7 12.7
146,564 13,658 13,100 (1,650) 235 (1,066) 60 101 474 (734) 5,809 5,648 4.22 9.3 8.9 4.0 1.9 5.1 1.0 30.8 14.2
Source: KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
% YoY
(% 17E)
1.3 14.8 25.5 11.2 (63.0) 54.7 (78.3) (61.6) 2,160. nm 21.7 33.4 21.6
59% 47% 44% 42% 229% 35% 635% 118% 15% 36% 53% 46% 53%
YTD
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 (%)
2014 183,016 (178,473) 4,543 (4,480) 3,377 3,313 63 (1,427) 932 (431) 691 758 (393) 5 67 696 0.51 0.51 331 0.24 1.00
2015 151,140 (139,686) 11,454 (5,175) 10,987 4,708 6,279 (1,615) 61 4,725 (673) 22 11 12 53 4,151 3.01 3.01 4,118 2.99 2.00
2016 144,705 (132,809) 11,896 (6,189) 10,442 4,734 5,707 (1,484) 634 4,858 (689) 276 263 21 44 4,773 3.47 3.37 4,234 3.07 1.80
2017E 146,564 (132,906) 13,658 (5,269) 13,100 4,711 8,389 (1,650) 235 6,974 (1,066) 60 101 474 (734) 5,809 4.22 4.22 5,648 4.10 2.11
2018E 138,271 (124,582) 13,689 (4,980) 13,748 5,039 8,708 (1,725) 245 7,229 (1,148) 30 0 1,128 (918) 6,321 4.59 4.59 6,291 4.57 2.30
2019E 155,692 (140,566) 15,126 (5,590) 15,189 5,653 9,536 (1,582) 245 8,199 (1,322) (30) 0 1,173 (1,087) 6,933 5.03 5.03 6,963 5.06 2.52
2014 8,577 7,095 14,059 39,532 7,703 76,966 1,312 28,913 43,000 1,377 33,309 657 76,966
2015 12,390 5,977 13,945 41,687 7,943 81,942 1,026 32,675 45,959 1,377 35,481 502 81,942
2016 21,006 7,690 14,560 48,401 10,126 101,783 11,141 28,483 57,874 1,377 39,543 4,366 101,783
2017E 3,857 8,834 16,386 52,516 23,650 105,243 5,460 38,500 57,696 1,377 42,447 5,100 105,243
2018E 386 8,334 15,359 58,657 25,253 107,989 2,853 40,325 56,364 1,377 45,608 6,017 107,989
2019E 347 9,384 17,330 60,822 26,980 114,864 7,197 37,346 58,686 1,377 49,074 7,104 114,864
2014 696 (758) 3,313 169 3,421 (8,822)
2015 4,151 (22) 4,708 1,552 10,389 (6,881)
2016 4,773 (276) 4,734 3,485 12,716 (11,825)
2017E 5,809 (60) 4,711 (7,765) 2,696 (21,532)
2018E 6,321 (30) 5,039 374 11,704 (11,883)
2019E 6,933 30 5,653 (2,601) 10,015 (8,555)
(8,822) 9,289 (180) (1,859) (531) 6,719 1,318 (5,401) (3.92)
(6,881) 3,477 (536) (1,377) (1,258) 306 3,813 3,508 2.55
(11,825) 5,923 2,334 (2,754) 2,220 7,724 8,616 892 0.63
(21,532) 4,335 (412) (2,550) 315 1,687 (17,149) (18,836) (13.68)
(11,883) (782) (45) (2,905) 439 (3,293) (3,472) (179) (0.13)
(8,555) 1,366 (219) (3,161) 516 (1,498) (39) 1,460 1.06
2014 (1.9) (55.8) (85.0) 2.5 1.8 0.0 0.4 0.2 160.0
2015 (17.4) 225.4 495.6 7.6 7.3 4.2 2.7 2.7 14.2
2016 (4.3) (5.0) 15.3 8.2 7.2 3.9 3.3 2.9 14.2
2017E 1.3 25.5 21.6 9.3 8.9 5.7 4.0 3.9 15.3
2018E (5.7) 4.9 8.8 9.9 9.9 6.3 4.6 4.5 15.9
2019E 12.6 10.5 9.7 9.7 9.8 6.1 4.5 4.5 16.1
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.
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 returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. 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
Buy (17E TP Bt42.00)
Company Update
Close Bt36.25
Energy & Utilities August 11, 2017
Earnings upgrade / Earnings downgrade / Overview unchanged
In‐line 2Q17 earnings Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
4.035
4.235
KT ZMICO vs. consensus Share data
4.6%
8.4%
Reuters / Bloomberg
BCP.BK/BCP TB
Paid‐up Shares (m)
1,376.92
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
50.00/1,501.00
Foreign limit / actual (%)
25.00/15.67
52 week High / Low (Bt)
36.75/28.25
Avg. daily T/O (shares 000)
4,745.00
NVDR (%)
9.06
Estimated free float (%)
59.89
Beta
0.86
URL
www.bangchak.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Note: An executive of KT ZMICO Securities is also a member of BCP’s board.
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
Well‐diversified earnings; growth story intact Given the company’s well‐diversified earnings, as well as the growth stories of BCPG and its 3E project (fully complete in 2020E), we maintain a Buy rating on BCP (17E TP : Bt42). Weak 2Q17 NP of Bt993mn as expected BCP delivered weak NP of Bt993mn in 2Q17 (‐59% YoY, ‐52% QoQ), in line with our forecast of Bt919mn. The EBITDA contribution was lower in almost businesses in 2Q17, led by the refinery given lower market GRM and stock loss (~Bt1.0bn), followed by the marketing business with smaller sales volume and a weakening margin (to 1,504mn litres and Bt0.83/litre, respectively) against higher promotional expenses, as well as the biodiesel business with an Bt80mn inventory loss following the decrease in the price of crude palm oil. The exception was the solar business, which delivered a higher EBITDA contribution both YoY and QoQ in 2Q17 thanks to larger power generation to 82.48GWh, mainly driven by the new Solar Coop in Thailand and the two new solar projects in Japan (Nikaho and Nagi), along with the first profit contribution from the wind project in the Philippines. Moreover, there was a tax credit in 2Q17 given an income tax refund from 2007 totaling Bt226mn. Stock loss behind the lower accounting GRM Its refinery marked a high crude run at 114kbd in 2Q17. Meanwhile, its market GRM marked a decline QoQ to US$6.38/bbl in the quarter (vs. US$7.07/bbl in 1Q17), largely blamed on the impact of the 22‐day planned shutdown at the Hydrocracking Unit with only a simple refining margin enjoyed during the period. Given the impact of stock loss of US$2.82/bbl against hedging gain of US$0.63/bbl, its accounting GRM stayed low at US$4.18/bbl in 2Q17 (vs. US$8.79/bbl in 2Q16 and US$7.96/bbl in 1Q17). 2017E NP slightly fine‐tuned We slightly fine‐tune BCP’s 2017E NP by +2%, mainly due to BCPG’s one‐ off positively adjusted transaction with SunEdison. We are comfortable with our 2017E forecasts calling for Bt13bn EBITDA and Bt5.6bn core profit (with the 1H17 figures accounting for 44% and 46%, respectively), with no refinery shutdown and a higher profit contribution from BCPG as the major drivers (due to the kickoff of new solar projects in Japan in the pipeline, and the profit contribution from newly‐acquired projects, including wind and geothermal projects). 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 (%)
2015 151,140 4,118 4,151 3.01 495.55 2.00 25.77 2015 12.04 6.48 1.41 5.5% 12.1% 60.1%
2016 144,705 4,234 4,773 3.47 15.28 1.80 28.72 2016 10.45 6.56 1.26 5.0% 12.7% 47.1%
2017E 146,564 5,648 5,809 4.22 21.58 2.11 30.83 2017E 8.59 6.87 1.18 5.8% 14.2% 94.5%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 138,271 6,291 6,321 4.59 8.81 2.30 33.12 2018E 7.90 6.74 1.09 6.3% 14.4% 93.8%
2019E 155,692 6,963 6,933 5.03 9.67 2.52 35.64 2019E 7.20 6.20 1.02 6.9% 14.6% 90.1%
Figure 1: BCP’s 2Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gain (loss) Extraordinary Items Gn (Ls) from affiliates
Minority interests Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (x) Current ratio (x) Interest coverage (x) Debt / equity (x) BVPS (Bt) ROE (%)
2Q16
1Q17
2Q17E
37,262 4,270 3,978 (327) 111 (458) 252 0 (6) 3 2,412 2,160 1.75 11.5 10.7 6.5 2.3 8.7 0.9 26.8 26.1
43,995 4,026 3,795 (355) 164 (482) 307 (39) 18 (114) 2,084 1,816 1.51 9.2 8.6 4.7 1.8 7.3 0.9 30.2 20.0
42,828 2,363 1,966 (339) 373 109 73 159 54 (153) 993 761 0.72 5.5 4.6 2.3 1.9 2.1 0.9 29.9 9.6
% YoY
% QoQ
14.9 (44.7) (50.6) 3.7 236.8 nm (70.9) nm nm (58.9) (64.8) (58.9)
(2.7) (41.3) (48.2) (4.6) 127.2 nm (76.2) nm 205.6 33.6 (52.4) (58.1) (52.4)
41,380
1H16
1H17E
67,538 5,213 4,813 (699) 400 (290) 393 229 7 75 2,681 2,060 1.95 7.7 7.1 4.0 2.3 3.7 0.9 26.8 14.5
86,823 6,389 5,761 (693) 538 (372) 381 119 72 (267) 3,076 2,576 2.23 7.4 6.6 3.5 1.9 4.8 0.9 29.9 14.9
% YoY 28.6 22.6 19.7 (0.9) 34.5 28.5 (3.0) (47.8) 963.3 nm 14.7 25.1 14.5
2016
2017E
144,705 11,896 10,442 (1,484) 634 (689) 276 263 21 44 4,773 4,234 3.47 8.2 7.2 3.3 1.7 3.8 1.0 28.7 12.7
146,564 13,658 13,100 (1,650) 235 (1,066) 60 101 474 (734) 5,809 5,648 4.22 9.3 8.9 4.0 1.9 5.1 1.0 30.8 14.2
Source: KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
% YoY
(% 17E)
1.3 14.8 25.5 11.2 (63.0) 54.7 (78.3) (61.6) 2,160. nm 21.7 33.4 21.6
59% 47% 44% 42% 229% 35% 635% 118% 15% 36% 53% 46% 53%
YTD
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 (%)
2014 183,016 (178,473) 4,543 (4,480) 3,377 3,313 63 (1,427) 932 (431) 691 758 (393) 5 67 696 0.51 0.51 331 0.24 1.00
2015 151,140 (139,686) 11,454 (5,175) 10,987 4,708 6,279 (1,615) 61 4,725 (673) 22 11 12 53 4,151 3.01 3.01 4,118 2.99 2.00
2016 144,705 (132,809) 11,896 (6,189) 10,442 4,734 5,707 (1,484) 634 4,858 (689) 276 263 21 44 4,773 3.47 3.37 4,234 3.07 1.80
2017E 146,564 (132,906) 13,658 (5,269) 13,100 4,711 8,389 (1,650) 235 6,974 (1,066) 60 101 474 (734) 5,809 4.22 4.22 5,648 4.10 2.11
2018E 138,271 (124,582) 13,689 (4,980) 13,748 5,039 8,708 (1,725) 245 7,229 (1,148) 30 0 1,128 (918) 6,321 4.59 4.59 6,291 4.57 2.30
2019E 155,692 (140,566) 15,126 (5,590) 15,189 5,653 9,536 (1,582) 245 8,199 (1,322) (30) 0 1,173 (1,087) 6,933 5.03 5.03 6,963 5.06 2.52
2014 8,577 7,095 14,059 39,532 7,703 76,966 1,312 28,913 43,000 1,377 33,309 657 76,966
2015 12,390 5,977 13,945 41,687 7,943 81,942 1,026 32,675 45,959 1,377 35,481 502 81,942
2016 21,006 7,690 14,560 48,401 10,126 101,783 11,141 28,483 57,874 1,377 39,543 4,366 101,783
2017E 3,857 8,834 16,386 52,516 23,650 105,243 5,460 38,500 57,696 1,377 42,447 5,100 105,243
2018E 386 8,334 15,359 58,657 25,253 107,989 2,853 40,325 56,364 1,377 45,608 6,017 107,989
2019E 347 9,384 17,330 60,822 26,980 114,864 7,197 37,346 58,686 1,377 49,074 7,104 114,864
2014 696 (758) 3,313 169 3,421 (8,822)
2015 4,151 (22) 4,708 1,552 10,389 (6,881)
2016 4,773 (276) 4,734 3,485 12,716 (11,825)
2017E 5,809 (60) 4,711 (7,765) 2,696 (21,532)
2018E 6,321 (30) 5,039 374 11,704 (11,883)
2019E 6,933 30 5,653 (2,601) 10,015 (8,555)
(8,822) 9,289 (180) (1,859) (531) 6,719 1,318 (5,401) (3.92)
(6,881) 3,477 (536) (1,377) (1,258) 306 3,813 3,508 2.55
(11,825) 5,923 2,334 (2,754) 2,220 7,724 8,616 892 0.63
(21,532) 4,335 (412) (2,550) 315 1,687 (17,149) (18,836) (13.68)
(11,883) (782) (45) (2,905) 439 (3,293) (3,472) (179) (0.13)
(8,555) 1,366 (219) (3,161) 516 (1,498) (39) 1,460 1.06
2014 (1.9) (55.8) (85.0) 2.5 1.8 0.0 0.4 0.2 160.0
2015 (17.4) 225.4 495.6 7.6 7.3 4.2 2.7 2.7 14.2
2016 (4.3) (5.0) 15.3 8.2 7.2 3.9 3.3 2.9 14.2
2017E 1.3 25.5 21.6 9.3 8.9 5.7 4.0 3.9 15.3
2018E (5.7) 4.9 8.8 9.9 9.9 6.3 4.6 4.5 15.9
2019E 12.6 10.5 9.7 9.7 9.8 6.1 4.5 4.5 16.1
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.
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 returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. 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
