The Erawan Group - Global Alliance Partners
The Erawan Group Earnings Review
Buy (17E TP Bt6.20) Close Bt5.30
Tourism & Leisure August 11, 2017
Beat forecast/Below forecast/In‐line
Above expectations Results date: August 10, 2017 Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.181
0.206
KT ZMICO vs. consensus Share data
‐6.1%
‐7.8%
Reuters / Bloomberg
ERW.BK/ERW TB
Paid‐up Shares (m)
2,500.17
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
13.00/398.00
Foreign limit / actual (%)
49.00/17.54
52 week High / Low (Bt)
5.80/3.92
Avg. daily T/O (shares 000)
7,201.00
NVDR (%)
2.19
Estimated free float (%)
44.65
Beta
1.01
URL
www.theerawan.com
CGR
Anti‐corruption
n.a.
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6236
The best low‐season performance ever ERW reported a net profit at Bt57mn, +239%YoY on RevPAR that grew across the board. The result was 78% above our forecast and the street due mainly to lower costs than forecast. We still see ERW as benefitting the most from rising tourism in Thailand. We maintain our Buy recommendation and keep it as our top pick. RevPAR grew in all segments RevPAR of Luxury, Midscale, and Economy (Ibis) hotels grew 4%YoY, 10%YoY and 4%YoY, respectively. The growth was driven mainly by higher room rates while the occupancy rate showed a mixed result (flat for Luxury, +5% for Midscale, and ‐1% for Ibis). Phuket saw the highest revenue growth at 17%YoY from the continued turnaround of Russian tourists. Food and Beverage revenue increased by 6%YoY, which helped improve the overall EBITDA margin from 22.6% in 2Q16 to 25.5%. Still double‐digit growth for Hop Inn RevPAR of Hop Inn (excluding the Philippines branch) continued to grow at double‐digit rates, increasing by 19%YoY this quarter. The number of rooms had expanded from 1,483 rooms last year to 2,028 rooms as of 2Q17. The occupancy rate grew impressively by 8% to 74% while room rates increased 6%. We believe there is still a ways to go for Hop Inn as its normal occupancy rate should rise to at least 80%. Maintain Buy Upside is still narrowing as the market continues to respond to the solid improvement of the company. However, there is still some expansion that we have not included in our model, i.e., 1) a greater number of Hop Inns next year and 2) four new hotels in Bangkok that will start operating from 2018 onwards. We, hence, maintain our Buy recommendation with the 17E TP of Bt6.20, still with 17% upside. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Core profit (Btmn) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt)
2014 4,285 (112) (0.05) ‐110.9% 0.04 1.82
2015 5,255 198 0.08 276.7% 0.04 1.88
2016 5,624 346 0.15 84.3% 0.06 1.97
2017E 6,053 434 0.17 18.3% 0.07 2.08
2018E 6,278 470 0.19 8.4% 0.08 2.20
2019E 6,428 524 0.21 11.5% 0.08 2.34
FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 ‐104.21 20.94 2.58 0.9% ‐2.3% 164%
2015 58.97 13.59 2.50 0.9% 4.3% 154%
2016 32.00 12.14 2.39 1.3% 7.6% 150%
2017E 27.05 11.51 2.26 1.5% 8.6% 148%
2018E 24.96 10.98 2.14 1.6% 8.8% 125%
2019E 22.39 10.70 2.01 1.8% 9.2% 104%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: ERW’s 2Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt)
2Q16 1,277 465 289 (89) 14 (16) 5 17 17 0.01 36.4 22.6 1.3 0.3 1.2 1.5 1.9 0.3
Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt / equity (x) BVPS (Bt) ROE (%)
1Q17 1,620 762 542 (84) 15 (59) (7) 208 208 0.08 47.1 33.4 12.8 0.4 4.3 1.4 2.0 4.1
2Q17 1,345 546 343 (83) 15 (26) 1 57 57 0.02 40.6 25.5 4.3 0.4 1.9 1.5 2.0 1.1
% YoY 5.3 17.2 18.6 (6.0) 8.9 65.5 (73.6) 238.6 238.6 238.2
% QoQ (17.0) (28.4) (36.8) (0.3) (1.5) (55.7) (118.9) (72.3) (72.3) (72.3)
6M17 2,965 1,308 884 (167) 30 (86) (6) 265 265 0.11 44.1 29.8 8.9 0.4 3.1 1.5 2.0 5.3
% YoY 5.2 12.4 12.4 (8.2) 33.5 43.7 (144.6) 27.4 27.4 27.4
2017E 6,053 2,490 1,642 (338) 30 (116) 20 434 434 0.17 41.1 27.1 7.2 0.3 2.6 1.5 2.1 8.6
% YoY 7.6 7.4 6.2 (6.7) (23.7) (4.7) 37.1 18.3 25.5 18.3
Sources: ERW, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
YTD (% 17E) 49.0 52.5 53.8 49.5 100.3 73.9 (29.7) 61.1 61.1 61.1
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Gain (loss) from affiliates Extra Items Non‐controlling Net profit Reported EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories Investment 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 CASH FLOW (Btmn) Net income Non‐cash adjustment 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 4,285 (2,901) 1,383 (1,205) 850 (672) 178 (360) 70 (112) (19) 21 0 (1) (112) (0.05) (112) (0.05) 0.04
2015 5,255 (3,228) 2,027 (1,374) 1,371 (717) 653 (387) 46 312 (99) 19 0 (35) 198 0.08 198 0.08 0.04
2016 5,624 (3,305) 2,319 (1,503) 1,546 (730) 816 (362) 40 494 (122) 15 21 (41) 367 0.15 346 0.15 0.06
2014 676 212 55 163 13,165 245 14,517 1,721 6,722 9,783 2,505 4,734 14,517
2015 1,011 202 62 163 13,116 266 14,820 2,618 5,988 9,903 2,505 4,917 14,820
2016 795 202 53 156 13,307 397 14,911 2,558 5,869 9,839 2,538 5,073 14,911
2017E 6,053 (3,563) 2,490 (1,602) 1,642 (755) 888 (338) 30 580 (116) 20 0 (50) 434 0.17 434 0.17 0.07
2014 (110) (21) 672 47 588 (1,772) 2 (1,770) 1,408 13 (375) (15) 1,031 (151) (1,182) (0.48)
2015 230 (14) 717 12 946 (742) 12 (730) 158 61 (99) 0 120 335 216 0.09
2014 ‐8.9% ‐28.0% ‐110.9% 32.3% 19.8% 4.2% ‐2.6% ‐2.6% ‐16.9%
2015 22.6% 61.3% ‐276.7% 38.6% 26.1% 12.4% 3.8% 3.8% 31.7%
2017E 504 218 57 156 13,961 403 15,300 2,601 5,869 9,914 2,538 5,386 15,300
2016 408 (6) 730 (63) 1,069 (915) 4 (911) (176) 0 (100) (98) (373) (216) 158 0.06
2019E 971 231 61 156 13,015 413 14,847 1,401 5,869 8,771 2,538 6,076 14,847
2018E 523 (20) 785 15 1,302 (314) 20 (294) 0 0 (174) (25) (199) 810 1,009 0.40
2017E 7.6% 6.2% 18.3% 41.1% 27.1% 14.7% 7.2% 7.2% 20.0%
2019E 6,428 (3,767) 2,661 (1,678) 1,767 (785) 983 (315) 32 700 (140) 20 0 (55) 524 0.21 524 0.21 0.08
2018E 1,314 226 59 156 13,490 409 15,655 2,601 5,869 9,944 2,538 5,711 15,655
2017E 484 (20) 755 7 1,225 (1,409) 20 (1,389) 43 0 (150) (20) (128) (291) (164) (0.07)
2016 7.0% 12.8% 84.3% 41.2% 27.5% 14.5% 6.5% 6.2% 24.6%
2018E 6,278 (3,697) 2,580 (1,643) 1,721 (785) 937 (339) 31 629 (126) 20 0 (53) 470 0.19 470 0.19 0.08
2019E 580 (20) 785 16 1,360 (309) 20 (289) (1,200) 0 (188) (26) (1,415) (344) 1,071 0.43
2018E 3.7% 4.8% 8.4% 41.1% 27.4% 14.9% 7.5% 7.5% 20.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2019E 2.4% 2.7% 11.5% 41.4% 27.5% 15.3% 8.2% 8.2% 20.0%
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 Bt6.20) Close Bt5.30
Tourism & Leisure August 11, 2017
Beat forecast/Below forecast/In‐line
Above expectations Results date: August 10, 2017 Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.181
0.206
KT ZMICO vs. consensus Share data
‐6.1%
‐7.8%
Reuters / Bloomberg
ERW.BK/ERW TB
Paid‐up Shares (m)
2,500.17
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
13.00/398.00
Foreign limit / actual (%)
49.00/17.54
52 week High / Low (Bt)
5.80/3.92
Avg. daily T/O (shares 000)
7,201.00
NVDR (%)
2.19
Estimated free float (%)
44.65
Beta
1.01
URL
www.theerawan.com
CGR
Anti‐corruption
n.a.
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6236
The best low‐season performance ever ERW reported a net profit at Bt57mn, +239%YoY on RevPAR that grew across the board. The result was 78% above our forecast and the street due mainly to lower costs than forecast. We still see ERW as benefitting the most from rising tourism in Thailand. We maintain our Buy recommendation and keep it as our top pick. RevPAR grew in all segments RevPAR of Luxury, Midscale, and Economy (Ibis) hotels grew 4%YoY, 10%YoY and 4%YoY, respectively. The growth was driven mainly by higher room rates while the occupancy rate showed a mixed result (flat for Luxury, +5% for Midscale, and ‐1% for Ibis). Phuket saw the highest revenue growth at 17%YoY from the continued turnaround of Russian tourists. Food and Beverage revenue increased by 6%YoY, which helped improve the overall EBITDA margin from 22.6% in 2Q16 to 25.5%. Still double‐digit growth for Hop Inn RevPAR of Hop Inn (excluding the Philippines branch) continued to grow at double‐digit rates, increasing by 19%YoY this quarter. The number of rooms had expanded from 1,483 rooms last year to 2,028 rooms as of 2Q17. The occupancy rate grew impressively by 8% to 74% while room rates increased 6%. We believe there is still a ways to go for Hop Inn as its normal occupancy rate should rise to at least 80%. Maintain Buy Upside is still narrowing as the market continues to respond to the solid improvement of the company. However, there is still some expansion that we have not included in our model, i.e., 1) a greater number of Hop Inns next year and 2) four new hotels in Bangkok that will start operating from 2018 onwards. We, hence, maintain our Buy recommendation with the 17E TP of Bt6.20, still with 17% upside. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Core profit (Btmn) Core EPS (Bt) Core EPS growth (%) Dividend (Bt) BV (Bt)
2014 4,285 (112) (0.05) ‐110.9% 0.04 1.82
2015 5,255 198 0.08 276.7% 0.04 1.88
2016 5,624 346 0.15 84.3% 0.06 1.97
2017E 6,053 434 0.17 18.3% 0.07 2.08
2018E 6,278 470 0.19 8.4% 0.08 2.20
2019E 6,428 524 0.21 11.5% 0.08 2.34
FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 ‐104.21 20.94 2.58 0.9% ‐2.3% 164%
2015 58.97 13.59 2.50 0.9% 4.3% 154%
2016 32.00 12.14 2.39 1.3% 7.6% 150%
2017E 27.05 11.51 2.26 1.5% 8.6% 148%
2018E 24.96 10.98 2.14 1.6% 8.8% 125%
2019E 22.39 10.70 2.01 1.8% 9.2% 104%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: ERW’s 2Q17 earnings review Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt)
2Q16 1,277 465 289 (89) 14 (16) 5 17 17 0.01 36.4 22.6 1.3 0.3 1.2 1.5 1.9 0.3
Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt / equity (x) BVPS (Bt) ROE (%)
1Q17 1,620 762 542 (84) 15 (59) (7) 208 208 0.08 47.1 33.4 12.8 0.4 4.3 1.4 2.0 4.1
2Q17 1,345 546 343 (83) 15 (26) 1 57 57 0.02 40.6 25.5 4.3 0.4 1.9 1.5 2.0 1.1
% YoY 5.3 17.2 18.6 (6.0) 8.9 65.5 (73.6) 238.6 238.6 238.2
% QoQ (17.0) (28.4) (36.8) (0.3) (1.5) (55.7) (118.9) (72.3) (72.3) (72.3)
6M17 2,965 1,308 884 (167) 30 (86) (6) 265 265 0.11 44.1 29.8 8.9 0.4 3.1 1.5 2.0 5.3
% YoY 5.2 12.4 12.4 (8.2) 33.5 43.7 (144.6) 27.4 27.4 27.4
2017E 6,053 2,490 1,642 (338) 30 (116) 20 434 434 0.17 41.1 27.1 7.2 0.3 2.6 1.5 2.1 8.6
% YoY 7.6 7.4 6.2 (6.7) (23.7) (4.7) 37.1 18.3 25.5 18.3
Sources: ERW, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
YTD (% 17E) 49.0 52.5 53.8 49.5 100.3 73.9 (29.7) 61.1 61.1 61.1
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Gain (loss) from affiliates Extra Items Non‐controlling Net profit Reported EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories Investment 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 CASH FLOW (Btmn) Net income Non‐cash adjustment 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 4,285 (2,901) 1,383 (1,205) 850 (672) 178 (360) 70 (112) (19) 21 0 (1) (112) (0.05) (112) (0.05) 0.04
2015 5,255 (3,228) 2,027 (1,374) 1,371 (717) 653 (387) 46 312 (99) 19 0 (35) 198 0.08 198 0.08 0.04
2016 5,624 (3,305) 2,319 (1,503) 1,546 (730) 816 (362) 40 494 (122) 15 21 (41) 367 0.15 346 0.15 0.06
2014 676 212 55 163 13,165 245 14,517 1,721 6,722 9,783 2,505 4,734 14,517
2015 1,011 202 62 163 13,116 266 14,820 2,618 5,988 9,903 2,505 4,917 14,820
2016 795 202 53 156 13,307 397 14,911 2,558 5,869 9,839 2,538 5,073 14,911
2017E 6,053 (3,563) 2,490 (1,602) 1,642 (755) 888 (338) 30 580 (116) 20 0 (50) 434 0.17 434 0.17 0.07
2014 (110) (21) 672 47 588 (1,772) 2 (1,770) 1,408 13 (375) (15) 1,031 (151) (1,182) (0.48)
2015 230 (14) 717 12 946 (742) 12 (730) 158 61 (99) 0 120 335 216 0.09
2014 ‐8.9% ‐28.0% ‐110.9% 32.3% 19.8% 4.2% ‐2.6% ‐2.6% ‐16.9%
2015 22.6% 61.3% ‐276.7% 38.6% 26.1% 12.4% 3.8% 3.8% 31.7%
2017E 504 218 57 156 13,961 403 15,300 2,601 5,869 9,914 2,538 5,386 15,300
2016 408 (6) 730 (63) 1,069 (915) 4 (911) (176) 0 (100) (98) (373) (216) 158 0.06
2019E 971 231 61 156 13,015 413 14,847 1,401 5,869 8,771 2,538 6,076 14,847
2018E 523 (20) 785 15 1,302 (314) 20 (294) 0 0 (174) (25) (199) 810 1,009 0.40
2017E 7.6% 6.2% 18.3% 41.1% 27.1% 14.7% 7.2% 7.2% 20.0%
2019E 6,428 (3,767) 2,661 (1,678) 1,767 (785) 983 (315) 32 700 (140) 20 0 (55) 524 0.21 524 0.21 0.08
2018E 1,314 226 59 156 13,490 409 15,655 2,601 5,869 9,944 2,538 5,711 15,655
2017E 484 (20) 755 7 1,225 (1,409) 20 (1,389) 43 0 (150) (20) (128) (291) (164) (0.07)
2016 7.0% 12.8% 84.3% 41.2% 27.5% 14.5% 6.5% 6.2% 24.6%
2018E 6,278 (3,697) 2,580 (1,643) 1,721 (785) 937 (339) 31 629 (126) 20 0 (53) 470 0.19 470 0.19 0.08
2019E 580 (20) 785 16 1,360 (309) 20 (289) (1,200) 0 (188) (26) (1,415) (344) 1,071 0.43
2018E 3.7% 4.8% 8.4% 41.1% 27.4% 14.9% 7.5% 7.5% 20.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2019E 2.4% 2.7% 11.5% 41.4% 27.5% 15.3% 8.2% 8.2% 20.0%
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
