You are on page 1of 17

Private Wealth Management Research

18 November 2014

A member of the Kiatnakin Phatra Financial Group

Phatra Wealth Daily Note


Global Markets: Draghi QE, Japan recession
n

U.S. stocks were little changed, with the S&P500 Index at an


all-time high.

Draghi explicitly cited govt-bond buying as a policy tool


officials could use to stimulate the economy should the
outlook worsen.

Japan considers a stimulus package as the economy


unexpectedly sank into a recession. Nikkei fell 3% yesterday,
but is rebounding today.

Local Markets: Commerce minister promises an


investment-friendly FBA, Prasarn on new inflation
target, WHA to buy HEMRAJ for Bt43.7bn

Key Global Index


US Dow Jones
US S&P 500
US Nasdaq
UK FTSE 100

Last
17,647.8
2,041.3
4,671.0
6,672.0

%Chg
0.1%
0.1%
-0.4%
0.3%

%YTD
6.5%
10.4%
11.8%
-1.1%

EU STOXX600
JP Nikkei
HK Hang Seng

115.1
16,973.8
23,797.1

0.5%
-3.0%
-1.2%

2.6%
4.2%
2.1%

419.6
1,715.0
115.1
985.9
477.1

-0.2%
-0.1%
0.5%
-0.5%
-0.7%

2.7%
3.2%
2.6%
-1.7%
1.9%

MSCI
MSCI
MSCI
MSCI
MSCI

ACWI
WORLD
Europe
EM
AsiaPac ex Japan

Commerce Minister Gen Chatchai reassured foreign investors


that the FBA amendment would create an investment-friendly
atmosphere.

SET Index

BoT Gov Prasarn said oil prices alone will not drive monetary
policy after switching inflation targets to headline from core.

WHA reached an agreement to buy 22.53% of Hemaraj at 4.50


baht per share from major shareholders.

Local Market Wrap: SET 1,569.07 -6.81pts -0.43% Value


US$1,233mn. A dull start to the week, with volume still
dominated by retail stocks.

Phatra Research Highlights


n

Thailand's 3Q GDP grew 0.6%YoY, below expectations. We cut


our GDP forecast to 0.8% for 2014 and 3.7% for 2015.

Investment Ideas
n

TUF (Buy/12m PO Bt97): Operation is back on track after a


difficult 2013 and its gross profit margin is rebounding even
faster than previously expected, and thus we are raising our
net profit forecasts by 3% in 2014, 16% in 2015, and 13% in
2016. Our estimates are now above consensus (14%/20% in
2015/16). Our 12m PO is raised to Bt97 from Bt80. We also
see further upside risks from weakening THB given its high
foreign currency exposure and continued profit margin
expansion.
CPN (Buy/12m PO Bt60) posted net income of Bt1.9bn, up
33% YoY and 5% QoQ. The results were in line with our
expectation. With expected higher rental income from longterm lease contract conversion into short-term leases in 3Q14,
we should continue to see better cost management next year.
BEC (Underperform/12m PO Bt42): We have trimmed our
earnings estimates by 3% in 2014 and 6% in 2015 and
lowered our 12m PO to Bt42 from Bt45. While the 3Q14
result is only slightly below our estimate, we think market
expectation is too high and our 2014 and 2015 revised
estimates are 8% and 19% below consensus respectively. We
believe that competition from digital TV and loss contribution
from its digital TV operation will cause earnings to slide
further in 2015/2016.

Last

%Chg

%YTD

SET Index

1,569.1

-0.4%

20.8%

SET100 Index

2,313.0

-0.5%

19.7%

SET50 Index

1,046.3

-0.5%

18.4%

Cumulative Net Buy

Last

1M

YTD

Foreigners

(304)

(3,095)

(15,242)

Local institutions

(760)

14,114

51,706

Retail investors

896 (19,552)

(51,776)

Proprietary

168

Exchange Rate

8,532

15,313
%YTD

Last

%Chg

EURUSD

1.2450

-0.6%

-9.4%

USDJPY

116.65

0.3%

10.8%

USDCNY

6.1270

0.0%

1.2%

USDTHB

32.80

0.0%

0.3%

Commodities

Last

%Chg

%YTD

WTI (USD/bl)

75.6

-0.2%

-23.1%

79.3

-0.1%

-25.1%

1,186.6

-0.2%

-1.3%

Brent (USD/bl)
Gold (USD/tr oz)

Phatra Macro Research Team &


Phatra PWM Research Analysts
Pipat Luengnaruemitchai
pipat@phatrasecurities.com
Porntip Tantasuwan
porntip@phatrasecurities.com
Flemming Clausen
flemming@phatrasecurities.com
Taweesak Paopanlop
taweesak@phatrasecurities.com

Issued by Phatra Securities Public Company Limited ("Phatra"). Phatra does and seeks to do business with companies covered or mentioned in its
research reports. As a result, investors should be aware that Phatra may have a conflict of interest that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 16.

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Global Market Highlights


US stocks had little changed, European shares
up on Draghi (Bloomberg, Reuters)
U.S. stocks were little changed, rising only 0.1% with S&P 500
Index at an all-time high. A slump in small-cap shares and
concern over Japans recession offset corporate deals.
European shares closed higher after Draghi reiterated that he
was willing to do more to stimulate the euro zone economy if
necessaryincluding purchase sovereign bonds. Stoxx Europe
600 rose 0.5%
Asian stocks rose as investors await a decision by Japanese
Prime Minister Shinzo Abe to put off a sales-tax increase, add
stimulus and call an election, after data yesterday showed the
economy entered recession.

bonds, the ECB president said in Brussels yesterday in


answer to a question during his quarterly testimony to
lawmakers at the European Parliament.
His latest comments come less than three weeks before the
institutions critical December meeting, when it will publish
new forecasts that are likely to show a weaker outlook for
growth and inflation.
Data released yesterday showed that officials accelerated
covered-bond buying last week, with the total settled rising
by more than 3bn euros -- up from 2.6bn euros the week
before -- to 10.5bn euros.
ECB Executive Board member Yves Mersch said yesterday
that purchases of ABS will start this week. He also said that
the central bank could theoretically buy sovereign debt,
gold, exchange-traded funds, and even real estate to counter a
longer period of low inflation, while warning against rushing
in.

US economic data: mixed (Reuters)


US factory production rose 0.2% in Oct and September's
output was revised down to 0.2% (from 0.5%). Total industrial
production unexpectedly dropped 0.1% (vs cons +0.2%),
reflecting the vehicle pullback and less demand at utilities,
mining companies.
Empire State general business conditions index rose to 10.16
in Nov from a reading of 6.17 in Oct. New orders rebounded
strongly, but factory employment gauges dropped, taking
some shine off the report. Businesses, however, remain
upbeat about the future. An index for future business hit its
highest level since January 2012 and a measure of capital
expenditure posted its highest reading in more than two
years.

Draghi Says ECB Measures Could Include


Buying Government Bonds (Bloomberg)
Draghi has explicitly cited govt-bond buying as a policy tool
officials could use to stimulate the economy should the
outlook worsen. Unconventional measures might entail the
purchase of a variety of assets, one of which is sovereign

Japan Seeks to Strengthen 2015 Growth After


Recession Hit (Bloomberg)
With Japans slump into its fourth recession since 2008
threatening the failure of the Abenomics reflation program,
Prime Minister Shinzo Abes administration is taking steps to
shore up growth for the coming year.
Economy Minister Akira Amari told reporters yesterday in
Tokyo theres a high chance of a stimulus package. Etsuro
Honda, an adviser to Abe, said a 3 trillion yen ($26 billion)
program was appropriate and should go toward measures that
directly help households, such as child care support.
Abe, who holds a news conference later today, is also
considering a postponement of an October sales-tax increase
until 2017 -- a move that would add 0.3 percentage point to
growth in the coming fiscal year, according to the median
estimate of economists. At stake for the prime minister is
assuring re-election in a likely snap vote next month that may
serve as a referendum on his policies. BoJ starts a two-day
meeting today.

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Local Market Wrap


SET 1,569.07 -6.81pts -0.43% Value US$1,233mn

Top Gainers

Net Buy/Sell Frgn-US$9mn Inst-US$23mn Prop+US$5mn


Ret+US$27mn
A dull start to the week, with volume still dominated by
retail stocks.
ENERG-0.64%, TELECO-0.60%, and BANK-0.57% all edged
lower as buying appetite slows down driven by
disappointing growth.
3Q14 GDP released yesterday gave little optimism with 3Q
GDP grew +0.6% YoY versus consensus at +1.0%YoY.
Despite better private consumption, government
consumption and public investment was poor.

BMCL
RS
NYT
EGCO
TICON

Earnings are done and out of the way, with majority of


stocks under our coverage reporting in line or below
estimate.
No surprises to the market, as investors were expecting
poor sentiment for 3Q14 earnings.
The disappointing results mainly came from TRANS-0.47%,
ENERG-0.64%, and COMM-0.36%.

%Chg

%YTD

1.80

+3.4%

+78.2%
+27.5%

9.05

+2.8%

14.90

+2.1%

-12.4%

174.00

+2.1%

+42.0%

19.80

+1.5%

+27.7%

Top Losers

Last

MEGA

17.00

-4.5%

BJCHI

35.00

-4.1%

+0.7%

MAJOR

24.80

-3.7%

+41.7%

KCE

38.50

-3.1%

+63.8%

4.00

-2.9%

-3.4%

SVI

As a result of slower domestic demand and delays in public


spending we have cut our GDP growth to 0.8% for 2014 and
3.7% for 2015 (consensus is at 4.3%).

Last

Most Active
PTT
ITD

Last

%Chg

%Chg

%YTD
-15.0%

%YTD

384.00

-1.0%

+34.3%

6.40

+0.8%

+64.9%

11.30

-0.9%

+70.4%

PTTEP

142.00

-1.0%

-14.7%

ADVANC

235.00

-0.8%

+17.8%

TRUE

Sectoral performance
SET Index

%Chg

%YTD

1,569.1

-0.4%

20.8%

21,641.7

-0.6%

13.0%

SET Banks

612.4

-0.6%

34.1%

SET ICT

224.4

-0.6%

17.6%

SET Commerce

29,433.5

-0.4%

11.7%

SET Food & Bev

12,202.2

-1.2%

11.7%

320.6

0.1%

37.1%

SET Constr Mat

12,044.4

0.9%

19.4%

1577.63

SET Petrochem

868.9

-0.8%

-11.6%

Day High

SET Health Care

Chart: SET Intraday movement

SET Energy & Utilities

Last

SET Property

1,580

1,575
1575.88
Previous Close

4,223.0

-0.2%

53.9%

SET Transportation

212.0

-0.5%

30.9%

SET Property Fund

159.0

0.0%

1.2%

1569.07
1,570

Close
1568.7
Day Low

16:31

16:01

15:31

15:01

14:31

14:01

12:02

11:32

11:02

10:32

10:02

1,565

Source: Bloomberg

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Todays news
Economy: FBA: 'no retroactive impact' (Nation)
Commerce Minister Gen Chatchai reassured concerned foreign
investors overseas that the plan to amend the Foreign
Business Act (FBA) will focus on "relaxation, reducing
procedures facilitating investment, and not deal retroactively
with existing firms", which would create an investmentfriendly atmosphere with a positive impact on investors. He
said the ministry had not yet come out with a draft
amendment, but was so far only studying how to amend the
law.
The Business Promotion Dept is conducting a study and a
public hearing and is expected to be finalized in Dec before
approval is sought from the minister and Cabinet for
amendments to the draft law. Under the plan to amend the
draft law, the definition of "foreigners" will be amended to
one based on international principles. It would also adjust
some qualifications for foreign investors to facilitate more
investment, review business lists under Annex III to be more
flexible, consider exemption for initial capital investment
limits in accordance with international agreements, increase
efficiency for foreign investors to get approval, and adjust
some penalties for nominees.

Economy: BoT: Oil price 'not the only factor for


policy rate' (Nation)
BoT Gov Prasarn said oil prices alone will not drive monetary
policy after switching inflation targets to headline from core.
This counters Moody's suggestion that the inflation-target

switch should open up room for a cut in the policy interest


rate, since energy prices must be included in its decisionmaking in the future. Prasarn said: "The core inflation target is
concentrated on demand, and it has been successful for the
past 10-12 years. Headline inflation would also consider the
supply side ... which would be easier to communicate the
inflation target to the people, but headline target would
swing more than the core target.
He said that the comment that the target switch would
immediately mean that the MPC would have more room to
lower the benchmark interest rate since the global oil price is
low is a false idea. The MPC has to take into consideration
many factors, including the prices of other products if the
global oil price falls it does not mean that the interest rate
will automatically fall also."

Property: WHA to buy Hemaraj for Bt43.7bn


(Bangkok Post)
WHA Corp, Thailands biggest publicly traded developer of
factories and warehouses, plans to acquire Hemaraj Land &
Development Plc for 43.7 billion baht (US$1.3 billion). WHA
reached an agreement to buy 22.53% of Hemaraj at 4.50 baht
per share from major shareholders, according to a regulatory
filing to the stock exchange. The company will offer to
purchase Hemarajs remaining shares at the same price, it
said. That would be 1.4% higher than the stocks closing price
of 4.44 baht on Nov 14. The acquisition of Thailands biggest
developer of industrial land by market value will allow WHA
to expand into land development in the Southeast Asian
nation, where Toyota Motor Corp, Ford Motor Co and General
Motors Co are boosting investments in manufacturing centers.

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Stock Comments
BEC The storm is on the horizon
(Underperform/12-month PO Bt42.00)
Downgrade to Underperform from Neutral
Following BEC's 3Q14 result we have trimmed our earnings
estimates by 3% in 2014 and 6% in 2015 and lowered our PO
to Bt42 from Bt45. While the 3Q14 result is only slightly
below our estimate, we think market expectation is too high
and our 2014 and 2015 revised estimates are 8% and 19%
below consensus respectively. While the consensus
anticipates earnings growth in 2015, we believe that
competition from digital TV and loss contribution from BEC's
digital TV operation will cause earnings to slide further in
2015/2016. We believe earnings downgrades will continue
and will pressure the share price.

could fluctuate, TUF's scale and increasing contribution from


branded products allows the company to better manage raw
material price volatility. Our PO, based on our new forecasts,
has also been increased by Bt97/share from Bt80/share and
we reiterate our Buy rating on the stock.

Consolidating global seafood


TUF recently acquired two small seafood firms in Europe
which will add at least US$300mn in annual revenue to the
company, and we expect there could be more in the near
future. After a difficult year, many small and medium-sized
seafood companies are finding it more difficult to survive as
stand-alone entities, leaving the industry ripe for further
consolidation. TUF's management expects to be able to
conclude at least one or more acquisitions in the next few
months. We have not factored this into our current forecasts.

Market underestimates digital TV competition

Several upside risks

Our main concern is competition from digital TV which will


likely limit BEC's top-line growth despite an expected rebound
in advertising expenditure in 2015 (in line with GDP growth
forecast). The entry of ITV (the free to air TV) several years
ago demonstrated the potential impact of new entrants on
BEC. While BEC's top-line growth during 2004/2005 declined
by only single digits, earnings dropped 19% in 2004 and 19%
in 2005 as BEC has low operating leverage. This time around,
we think BEC is facing competition from not only one, but 24
digital TV channels.

We also see further upside risks from weakening THB and


continued margin expansion. Given TUF's high exposure to
foreign currency, weaker THB will have a positive impact on
its earnings. Every Bt1/USD change translates into ~6-8%
change in its bottom line and PO. While we assume that
margin will only remain stable in 2015-2016, TUF's GPM
could further expand as a result of higher share of branded
business. Every 1ppt increase in GPM can translate into a
~15-17% increase in TUF's bottom line and our price objective
for the company.

BEC is losing audience share to digital TV

TRUE - 3Q14 result better than expected

According to Nielsen, audience shares of 24 digital TV stations


doubled to 15.5% in September from 7.3% in April while BEC's
audience share dropped to 30.1% from 37.6%. We believe that
BEC's 1Q14-3Q14 advertising revenue still outgrew the
industry despite the audience share loss because digital TV
advertising rate is still at a deep discount to that of analogue
TV (and hence digital TV market share in dollar terms is much
lower than their audience share). But if digital TV could keep
growing their audience share in 2015 the discount would
naturally narrow, making the impact on BEC's top line more
severe, in our view.

(Underperform/12-month PO Bt9.00)
Loss narrows faster than expected
After stripping out exceptional items (including network
amortization acceleration) 3Q14 pre-exceptional loss declined
YoY. Although the loss expanded QoQ, nine-month loss makes
up only 33% of our full-year loss forecast. The main reason
for the positive surprise is the lower-than-expected SG&A and
on-going tax refund (since 4Q13). TRUE has completed the
recapitalization in 3Q14 and net gearing dropped to 41% from
1,458% in 2Q14. With expected interest-saving, TRUE could
move close to or reach breakeven point in 4Q14 at the preexceptional level.

TUF Back on track; Maintain Buy (Buy/12-month


PO Bt97.00)
Increasing forecasts after strong 9M performance
TUF's operation is back on track after a difficult 2013. Its
margin is rebounding even faster than previously expected
with 9M14 GPM already surpassing 16% versus our previous
forecast of only 15%. As such, we are raising our forecasts for
the company. Our net profit forecasts have been increased by
3% in 2014, 16% in 2015, and 13% in 2016. Our estimates are
now above consensus (14%/20% in 2015/16). While margin

Cellular phone revenue outgrows peers but cost also rises


True Move service revenue increased 7.2% YoY (while
ADVANC/DTAC reported revenue declines). Although preexceptional loss dropped YoY, it expanded QoQ due to
reversal of regulatory fee recorded in 2Q14 and higher
network OPEX/SG&A. Despite an aggressive handset
promotion, handset margin remains positive at 2%
(ADVANC/DTAC reported negative handset margin).

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Online profit soars on lower cost


Online pre-exceptional profit surged both YoY and QoQ
helped primarily to lower SG&A while service revenue was
soft, dropping YoY and flat QoQ (due to soft fixed-line
telephone revenue and the spinoff of eight non-core
companies). The division recorded Bt1bn of gross profit from
sales (which is larger than usual) and we have yet to find out
whether this item is on-going.

Pay TV loss declined


True Vision pre-exceptional loss declined both YoY and QoQ
due to lower SG&A and higher advertising revenue (which
doubled QoQ despite weak overall advertising expenditure) as
redesigned advertising package attracts advertiser budgets.

CK - 3Q14 result review (Neutral/12-month PO


Bt28.60)
Core profit increased QoQ and YoY
CK reported net profit of Bt1.2bn, up 285% QoQ and 28% YoY.
Excluding extra gain from BMCL divestment, pre-ex net profit
came in at Bt346mn, up 11%QoQ and 42%YoY. 9M14 pre ex
net profit was Bt1bn, representing 80% of our full-year
forecast and 72% of full-year consensus estimate. Despite
lower construction revenue and lower gross margin, pre-ex
net profit increased due to higher dividend income and lower
equity loss from associates.

Lower revenue and gross margin


3Q14 construction revenue was reported at Bt7.9bn, down
11%QoQ and 8%YoY. This is due to slower construction
progress as some projects, e.g. Purple line C1 is close to
completion. 9M14 revenue came in at Bt25.4bn and accounts
for 74% of our full-year forecast and 73% of full-year
consensus estimate. 3Q14 gross margin was 9.1%, which is
lower than 9.7% in 2Q14 due to change in project mix.

Higher dividend income and lower equity loss from


associates
In 3Q14, CK received dividend income of Bt330mn from both
BECL and TTW. This is significantly higher than dividend
income of Bt115mn in 2Q14 from BECL. This is due to
difference in timing of dividend payment. 3Q14 equity loss
was Bt13mn, improving from loss of Bt116mn in 3Q13 as CK
has capitalized key expenses of Xayaburi Power (XPCL).

PTTGC - To merge or not to merge (Buy/12-month


PO Bt79.63)
New CEO = new thinking?
The Bangkok Post cited PTTGC's newly appointed CEO as
saying that the planned feasibility of the potential merger
between PTTGC and IRPC will be delayed and may not be
finalized as planned. He said "we really need a while to settle
ourselves (each firm is busy with many planned expansions)
before proceeding seriously with a feasibility study as to
whether the merger is viable."

Background
Previously, IRPC's president stated that the merger feasibility
study (including the potential synergy from the merger) would
be conducted in 2H15 after IRPC's UHV project (which is
deemed to be one of the key parts of synergy creation and
IRPC's value) is completed. The study was to be completed in
2016 at the earliest. IRPC also mentioned that the potential
merger would have to be justified by the synergy to be
created from the merger (which would be scrapped if it is not
commercially feasible).

Potential merger in limbo?


We have previously stated that this transaction is unlikely to
be consummated in the near term and is still not certain. We
attribute this to IRPC's uncompetitive cost structure, weak
financial position and high valuation, which in our view could
dilute PTTGC's cost advantage among petrochemical
companies in Asia and its solid financial stance. PTTGC has
committed to its own investment path in Indonesia and is now
under a study to invest in a US ethane-based cracker (via a
joint-venture) in the long term. In this regard, PTTGC will have
a few large projects to execute well (against its poor historical
track record) and it might need to maintain financial resources
for its own investments. We think the potential merger could
now be in limbo.

PTTGC - Challenging time ahead (Buy/12-month PO


Bt79.63)
Petrochemical and refinery outlook
PTTGC expects the ethylene and polyethylene market to
remain tight in 2015E with the global operating rates of 88%
and 85% to slightly increase or stay at high levels. But the
lower oil price should put pressure on HDPE price (which is
expected to fall from US$1,557/ton in 2014 to US$1,421/ton
in 2015). HDPE Naphtha spread is also conservatively
forecast to fall from US$671/ton to US$625/ton. In contrast,
refinery glut will likely worsen with new supply (1.9mn bbl/d)
exceeding demand (1.13mn bbl/d). Diesel/Gasoline crack
spreads will weaken. Aromatics will likely continue to see
another difficult period in 2015 with an excess supply of
1.5mn tons (3.1mn tons in 2014). PX spread should stay at
6

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

US$361/ton (an equilibrium spread level). Benzene is the only


bright spot with spread expected to stay flat at US$365/ton.

CentralPlaza Salaya, in August, which generated lower-thanaverage rental rate of less than Bt1,400 per sqm per month.
However, CPN confirmed that the same-store rental rate in
3Q14 still grew by 4% YoY.

Higher ethane feed comes to the rescue?


Despite a cautious outlook, PTTGC expects higher olefins
volume from higher run rate from 91% to 94-95% to be an
offsetting factor. Since three new projects will be completed
from 3Q15 onward, we expect only some impact. PTTGC
stated that the key NPAT driver for olefins is higher ethane
feed. Its ethane has increased from 221 tons/hour in 3Q13 to
272 tons/hour in October. This would rise by another 30
tons/hour when PTTs ethane recovery project complete in
1H15 while its off-gas upgrading project will add six
tons/hour from mid-2015. PTTGC believes a higher portion of
cheaper ethane feed should support olefins EBITDA margin at
between 28-30%.

Continued cost control


CPN continued to show good cost control with operating costs
to sales ratio declining to 13.9% of total revenue in 3Q14
compared with 15% in 2Q14 and 3Q13. With expected higher
rental income from long-term lease contract conversion into
short-term leases in 3Q14, we should continue to see better
cost management next year.

TTCL - 3Q14 result review (Underperform/12-month


PO Bt25.40)
Net profit increased QoQ

US cracker if you cant beat them, join them


In addition to Formosa, Lotte Chem, and IVL, PTTGC is
studying a US cracker joint venture investment. The final
decision will be made in 2H15. In the long term, PTTGC is also
studying the possibility of importing around 0.5-1.0mn tons
of ethane from the US to both replace declining domestic
ethane and expand the business. PTTGC believes the shale
revolution will put pressure on long-term ethane prices.

CPN - Results in line (Buy/12-month PO Bt60.00)


3Q results grew YoY and QoQ
CPN posted a good set of results with net income of Bt1.9bn,
up 33% YoY and 5% QoQ. The results were in line with our
expectation. 9M14 net income was Bt5.5bn, up 21% YoY and
this accounted for 73% of our 2014E.

Higher rental income from new malls, higher rates and


amortized gains
The YoY and QoQ growth was driven by higher rental income,
which grew 19% YoY and 5% QoQ. The growth should be
driven by new malls opening and higher same-store rental
rate. CPN booked the amortized gain from the sales of
CentralPlaza Chiengmai Airport project into CPNRF as a part
of rental income, not as other income as we previously
expected. Note that the amortized gain was Bt149mn in
3Q14, of which Bt62mn was the amortized gain carried from
2Q14. Stripping out the amortized gain, rental income still
grew by 15% YoY and 2% QoQ.

Same-store rental rate up 4% YoY


CPN revealed an average rental rate of Bt1,526 per square
meter (sqm) per month in 3Q14, up 1% YoY but down 1% QoQ.
The QoQ decline should be due to the addition of a new mall,

TTCL reported net profit of Bt119mn, up 34% QoQ but down


25%YoY. Excluding forex loss, pre-ex net profit came in at
Bt183mn, up 106%QoQ and up 7% YoY. 9M14 net profit came
in at Bt419mn, representing 78% of our full-year forecast and
54% of full-year consensus estimate. The key reason for
better net profit QoQ was higher gross margin.

Improving gross margin


3Q14 gross margin came in at 9.4%, significantly improved
from 4.2% in 2Q14. This is due to (1) lower contribution from
Qatars low-margin desalination project, (2) slight upward
margin revision of the Qatar project, and (3) contribution from
high-margin small EPCM work. 3Q14 revenue was reported at
Bt4.1bn, down 31% QoQ and down 8%YoY. This is due to
project cycle as key projects are close to completion and
contribution from newly awarded petrochemical projects is
still low. 9M14 revenue was Bt15bn and accounts for 88% of
our full-year forecast and 79% of full-year consensus
estimate.

Potential new projects in Qatar and Vietnam


In the year to date, TTCL has already secured a new
petrochemical project in Malaysia worth Bt15bn. Potential
new contracts that could reach conclusion by late 2014 or
early 2015 include Qatars desalination project Phase II and
petrochemical projects in Vietnam worth US$200mn each.

Update on coal-fired power plant in Myanmar


Management expects to reach a conclusion on this US$2.5bn
coal-fired power project in Myanmar in 2015. Key reasons for
the projects delay are (1) a change in project location from
Thilawa to Mon State for better coal transportation, and (2)
unclear process of project proposal and approval in Myanmar.

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

SIRI - Results beat expectation (Neutral/12-month

BJC - 3Q14 results weaker than expected

PO Bt2.18)

(Underperform/12-month PO Bt36.00)

Strong 3Q results

3Q14 result weaker than expected

SIRI reported pre-ex net income of Bt791mn in 3Q14, up 80%


YoY and 47% QoQ. The results were 10% above our
expectation due to lower-than-expected operating expenses
and higher-than-expected other income. 9M14 pre-ex net
income was Bt1.3bn, up 55% YoY and this made up 58% of our
2014 estimates.

3Q14 pre-exceptional profit dropped 50% YoY and ninemonth earnings make up 66% of our full-year forecast and
51% of Bloomberg consensus. Gross margin did not improve
as expected as raw material prices remain high and sales of
healthcare product are softer than expected, although public
hospitals have resumed procurement programs after the May
coup. Our Underperform rating is maintained.

Higher revenue and better operating margin was key


Housing revenue was Bt7bn, up 3% YoY and 19% QoQ and this
was in line with expectation. Condo revenue should account
for 40% of total revenue in 3Q, compared with 41% in 2Q and
59% in 3Q14. Gross picked up by 30bp QoQ to 33.7% while
operating expenses to sales ratio continued to decline to
18.4% in 3Q14 compared with 20.5% in 2Q due to no launches
in 3Q14. SIRIs net gearing declined to 1.9x at end-3Q14
compared with 2.2x at end-2Q14.

Packaging net profit drops 30% YoY


Packaging sales increased 5% YoY, improved from flat sales
YoY in 1H14 thanks to higher aluminum can sales and glass
packaging sales in Malaysia and Vietnam. This is while sales of
glass packaging in Thailand remain weak (following
spirits/beer excise tax hike in September 2013). Net profit
margin remains low at 5.8% in 3Q14 versus 6.6% in 1H14 and
9.0% in 2013 because of Bt128mn employee compensation
from Rajburana plant shutdown and higher energy cost.

Operations update
SIRI achieved presales of Bt2.5bn in 3Q14, bringing total
presales to Bt6.7bn in 9M14 (down 82% YoY). 9M14 presales
accounted for 56% of its Bt12bn revised presales target. The
weak presales should be mainly attributed to the delay of
condo launches to next year while landed property presales
remained weak with more than a 20% YoY decline in 9M14.
Note that SIRI recently cut its presales target to Bt12bn from
Bt30bn. The company also lowered its housing revenue target
to Bt27bn versus our estimate of Bt28.2bn revenue target to
Bt29bn to reflect weaker presales and a weaker launch plan.

Look for stronger 4Q14 earnings


We expect 4Q14 to pick up QoQ, mainly due to more condo
transfers. With a higher revenue base, we should see
continued improvement in operating margin in 4Q14. Despite
the risk on housing revenue, the risk on 2014E should be
mitigated by lower-than-expected operating costs to sales
ratio from no launches, and its cost control plan.

Consumer product profit plunged 83% YoY


YoY sales growth decelerated to 5.0% YoY from 12% YoY
growth in 1H14 and net profit margin remains low at 0.4%
(versus 3.5% in 2013 and 1.7% in 1H14) due to continuously
high raw material prices (palm and coconut oil in particular)
and intense price competition (which prevents BJC from
passing on higher cost to customers).

Healthcare and technical profit dropped 19% YoY


Although public hospitals have resumed procurement
programs after the May coup, sales growth remains mild
increasing 4% YoY (similar to 1H14 YoY growth). Cost of
training courses and events arranged for clients also
pressured 3Q14 profit according to BJC.

THBEV - Core operation in line in 3Q14 (Buy/12month PO S$0.76)


Core operation in line despite soft bottom line

Operations bottomed out; recovery in provincial market is


key
We reiterate our Neutral recommendation on SIRI with price
target of Bt2.18. With its successful cash call, we believe that
the operations and cash flow have bottomed out. Our key
concern is on its increasing exposure in condo revenue
upcountry in 2015 while the economy in the provincial
market has not yet fully recovered. This implies some risks on
revenue and cash flow on any delay of transfer. We also need
to monitor its spending on operating expenses when the
launch activities return back to normal.

3Q14 net profit dropped 9% YoY. But if we strip out asset


impairment/other exceptional items at Fraser&Neave and
Fraser Centerpoint (FNN and FCL; THBEV holds 29% stakes in
both firms), 3Q14 pre-exceptional profit increased 14% YoY.
Nine-month pre-exceptional profit made up 69% of our fullyear forecast (thus core operation is in line given 4Q is
usually the peak season).

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Beer turnaround and lower funding cost main drivers

Spirits profit declined due to high base effect

The main growth driver is beer turnaround and lower funding


cost. Beer division has turned profitable since 4Q13 and beer
3Q14 net profit was Bt28mn versus Bt246mn of loss in 2Q14.
Beer sales volume increased 6% YoY, the first positive growth
since 4Q12 (as impact of price hike in 3Q13 following excise
tax hike is waning). Interest expense halved YoY as THBEV
has gradually paid down debt and net gearing dropped to 58%
from 73% in 3Q13.

Spirits sales volume dropped 11% YoY and spirits net profit
declined 2% YoY (versus 19% YoY profit growth in 2Q14) due
to inventory buildup among distributors ahead of the
September 2013 excise tax hike (i.e. the high base effect).
Non-alcoholic division remains in loss and food division
plunged into loss due to a sharp drop in gross margin. If we
add back the exceptional items, FNN/FCL contribution is flat
YoY.

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Phatra Research Highlights


Thailand Economic Watch: 3Q GDP growth
disappointed (Phatra Securities)
Announced: 3Q14 GDP growth
Actual:+0.6% YoY

Previous: +0.4%YoY

Consensus (Bloomberg):+1.0% YoY

BofAML: +1.0% YoY

3Q growth lower than expected; 2014/2015 GDP forecast


cut
Thailand's 3Q GDP grew 0.6%YoY vs growth of 0.4% in 2Q.
Seasonally adjusted, GDP expanded 1.1%QoQ, after a rebound
of 0.9% in 2Q. The pace of recovery disappointed because of
delays in public spending and flat exports. Net exports
subtracted 2.4ppt from GDP while government added only
0.1ppt to GDP. Accordingly, we have revised down our GDP
growth forecasts to 0.8% (from 1.8%) in 2014 and to 3.7%
(from 4%) in 2015.

Private sector was better than expected; govt disappoints


Domestic demand was boosted by private spending. Private
consumption grew 2.2%YoY from increases in consumption of
non-durable goods and services. Durable goods consumption
fell 25.9%, the same pace as 2Q. Private investment rose
3.9%YoY driven by a rise in machinery and equipment
investment while construction still contracted. Government
consumption grew only 0.4% and public investment fell 0.8%.

By sector, hotel and construction was the worst, falling


4.6%YoY and 2.7%YoY respectively. Manufactures also fell
0.7%, slightly better than a 1.6% fall in 2Q. Sectors that
expanded modestly were financials, transportation, public
administration and electricity. Wholesale and retail trade
expanded only 0.6%.

NESDB cut GDP growth forecast


NESDB cut its 2014 GDP growth forecast to 1% from 1.5-2.0%.
It revised up private investment from -2.9% to -1.0% while
revising down public investment (from +1% to -5.0%). Export
growth was also revised down from 2% to 0% in 2014.
NESDB sees a moderate recovery in 2015, forecasting GDP
growth of 3.5-4.5% vs consensus of 4.3%. NESDB is less
optimistic about private expenditure, expecting private
investment to rise only 4.8% and consumption to grow 2.6%.
Meanwhile it forecasts public investment to increase a
substantial 9.8% and government consumption to grow 5.6%.
Export is forecasted to grow 4% and current account surplus is
expected at 2.2% of GDP.

We are less optimistic on 2015


The slower pace of domestic demand recovery and delays in
public spending have also led us to cut our GDP growth to
0.8% for 2014 and 3.7% for 2015. Consensus forecast for
2015 is 4.3%. We are less optimistic on public spending and
export recovery but expect private investment and
consumption to rise by 6% and 3% respectively. We expect the
BoT to raise the policy rate by 25bps at the end of 2015. But
if GDP grows less than 2.5% in 1Q, we believe the BoT would
seriously consider a cut in the policy rate.

10

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Market Summary
% Change

Global Indices
Dow Jones
S&P 500
Nasdaq
FTSE 100
STOXX600
Nikkei
Hang Seng

Last
17,647.8
2,041.3
4,671.0
6,672.0
115.1
16,973.8
23,797.1

1D
0.1%
0.1%
-0.4%
0.3%
0.5%
-3.0%
-1.2%

1W
0.2%
0.2%
0.4%
0.9%
-0.2%
1.2%
0.2%

1M
7.7%
8.2%
9.7%
5.7%
5.7%
16.8%
3.4%

3M
4.3%
3.0%
3.2%
-1.6%
0.4%
9.9%
-5.3%

YTD
6.5%
10.4%
11.8%
-1.1%
2.6%
4.2%
2.1%

1Y
10.6%
13.5%
17.2%
-0.3%
4.2%
11.9%
3.3%

419.6
1,715.0
115.1
985.9
477.1
Last
1,569.1
2,313.0
1,046.3

-0.2%
-0.1%
0.5%
-0.5%
-0.7%
1D
-0.4%
-0.5%
-0.5%

-0.1%
0.0%
-0.2%
-1.2%
-0.7%
1W
0.1%
0.3%
0.3%

5.7%
6.3%
5.7%
0.9%
3.0%
1M
2.6%
2.7%
3.1%

-2.0%
-1.1%
0.4%
-9.1%
-6.9%
3M
1.7%
1.0%
1.0%

2.7%
3.2%
2.6%
-1.7%
1.9%
YTD
20.8%
19.7%
18.4%

4.9%
5.8%
4.2%
-1.9%
1.3%
1Y
10.4%
8.3%
7.8%

SET Energy & Utilities


SET Banks
SET ICT

21,641.7
612.4
224.4

-0.6%
-0.6%
-0.6%

-0.2%
0.2%
1.1%

3.5%
4.2%
2.7%

2.1%
0.0%
7.9%

13.0%
34.1%
17.6%

7.2%
14.0%
2.4%

SET Commerce
SET Food & Beverages
SET Property
SET Constr Mat
SET Petrochem
SET Health Care
SET Transportation
SET Property Fund
Currency
EURUSD
USDJPY
USDCNY
USDTHB
Commodities
WTI (USD/bl)
Brent (USD/bl)
Gold (USD/tr oz)

29,433.5
12,202.2
320.6
12,044.4
868.9
4,223.0
212.0
159.0
Last
1.2450
116.65
6.1270
32.80
Last
75.64
79.31
1,186.57

-0.4%
-1.2%
0.1%
0.9%
-0.8%
-0.2%
-0.5%
0.0%
1D
-0.6%
0.3%
0.0%
0.0%
1D
-0.2%
-0.1%
-0.2%

0.6%
0.9%
0.9%
2.1%
-0.7%
-1.0%
0.4%
-0.6%
1W
0.2%
1.6%
0.1%
-0.1%
1W
-2.3%
-4.4%
3.0%

-0.5%
-1.3%
3.3%
4.1%
5.8%
0.9%
3.8%
0.1%
1M
-2.4%
9.1%
0.0%
1.2%
1M
-8.6%
-8.4%
-4.2%

-5.7%
-0.7%
3.7%
5.5%
-6.5%
1.6%
3.7%
-2.7%
3M
-6.5%
13.3%
-0.2%
2.8%
3M
-19.9%
-23.2%
-8.4%

11.7%
11.7%
37.1%
19.4%
-11.6%
53.9%
30.9%
1.2%
YTD
-9.4%
10.8%
1.2%
0.3%
YTD
-23.1%
-25.1%
-1.3%

5.3%
16.5%
15.8%
12.7%
-14.9%
44.4%
9.8%
-0.3%
1Y
-7.8%
16.4%
0.6%
3.8%
1Y
-19.4%
-23.4%
-8.0%

Treasury Yield
Last
US 2Y Yield
0.51
US 5Y Yield
1.63
US 10Y Yield
2.34
TH 2Y Yield
2.15
TH 5Y Yield
2.49
TH 10Y Yield
3.01
Cumulative Net Buy (THBmn)
Foreigners
Local institutions
Retail investors
Proprietary
Cumulative Foreign Flows (US$mn)
Thailand
Indonesia
Korea
Taiwan
Philippines

1D
-0
+2
+2
-1
-4
-3
1D
(304)
(760)
896
168
1D
(9)
36
(43)
(186)
5

1W
-3
-2
-2
-4
-9
-8
1W
159
(97)
(1,422)
1,360
1W
5
281
(67)
111
30

3M
+8
+5
-6
-24
-56
-53
3M
12,382
14,648
(29,145)
2,116
3M
387
(605)
(1,940)
1,522
(232)

YTD
+13
-12
-69
-47
-92
-97
YTD
(14,647)
47,096
(45,130)
12,681
YTD
(425)
4,247
5,789
12,625
793

1Y
+22
+28
-36
-68
-110
-105
1Y
(83,079)
65,478
5,575
12,026
1Y
(2,558)
3,800
4,714
14,034
615

MSCI ACWI
MSCI World
MSCI Europe
MSCI EM
MSCI AsiaPac ex Japan
SET
SET Index
SET100 Index
SET50 Index

Change in bps

1M
+14
+21
+15
-12
-23
-22
1M
(3,095)
14,114
(19,552)
8,532
1M
(97)
465
(235)
2,663
(221)

11

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Top 20 Short Sale as of 17 November 2014


Securities
ADVANC
PTT
KBANK
ITD
SCB
BBL
CPF
PTTEP
DTAC
KTB
BEC
INTUCH
LH
TMB
AAV
PS
CENTEL
SAMART
BJCHI
GLOBAL

Volume (Shares)
273,200
152,700
224,800
3,863,500
71,200
36,000
223,600
40,200
57,500
200,000
85,100
36,800
245,500
742,900
500,000
66,700
54,000
57,300
51,000
132,600

Turnover (Baht)
64,217,000.00
58,988,100.00
53,439,600.00
25,005,505.00
12,994,000.00
7,178,500.00
6,652,100.00
5,748,600.00
5,738,125.00
4,620,000.00
4,313,600.00
2,703,800.00
2,411,290.00
2,283,292.00
2,100,000.00
2,070,200.00
1,876,000.00
1,837,125.00
1,747,250.00
1,643,060.00

%Short Sale Volume


Average Price
Closing Price
Comparing with Auto
of Short Sale
(Baht)
Matching
(Baht)
9.06%
3.91%
9.04%
1.93%
1.99%
1.87%
1.84%
0.77%
1.94%
1.35%
5.79%
0.94%
1.13%
0.91%
6.67%
2.63%
1.68%
1.16%
2.10%
4.18%

235.00
384.00
238.00
6.40
183.00
198.50
29.50
142.00
99.75
23.00
50.25
73.00
9.85
3.06
4.16
31.00
34.25
31.75
35.00
12.30

235.05
386.30
237.72
6.47
182.50
199.40
29.75
143.00
99.79
23.10
50.69
73.47
9.82
3.07
4.20
31.04
34.74
32.06
34.26
12.39

Source: SET
*Remark - Excluding a short sale by a member that is a participating dealer or market maker of the ETF investment units for the company's account, for
the purpose of realizing a profit from a price spread (arbitrage), or for the purpose of stabilizing liquidity, as the case may be.

12

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Nov 2014
Monday

Tuesday

Wednesday

Thursday

Friday

DTAC

XD

Bt1.57

10
XD

Bt0.192

OHTL

XD

Bt4.00

DCC

17

Bt0.0852

CPNCG

XD

Bt0.196

XD

Bt0.1997

CPNRF

XD

Bt0.323

SIRIP

XD

Bt0.15

QHPF

XD

Bt0.182

ROJNA

XR

SPWPF

XD

Bt0.2188

TGROWTH

XD

Bt0.2357

TRUEIF

XD

Bt0.2603

XD

24

XD

UOB8TF

19

XD

Bt0.20

BKI

XD

Bt2.75

BKKCP

XD

Bt0.1522

EARTH

XD

Bt0.05

BLAND

XD

Bt0.04

TASCO

XD

Bt1.00

BTSGIF

XD

Bt0.156

TWZ

XR

26:3

CPTGF

XD

Bt0.1983

DSGT

XD

Bt0.06

FUTUREPF

XD

Bt0.326

XD

Bt1.00

XD

Bt0.06

TIF1

XD

Bt0.11

TTLPF

XD

Bt0.33

21

XD

Bt0.10

SPF

XD

Bt0.325

27

AMATA

HANA

Bt0.111

CHG

26

KAMART

XD

14

20

Bt0.15

25
Bt0.11

13

Bt0.67

4:1
@Bt7.0

12

18
UPOIC

XD

XD

PPF

11

CRYSTAL

LHK

ERWPF

FORTH

XD

MILL

XR

2:1

TFUND

XD

Bt0.17

TLOGIS

XD

Bt0.20

@Bt1.2

28
Bt0.15

@Bt0.55

Source: SET

13

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

List of management who submitted the changes in securities holding report


Company
BJCHI
BTNC
EPCO
IVL
KSL
KSL
L&E-W3
RS
SAMART
SVI

Name of Management

KYUYOUNG LEE
PANITARN PAVAROLARVIDYA
YUTH CHINSUPAKUL
RATHIAN SRIMONGKOL
PRAPAS CHUTIMAVORAPHAND
PRAPAS CHUTIMAVORAPHAND
PAKORN BORIMASPORN
SURACHAI CHETCHOTISAK
WATCHAI VILAILUCK
PHICHET KANOGSIRIMA
BLAND-W4 ANANT KANJANAPAS
BLA
PRAPAIVAN LIMSONG
BTS-W3
KEEREE KANJANAPAS
BTS-W3
KEEREE KANJANAPAS
EPCO
YUTH CHINSUPAKUL
FIRE
PRACHA PHROMPHORNCHAI
FIRE
VARINKAN TERAUMRANON
L&E
PUNYAMON SRIRATANAMONGKOL
L&E-W3
PUNYAMON SRIRATANAMONGKOL
NMG
SERMSIN SAMALAPA
PL
ALONGKORN THANGSUPANICH
PYLON
BORDIN SANGARAYAKUL
PYLON
CHANET SANGARAYAKUL
PYLON
VONGCHAI SANGARAYAKUL
SMT
PEERAPOL WILAIWONGSTIEN
SVI
MANOON NOONATE
SVI
PHICHET KANOGSIRIMA
TIES
SUCHAI STAPORNCHAIYASIT
TIES
SUCHAI STAPORNCHAIYASIT
TIES
SUCHAI STAPORNCHAIYASIT
TRT
TAI CHONG YIH
TRT
TAI CHONG YIH

Relationship Types
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Reporter
Spouse
Reporter
Reporter

C
C
C
C
C
C
W
C
C
C
W
C
W
W
C
C
C
C
W
C
C
C
C
C
C
C
C
C
C
C
C
C

Transaction
Date
14/11/2014
14/11/2014
13/11/2014
13/11/2014
14/11/2014
13/11/2014
13/11/2014
12/11/2014
13/11/2014
12/11/2014
13/11/2014
12/11/2014
13/11/2014
12/11/2014
14/11/2014
13/11/2014
13/11/2014
13/11/2014
13/11/2014
14/11/2014
14/11/2014
14/11/2014
14/11/2014
14/11/2014
14/11/2014
12/11/2014
12/11/2014
13/11/2014
14/11/2014
14/11/2014
12/11/2014
12/11/2014

Amount
20,000
500
550,000
10,000
50,000
55,300
1,055,553
2,300,000
772,700
500,000
10,000,000
10,000
20,000,000
27,232,318
350,000
2,100,000
100,000
30,000
30,000
10,000,000
95,600
2,375,000
6,675,000
1,375,000
100,000
2,835,700
700,000
17,000,000
17,000,000
20,000,000
200,000
158,100

Outstanding
Avg.
%
Price (Bt)
0.01
0.00
0.07
0.00
0.00
0.00
1.06
0.22
0.08
0.02
0.14
0.00
0.51
0.69
0.05
0.60
0.03
0.01
0.03
0.30
0.02
0.84
2.37
0.49
0.02
0.13
0.03
3.81
3.81
4.48
0.06
0.05

36.50
24.98
7.55
22.30
12.93
12.89
4.79
8.85
29.75
4.24
0.67
56.25
1.63
1.62
7.85
6.10
5.70
7.20
4.94
1.52
4.20
8.10
8.10
8.10
5.80
4.40
4.60
1.85
2.40
2.40
6.35
6.40

The
methods
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell

Source: SET

14

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Daily bond reports


Thai govt bond yields
Tenor(Years)
1Y
2Y
3Y
4Y
5Y
6Y
7Y
8Y
9Y
10Y

Thai Govt Bond


2.09
2.15
2.34
2.49
2.49
2.66
2.71
2.78
2.90
3.01

Change (bps)
0.00
-1.00
-1.00
-1.00
-4.00
-3.00
-5.00
-5.00
-3.00
-3.00

Swap (MID)
1.780
1.865
2.000
2.165
2.295
2.430
2.500
2.620
2.700
2.740

Change (bps)
-2.50
-4.00
-5.50
-6.00
-6.00
-2.00
-6.80
-1.50
-1.50
-7.00

Bond Swap (bps)


-31.00
-28.50
-34.00
-32.50
-19.50
-23.00
-21.00
-16.00
-20.00
-27.00

US Treasury Curve

Thai Government Bond Curve

Active Govt. Bond


LB15DA
LB176A
LB196A
LB21DA
LB236A

Tenor
0.99
2.58
4.57
7.09
8.58

Yield
2.060
2.200
2.423
2.705
2.831

Change (bps)
0.00
-2.00
-4.15
-5.60
4.10

Index
6MTHBFIX
6MFDR
MLR
BIBOR

%
1.8031
2.07
6.75
2.29

Source: Bloomberg

Comments
-The total trading value of Thai govt bonds increased by 5%. Thailands GDP of +0.60% YoY came out worse than what market had
expected (vs. consensus forecast of +1.1%). 10Y benchmark traded lower by 4bps and closed at 2.83. Govt clean price index ended
higher by 9 bps.
-Spot market, USDTHB moved in a tight range of 32.76-80.
-Yesterday US Treasury yields moved within a range of -0.51 to 2.18 bps. 2Y yields decreased by 0.39 bps while 10Y yields
increased by 1.95 bps.
Calendar of Government Debt Securities Action in November 2014
Mon 17

Tue 18

Wed 19

Thu 20

Fri 21

TB14D17A - 15,000

CB15219B - 25,000
CB15521A - 28,000

LBA37DA - 10,000

BOT177A - 30,000
SRT24NA - 700

Total
108,700

Source : www.ibond.thaibma.or.th

Total Trading Value 955,125.77mn


Buy

Remarks: Data excludes FX Bond

Sell
3,993.80
7.01
1,586.41

Asset Mgnt. Companies*


Non-Dealer License*
Foreign Companies
/

Net
2,540.73
132.64
1,032.85

1,453.07
-125.63
553.56

* Top 2 most active investors, Outright Trading TTM > 1Y

Source: Bloomberg, ThaiBMA

15

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Special Disclosures
Phatra Securities Public Company Limited (Phatra) does and seeks to do business with companies covered or mentioned in its
research reports. As a result, investors should be aware that Phatra may have a conflict of interest that could affect the objectivity
of this research report.
Phatra Securities Public Company Limited ("Phatra") under its proprietary trading desk, may, from time to time, issue derivative
warrants that have underlying securities contained or mentioned in this research report. Should Phatra be the issuer of the derivative
warrants, Phatra may act as the market maker for such derivative warrants. As a result, investors should be aware that Phatra may
have a conflict of interest that could affect the objectivity of this research report.
Copyright 2014 Phatra Securities Public Company Limited. All rights reserved. Any unauthorized use or disclosure is prohibited.
This report has been prepared based on, among other things, fundamental research reports of Phatra Securities Public Company
Limited (Phatra). It is issued by Private Wealth Management Research team and is not a publication of Phatra Research Group
(Phatra Research). The information herein was obtained from various sources: we do not guarantee its accuracy or completeness.
Certain parts of this report are taken from previous research reports issued by Phatra and/or Merrill Lynch, Pierce, Fenner & Smith
Incorporated (MLPF&S). Please see full research reports for more details.
Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any
securities or any options, futures or other derivatives related to such securities ("related investments"). Officers of Phatra or one of
its affiliates may have a financial interest in securities or the issuer(s) or in related investments.
This report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific
investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors
should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or
recommended in this report and should understand that statements regarding future prospects may not be realized. Investors
should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall.
Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future
performance.
Foreign currency rates of exchange may adversely affect the value, price or income of any security or financial instrument
mentioned in this report. Investors in such securities and instruments, including ADRs, effectively assume currency risk.
Investment principal on bonds can be eroded depending on sale price or market price. In addition, there are bonds on which
investment principal can be eroded due to changes in redemption amounts. Care is required when investing in such instruments.

16

Private Wealth Management Research


18 November 2014
A member of the Kiatnakin Phatra Financial Group

Corporate Governance Report of Thai Listed Companies 2013


Disclaimer
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is
made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the
information of a company listed on the Stock Exchange of Thailand and the Market of Alternative Investment disclosed to the public
and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an
evaluation of operation and is not based on inside information.
The survey result is as of the data appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the
survey result may be changed after that date. Phatra Securities Public Company Limited ("Phatra") does not confirm nor certify the
accuracy of such survey result. In addition, the list only includes companies under Phatras coverage except those specified.

Companies with Excellent CG Scoring by alphabetical order under Phatras Coverage


Advanced Info Service

Airports of Thailand

Banpu

Bangkok Bank

Bangchak Petroleum

BTS Group Holdings

LPN Property
Development

Charoen Pokphand Foods

Hemaraj Land and


Development

Total Access
Communication

Electricity Generating

The Erawan Group

Central Pattana

INTUCH

IRPC

Indorama Ventures

Kasikornbank

Krung Thai Bank

Ch. Karnchang

MCOT

Minor International

Preuksa Real Estate

PTT

PTT Exploration

PTT Global Chemical

Quality Houses

Ratchaburi Electricity
Generating

Robinson Department
Store

Thai Airways
International

Siam Cement

Supalai

Thanachart Capital

Siam Commercial Bank

Thaicom

Tisco Bank

Thai Military Bank

Thai Oil

True Corporation

Thai Vegetable Oil

Companies with Very Good CG Scoring by alphabetical order under Phatras Coverage
Amata Corporation

BEC World

Bumrungrad Hospital

Big C Supercenter

Berli Jucker

Central Plaza Hotel

CP All

ESSO (Thailand)

GFPT

Glow Energy

Home Product Center

Land & Houses

Major Cineplex Group

Siam City Cement

Sansiri

Asian Property
Development

Sino Thai Engineering


and Construction

Ticon Industrial
Connection

Thai Union Frozen


Product

Companies with Good CG Scoring by alphabetical order under Phatras Coverage


Asia Aviation

Bangkok Chain Hospital

Siam Global House

N/A
Companies without survey result available by alphabetical order under Phatras Coverage
MK Restaurant

Thai Beverage

Bangkok Dusit Medical


Services

Tesco Lotus Retail


Growth Property Fund

BTS Growth Infrastructure


Fund

Nok Airlines

17