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Navigating Thailand2015

December 12, 2014

Navigating Thailand2015
December 12, 2014

Table of Contents
Tighten your seatbelts................................................................................................................................. 6
1.

2.

3.

4.

5.

REVIEW ........................................................................................................................................... 6
1.1

Political developments before the coup .............................................................................. 6

1.2

Then came the May 2014 coup ........................................................................................... 6

1.3

Long honeymoon period ..................................................................................................... 7

Themes for Thai market in 2015 ...................................................................................................... 9


2.1

No election in 2015 means less noise in 1H15, but .......................................................... 9

2.2

Political labyrinth ................................................................................................................ 9

2.3

Government needs to deliver infrastructure projects ...................................................... 10

2.4

Tourism recovery............................................................................................................... 13

2015 ECONOMIC OUTLOOK ........................................................................................................ 16


3.1

2015 Macro outlook........................................................................................................... 16

3.2

The recovery so far ......................................................................................................... 16

3.3

Exports not making the cut ............................................................................................... 18

3.4

Liquidity conditions stable ................................................................................................ 18

3.5

Inflation and interest rate outlook .................................................................................... 20

3.6

Risks and issues to watch .................................................................................................. 20

RISKS.............................................................................................................................................. 22
4.1

Strong economic headwinds ............................................................................................. 22

4.2

Weak farm prices and lack of major stimulus measures .................................................. 23

4.3

Further cuts in earnings forecasts likely ........................................................................... 25

4.4

Further delay in auction of 1800 MHz licences likely ...................................................... 25

4.5

Energy reform and impact on retail gas prices ................................................................. 26

4.6

Capital outflow?................................................................................................................. 30

VALUATION AND RECOMMENDATIONS .................................................................................. 35


5.1

Remain cautious with an unchanged 1,610 index target by end-2015 ............................. 35

5.2

Sector allocation strategy .................................................................................................. 37

5.3

Top picks............................................................................................................................ 38

Sector Briefs .............................................................................................................................................. 43


Company Briefs ......................................................................................................................................... 69
Appendices .............................................................................................................................................. 201

Navigating Thailand2015
December 12, 2014

THAILAND

CIMB Analyst(s)

NAVIGATING THAILAND

Tighten your seatbelts


We believe that the market has priced in a V-shaped recovery, while a
U-shaped one is more likely. The economy is slowing down and more
earnings cuts are likely. Valuations are not cheap given the 20% rise
YTD. A stronger US$ and higher overseas rates could trigger outflows.

Kasem Prunratanamala, CFA


T (66) 2 6579221
E kasem.prunratanamala@cimb.com
Julia GOH
T (60) 3 2261 9097
E julia.goh@cimb.com

Figure 1: SET's forward P/E band


20.0

+2SD : 17.0

18.0

16.0

+1SD : 14.5

14.0

Mean : 12.1

12.0
Show Style "View Doc Map"

-1SD : 9.6

10.0

-2SD : 7.2

8.0
6.0

Highlighted Companies
Bangkok Dusit Medical (BGH)
A prime beneficiary of the ASEAN Economic
Community (AEC), as patients from neighbouring
countries are able to cross borders more easily to
seek medical treatment in Thailand, thanks to its
growing hospital network nationwide.
Gunkul Engineering (GUNKUL)
Gunkul has recurring income from two large 60mw
wind farm projects in 2015-16 for both engineering,
procurement
and
construction
(EPC)
and
operations. This would account for an estimated
80% of its earnings by 2017. Its Myanmar exposure
provides more earnings upside.
Ratchaburi Electricity (RATCH)
Its solid earnings growth of over 30% in 2014-2016,
will stem from additional capacity of 750MW (13%)
for its 40%-owned Hongsa coal-fired power plant in
2015-16.
Thaicom (THCOM)
New customer contracts and satellite projects will
increase the upside potential to our earnings
forecasts, which are already 11% higher than
consensus in 2014 and 18% higher in 2015.

4.0
Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

12M Fwd Core P/E

SOURCES: CIMB, COMPANY REPORTS

We remain cautious on the market


with an unchanged end-CY15 index
target of 1,610, based on 12.1x CY16
P/E (5-year mean). Our regional
strategist, Mr Jason Todd, remains
Underweight on Thailand. We prefer
defensive
counters
(healthcare,
alternative energy and utilities) and
sectors that are less exposed to
domestic demand (hotels). Our top
picks are AOT, BGH, GUNKUL, KCE,
MINT, RATCH and THCOM.

Laying the foundation


The government plans to introduce
inheritance tax and raise value-added
tax by 1% pt to 8% in Oct 15. The
energy reform programme is likely to
raise retail NGV prices by about 16%
over the next couple of quarters.
If the government were to bring the
excise tax on diesel to be on par with
that for other types of gasoline, diesel
price should rise by 17%. Fewer farm
subsidies are likely to cap the rebound
in
consumption
in
upcountry.
Although these structural changes are
good for the long term, we believe that
the adjustment process will be painful

and the market has not factored this


in yet. Therefore, near-term risks are
high.

Themes: focus on defensive


and tourism
We believe that the weak economy
will continue to weigh on domestic
demand. Therefore, we focus on
defensive sectors such as healthcare,
which also benefits from medical
tourism and utilities. They are less
sensitive to a slow domestic recovery.
Moreover, we believe that tourism will
see strong rebound not only from
higher tourist arrivals, but also from
higher margins as occupancies
approach optimum levels.

Infrastructure a long shot


The
progress
on
government
infrastructure projects has been
disappointing. However, it seems to
be the only hope for 2015 if the
government can really speed up its
infrastructure plans. We believe that
contractor stocks have already priced
in more government projects.

Navigating Thailand2015
December 12, 2014

KEY CHARTS
18% market EPS growth for 2015 way too
high

130

1,800.00

125

To date, consensus EPS forecasts have been lowered by


14% for 2014 and 11% for 2015, although the Stock
Exchange of Thailand (SET) Index has moved up 20%
YTD.

1,600.00

120

1,400.00

115

1,200.00

110
105

1,000.00

100

800.00

95
90

600.00

85

400.00

SET EPS 2014

SET is at 13.6x CY15 P/E

SET EPS 2015

SET Index

19.0

The SETs valuation is close to 1 s.d. above its 5-year mean


which is not attractive, in our opinion.

+2SD : 17.0

17.0

+1SD : 14.5

15.0
13.0
11.0

Mean : 12.1
-1SD : 9.6

9.0
7.0

-2SD : 7.2

5.0
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14

12M Fwd Core P/E

Local institutions supporting the market

Net Buy/Sell

Domestic institutional investors have been net buyers of


THB47bn YTD, while retail investors were net sellers of
THB55bn.

SET

40000

1800

30000

1600
1400

20000

1200

10000

1000
800

600

-10000

400
200

-30000

40179
40238
40299
40360
40422
40483
40544
40603
40664
40725
40787
40848
40909
40969
41030
41091
41153
41214
41275
41334
41395
41456
41518
41579
41640
41699
41760
41821
41883
41944

-20000

Local Institutes(LHS)

Weighting in
SET

Sector allocation strategy


We focus on sectors with less exposure to domestic
demand, such as hotels and petrochem, as well as
defensive counters, such as healthcare, utilities and
alternative energy. Our top picks are AOT, BGH,
GUNKUL, KCE, MINT, RATCH and THCOM.

SET Index (RHS)

Rec.
Weighting

OW/UW
(ppt)

OW/UW

Hotel

1.3%

2.5%

124

OW

Healthcare

3.0%

4.0%

98

OW

Utilities

1.7%

2.6%

92

OW

Petrochem

6.4%

7.2%

78

OW

Alternative Energy

0.9%

1.5%

60

OW

Technology

0.9%

1.4%

54

OW

Transportation

4.2%

4.5%

34

OW

Property

4.4%

4.8%

33

OW

Mining

0.5%

0.8%

27

OW

Construction

0.9%

1.0%

14

Food

0.6%

0.7%

Auto

0.2%

0.2%

(1)

UW

Construction Materials

0.1%

0.0%

(12)

UW

12.2%

12.0%

(22)

UW

0.3%

0.0%

(29)

UW

17.1%

16.3%

(78)

UW

1.4%

0.2%

(109)

UW

10.9%

9.5%

(142)

UW

Retail

4.8%

2.6%

(227)

UW

Total

71.7%

71.7%

Oil & Gas


Agro
Banking
Media
Telecom

SOURCE: CIMB, COMPANY REPORTS

Navigating Thailand2015
December 12, 2014

Figure 2: Top picks


Company

Bloomberg Ticker

Airports of Thailand
Bangkok Dusit Med Service
Gunkul Engineering
KCE Electronics
Minor International
Ratchaburi Electricity
Thaicom
Average

AOT TB
BGH TB
GUNKUL TB
KCE TB
MINT TB
RATCH TB
THCOM TB

Recom.
Add
Add
Add
Add
Add
Add
Add

Price
(local curr)
285.0
18.20
30.00
38.75
36.75
61.25
35.75

Target Price
(local curr)
258.0
23.80
32.00
45.00
42.00
69.00
52.00

Market Cap
(US$ m)
12,402
8,588
804
666
4,479
2,705
1,193

Core P/E (x)


CY2014
CY2015
31.7
25.9
36.5
30.7
44.4
36.6
11.3
10.3
32.5
25.6
13.1
12.1
21.1
15.5
27.2
22.4

3-year EPS
CAGR (%)
15.4%
17.2%
56.8%
27.1%
17.0%
20.3%
26.0%
25.7%

P/BV (x)
Recurring ROE (%)
CY2014
CY2015
CY2014
CY2015
4.08
3.69
13.5%
15.0%
6.23
5.57
18.0%
19.2%
7.33
6.24
18.6%
18.4%
3.67
2.93
35.7%
31.5%
5.23
4.60
17.0%
19.1%
1.53
1.43
12.0%
12.2%
2.32
2.12
11.5%
14.3%
4.34
3.79
18.0%
18.5%

EV/EBITDA (x)
Dividend Yield (%)
CY2014
CY2015
CY2014
CY2015
18.3
16.2
1.2%
1.5%
25.9
22.9
1.1%
1.4%
51.5
37.3
0.3%
0.5%
11.0
9.0
2.2%
2.6%
24.0
19.1
1.0%
1.3%
8.5
8.4
3.7%
3.9%
7.5
6.0
2.4%
4.8%
21.0
17.0
1.7%
2.3%
SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

Navigating Thailand2015
December 12, 2014

Tighten your seatbelts


The conflict started when the Yingluck government had amended the Amnesty
Bill in its second reading in Oct 2013 to allow former prime minister Thaksin
and protest leaders, among other individuals, to gain amnesty. Protestors
thought that the bill would allow him to get back his seized assets of THB46bn.
The government was late in responding to the protests.
Even though the government later dissolved the House, the rallies still
continued. The government then set the date for the general election on 2 Feb
2014, but the Democrat Party boycotted the election. Voting was disrupted in
many constituencies, and the election was later nullified by the Constitutional
Court on the grounds that the Election Commission (EC) had failed to hold
polls across the entire country on the same day, since the eligible voters in 28
constituencies failed to cast their ballots due to disruptions by anti-government
protesters. The Election Commission and caretaker government were forced to
set a new election date.
The National Anti-Corruption Commission (NACC) resolved in early May 2014
to bring impeachment proceedings against Yingluck over the rice-pledging
scheme. Thus, she was compelled to step down from being the caretaker
premier, with Mr Niwatthamrong Boonsongpaisan becoming an acting
caretaker prime minister.

Figure 3: Political events leading up to the May 2014 coup and SET index
1,600

1,550
Aug 8: House pass first
reading of amnesty bill

Nov 11: Senate rejects bill

Mar 21: Feb 2 election was


ruled unconstitutional

1,500
Nov 20: Court says Senate
bill amendment breaches
Constitution

May 7: Court ordered


Yingluck to step down
May 22: Military coup

1,450

Dec 2: Election; but with


disruption; Yingluck
continues as caretaker PM

1,400

Dec 21: Democrats to


boycott election
1,350

Aug 4: Protest starts

May 20: Martial law is


declared

1,300

Feb 28: End of Bangkok


shutdown

Dec 9: PM dissolves House,


call for snap poll

Feb 2: Election

1,250
Oct 31: House Passes 2nd
/3rd reading

Jan 13: Bangkok Shutdown


campaign begins

Jan 21: State of emergency

30/05/2014

16/05/2014

02/05/2014

18/04/2014

04/04/2014

21/03/2014

07/03/2014

21/02/2014

07/02/2014

24/01/2014

10/01/2014

27/12/2013

13/12/2013

29/11/2013

15/11/2013

01/11/2013

18/10/2013

04/10/2013

20/09/2013

06/09/2013

23/08/2013

09/08/2013

26/07/2013

12/07/2013

28/06/2013

1,200

14/06/2013

Yingluck Shinawatra, former Prime Minister

1.1 Political developments before the coup

31/05/2013

If in 2016 there is a general


election and I am still qualified to
stand, I intend to run for
parliament.

1. REVIEW

SOURCE: CIMB

1.2 Then came the May 2014 coup


After almost seven months of political deadlock between the anti-government
Peoples Democratic Reform Committee (PDRC), led by former Democrat
Partys secretary general Mr Suthep Thaugsuban, and the Yingluck government;
the military, led by the then-army chief General Prayuth Chan-o-cha, staged a

Navigating Thailand2015
December 12, 2014

coup on 22 May 2014. This was Thailands 12th coup after the country turned
into a constitution monarchy in 1932.
The coup came as no surprise to us, as we believe that Mr Suthep had escalated
the crisis, including setting up roadblocks, organising the Bangkok Shutdown in
early Jan 2014, and blocking constituencies in many provinces in the South so
that candidates could not register their applications, etc., in order to trigger a
military intervention.
But we were surprised that the Yingluck government did not see it coming,
despite the fact that the military announced martial law on 20 May without
informing the government in advance and that it refused to withdraw soldiers
and their shelters even though the situation was calmer in early 2Q14.
Both red shirt leaders and PDRC leaders walked into a trap, and they were
locked up in a military barrack following two days of failed negotiations to
settle their differences, after which the army chief declared a military coup. It
was an easy coup on the part of the military, as leaders of both sides were
locked up and their supporters could not do much without their leaders.
Having learnt from the past coups, especially the one in 2006, the military this
time round used stronger arm tactics. It has tried to disperse any political
protests before ramping up the momentum. And even more than six months
after the coup, the military still refused to lift martial law, despite the fact that
there were few protests on the street. However, the curfew was lifted
throughout the country on 13 Jun, about one month after the coup.
Figure 4: Khon Kean University students were arrested when holding out three
fingers as a sign of protest against the military coup in front of Prime Minister
Prayuth while he was giving a speech in Khon Kean province. The students were
later released

SOURCE: Twitter@WassanaNanuam

1.3 Long honeymoon period


As the political crisis prior to the coup lasted longer than prior deadlocks, many
Thais (generally from middle- and high-income segments) welcomed the coup
as they thought that the coup would end the deadlock and allow the country to
move forward. And thanks to the use of stronger arm tactics, the political
situation after the coup has been calm. Therefore, the market has been positive
on the political development and jumped 13% after the coup.
Businesspeople were also positive as the political turmoil has created too much
trouble for businesses over the past few years. Thus, they were happy that these
politicians would have to lie low over the next couple of years.
7

Navigating Thailand2015
December 12, 2014

With the surge in economic activities in early 3Q14, many people thought that
the economy had undergone a V-shaped recovery following a more stable
political environment. They have forgotten that many people withheld their
spending during the 7-month political stalemate. Thus, when political situation
remained calm after the coup, many Thais started to spend money and this
caused a big jump in economic activities. However, we believe that once this
pent-up demand is exhausted, economic activities will cool down again. And
the 3Q14 GDP growth of only 0.6% yoy confirmed our belief.
Figure 5: Long honeymoon period after the coup
1,700
Nov11 LTF tax breaks to end in 2016
1,650
1,600
1,550
May 22: Military coup
1,500

Oct 6 All 250 National


Reform Council members
appointed

May 7: Court ordered


Yingluck to step down

1,450

Mar 21: Feb 2 election


was ruled unconstitutional

1,400

Jan 13: Bangkok


1,350Shutdown campaign
begins
1,300

May 20: Martial law is


declared
Feb 28: End of Bangkok
shutdown

Feb 2: Election
Jan 21: State of
emergency

1,250

Nov-14

Nov-14

Oct-14

Oct-14

Sep-14

Sep-14

Aug-14

Aug-14

Jul-14

Jul-14

Jul-14

Jun-14

Jun-14

May-14

Apr-14

May-14

Apr-14

Mar-14

Mar-14

Feb-14

Jan-14

Feb-14

Jan-14

Jan-14

1,200

SOURCES: CIMB

Figure 6: The Thai market EPS has been revised down 14% this year and 11% next
year, but the market has risen 20% YTD
130

1,800

125

1,600

120
1,400
115
110

1,200

105

1,000

100

800
95
600

90
85
Jan-14

400
Feb-14

Mar-14

Apr-14

May-14

SET EPS 2014

Jun-14

Jul-14

Aug-14

SET EPS 2015

Sep-14

Oct-14

Nov-14

SET Index

SOURCES: CIMB, COMPANY REPORTS

Navigating Thailand2015
December 12, 2014

2. Themes for Thai market in 2015


2.1 No election in 2015 means less noise in 1H15, but
It is unlikely that a general election can take place in 2015, as a new
constitution is not drafted yet and it may need to go through a referendum,
which could take some time. Moreover, it is likely that the reform process will
take a longer time than originally thought.
The fact that Thailand is highly unlikely to have an election in 2015 may be
taken positively by the market, as politics have created many negative noises
over the past decade. However, we believe that the market expectation has
already run too high and it should already have given the government the
benefit of the doubt in managing the economy. Therefore, we believe that the
disappointment on the governments economic management is more likely to
outweigh the positives arising from the calm political climate. And with more
disappointments on the economic front, we believe that the resistance against
the military government will be stronger and those who had earlier supported
the coup may start changing their minds.
And since a general election is not likely to be held in 2015, rural economies will
not be able to benefit from election campaigning activities. And if farm prices
stay weak in 2015, it will be difficult to see a strong rebound in private
consumption in the upcountry.
Figure 7: Real GDP (% yoy) and general elections
Northeastern

Northern

Greater Bangkok

1996

8.0%

9.6%

2.8%

Election

1997

0.9%

-1.1%

-6.5%

1998

-6.3%

-5.0%

-9.5%

1999

5.8%

5.8%

4.3%

2000

0.5%

-0.5%

6.1%

2001

1.1%

1.7%

5.4%

2002

5.7%

8.9%

3.8%

2003

8.9%

9.1%

5.7%

2004

2.7%

0.8%

6.9%

2005

1.9%

4.7%

4.5%

2006

5.5%

1.3%

4.3%

2007

5.4%

3.6%

4.9%

2008

-0.9%

0.8%

0.7%

2009

6.3%

1.9%

-1.7%

2010

5.7%

3.5%

8.6%

2011

6.4%

4.6%

0.1%

2012

5.5%

6.2%

8.1%

SOURCES: CIMB, COMPANY REPORTS

2.2 Political labyrinth


Some may think that Gen Prayuth may want to contest in the next election to
gain legitimacy. However, we think that the several policies that the
government plans to implement over the next few months are not likely to win
him popular support. For instance, higher NGV, LPG and diesel prices will hurt
low-income people and businesses, while property and inheritance taxes will
hurt middle- and high-income segments. Moreover, a higher VAT will affect
everyone. Therefore, it is difficult to imagine that he would gain support from
enough people to continue as an elected prime minister after the next election,
even though the policies he plans to implement will be good for the country
over the longer term.
Thus, if it is not Gen Prayuth, who will then be the next prime minister or form
the next government. Many still believe that the Pheu Thai Party will still win
the next election. The Democrat is still too indecisive to become a credible
competitor for Pheu Thai, even though the Democrat seems to be the preferred
choice for the military to run the country, in our view.

Navigating Thailand2015
December 12, 2014

This would lead us back to the question on whether the election in early 2016 is
still likely. The concern that Pheu Thai Party will win the election and become a
new government will make the military government think twice about handing
power back to the public. That said, the government may want to stay in power
longer. But since we believe that the current government's economic
performance is likely to be weak, there will be growing resistance in 2015.
Therefore, the military government may not be able to stay very long either,
even though it may still want to maintain martial law.
We expect the pressure to mount in 2H15. Therefore, it may have to reach a
compromise with Pheu Thai so as not to encroach on each other's turf. With his
younger brother being an assistant army chief, Gen Prayuth can still have
strong support in the army after his retirement in Sep 2014. Therefore, we
believe that this would be a better exit strategy for the current government,
rather than incurring the risk of facing more resistance by staying longer.
Although the Constitution Drafting Committee is likely to design a new
constitution in such a way that there will be more appointed senators and
probably some appointed members of Parliament as well, we believe that it will
still be difficult to gain the necessary support from the general public.

2.3 Government needs to deliver infrastructure projects


Government infrastructure spending is probably the only hope to boost Thai
economy in 2015, in our opinion. But the progress so far has been quite
disappointing. One of the reasons is that due to efforts to fight graft in the
system, the military government has set up a committee, called the Budget
Monitoring and Scrutinising Committee, to review all major government and
state enterprises projects that are worth more than THB1bn (US$30m). And
since all government infrastructure projects are worth a lot more than THB1bn,
they have to undergo the scrutiny of this committee. The committee has already
asked some government agencies to review some of these projects, which
caused some delay in the rollout of these projects.
The first major government project that is likely to be awarded first is the North
Green Line project (Mo Chit-Sapanmai-Ku Kot) worth THB26.4bn (US$0.8bn).
Based on our channel checks, the bidding results are likely to be known by Dec
2014, even though the Mass Rapid Transit Authority of Thailand (MRTA)
announced earlier that the results will be known in Feb 2015. We believe that
all major contractors will get their share of the project as it will be divided into
four contracts. CH Karnchang (CK), which we believe is closest to the
government, is likely to secure the biggest contract, i.e. contract 1, while
Italian-Thai Development (ITD) is likely to get the second largest one, contract
2, followed by a joint venture between Sino-Thai Engineering (STEC) and AS
Associates, i.e. STEC-AS for contract 3, and a JV of Uniq Engineering (UNIQ),
Sino-Hydro Corp and China Harbour Engineering, i.e. UN-SH-CH for the forth
one.
But after the North Green Line, we believe that Orange Line (Taling Chan
Min Buri) worth THB115bn (US$3.5bn) is likely to be the next one. The bidding
process may start in 2Q15.
Although contractors are hopeful that the Pink Line (Khae Rai Min Buri)
worth THB59bn (US$1.8bn) can also roll out within this year, there is some risk
that the project may be redesigned as the existing design is based on a light rail
platform, which is not compatible with other mass transit lines that are heavy
lines. The government may want the Pink Line and Yellow Line (Lad Prao
Samrong), worth THB57bn or US$1.78bn, to switch to heavy lines, thus making
them compatible with the rest and more efficient for mass transit. If the
authorities decide to change the design, then the Pink and Yellow Lines will
have to go back to the drawing board, which would mean a few years of delay.
In addition, the government is reported to have a plan to create a new
government agency, the Rail Transport Authority of Thailand, to oversee both
railway and electric trains. The Transport Minister, ACM Prajin Juntong,
10

Navigating Thailand2015
December 12, 2014

expects the new agency to be up-and-running in Jun 2015. This new agency will
be tasked with the bidding process of all rail mass transits and maintaining
them, while the State Railway Authority of Thailand (SRT) and the Mass Rapid
Transit Authority of Thailand (MRTA) will be providing services to the public.
This could also mean further delays in the bidding process of future mass
transit systems, in our opinion.
Figure 8: North Green Line (Mo Chit-Sapanmai-Ku Kot)
Contract Description
1
2
3
4

Distance
Value
(km) (THB bn)

Bidders

Civil work (Mor Chit-Sapanmai)


12.0
14.0 CK, STEC, ITD, UN-SH-CH*
Civil work (Sapanmai-Ku Kot)
7.5
6.1 CK, STEC, ITD, UN-SH-CH
Civil work (depot, park & ride)
3.7 STEC-AS, CK, ITD, UN-SH-CH**
Rail system
2.6 STEC-AS, CK, ITD, UN-SH-CH
Total
19.5
26.4
* UN-SH-CH is a JV between Unique Engineering, Sino-Hydro Corp and China Harbour Engineering
** STEC-AS is a JV between STEC and AS Associates
SOURCES: CIMB, COMPANY REPORTS

Figure 9: Other mass transit systems by MRTA in the pipeline


Line

Length (km)

Stations

Development plan

17.5

13

By 2019

9.0

By 2019

11.0

By 2019

Orange

37.5

Taling Chan Cultural Center


Cultural Center Bang Kapi
Bang Kapi Min Buri
Pink

36

Khae Rai Pak Kret

6.0

By 2019

Pak Kret Lak Si Circle

12.0

10

By 2019

Lak Si Circle Outer Ring Road

10.5

By 2019

7.5

By 2019
By 2019

Outer Ring Road Min Buri


Yellow

30.4

Lat Phrao Phatthanakan

12.6

10

Phatthanakan Samrong

17.8

11

By 2029
SOURCES: MRTA, CIMB

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Navigating Thailand2015
December 12, 2014

Figure 10: 10 Mass transit network 464km

SOURCE: CIMB RESEARCH, COMPANY

Although public investments may pick up next year, it is still uncertain whether
these public investments will crowd out private investments as capacity
utilisation is still hovering around 60% (Figure 11), which is quite low.
Moreover, public investments alone will not be sufficient to revive the Thai
economy if private investments do not pick up as well, since private
investments are more than three times larger than public investments (Figure
10).
The 19% yoy decline in value of projects submitted for BOI privileges in 10M14
also does not bode well for the investment outlook next year. However, given
the political uncertainties in 1H14, we hope that there will be a pick-up in BOI
applications soon.
Figure 11: Public and private investments as a % of GDP
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Private

Public

SOURCES: CIMB, COMPANY REPORTS

12

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December 12, 2014

Figure 12: Private investments and capacity utilisation


75.0

40%

70.0

30%

65.0

20%

60.0

10%

55.0

0%

50.0

-10%

45.0

-20%

40.0

-30%

Capacity utilisation

Private investment (%yoy)

SOURCES: CIMB, COMPANY REPORTS

Figure 13: BOI applications submitted down 19% yoy in 10M14


1,400

120%
100%

1,200

80%
1,000
60%
800

40%

600

20%
0%

400
-20%
200

-40%

-60%
2001

2002

2003

2004

2005

2006

2007

2008

2009

BOI applications submitted (THB bn)

2010

2011

2012

2013

9M14

%yoy

SOURCES: CIMB, COMPANY REPORTS

2.4 Tourism recovery


No thanks to the political uncertainties in Thailand, tourist arrivals dropped
significantly. Basically, tourist arrivals just turned positive by growing 6% yoy
in Oct 14, following the government's measure to grant the exemption of visa
fees to Chinese and Taiwanese tourists for three months, starting from 9 Aug
2014. As such, Chinese tourist jumped 67% yoy in Oct.
From our channel checks with the Airports of Thailand (AOT), the number of
passengers who went through its six airports had gone up 11% yoy during 1-23
Nov 2014. Therefore, it remains to be seen whether the surge in Chinese
tourists can be sustained after the end of the visa fee exemption in early Nov
2014. Furthermore, the rebound in tourist arrivals because of the exemption of
visa fee to Chinese and Taiwanese tourists may not be as healthy as it seems, as
we believe that most of these tourists come from lower-income segments, which
would not really benefit the listed hotels that we cover, i.e. MINT and CENTEL.
However, European and American tourists were still down by 11% yoy and 7%
yoy, respectively, in Oct 2014. Although curfews were lifted in late Jun 2014,
many foreigners that we met while we were on the road thought that there are
still curfews in Thailand. This is because the government has not lifted martial

13

Navigating Thailand2015
December 12, 2014

law, which was put in place since 20 May 2014. In addition, the ongoing martial
law is also the reason that many countries still have Thailand on travel alert.
Specifically, 58 countries still have Thailand on travel alert, despite the calm
political climate, vs. 66 countries in June after the coup. With travel warnings,
many tourists are reluctant to travel to Thailand as their insurance may not
cover accidents that are caused by political turmoil in Thailand. Thus, the
tourist arrival recovery may take a longer time than expected and the rebound
may be short-lived if the government still maintains martial law. But since Thai
hoteliers have maintained a tight ship and have been through many crises over
the past decade, we believe that they are prepared to cope with the prospects of
a fragile recovery.
On the contrary, hotels in upcountry are not affected much by political turmoil.
Thus, if tourist arrivals pick up, they should be running at close to optimal
occupancy, i.e. around 75-80%. This should allow them to raise their room
rates more aggressively. In addition, at the optimal occupancy level, hotels
normally do not hand out many freebies, such as free breakfast, free Wi-Fi, or a
free night after two or three paid nights. As such, their margins should increase
nicely in 2015.

Figure 14: Tourist arrivals and political crises


3,100,000

Emergency decree
2,600,000

May 14 coup
2,100,000

1,600,000

1,100,000

Airport shutdown

May 10 unrest

600,000
Jan

Feb

2008

Mar

Apr

2009

May
2010

Jun

Jul

Aug

2011

Sep

2012

Oct
2013

Nov

Dec

2014

SOURCES: CIMB, COMPANY REPORTS

Figure 15: Tourist arrival breakdown YTD


Oceania Middle East
2%
4%

Other South Asia


5%
Americas
1% USA

Africa
1%

ASEAN
27%

3%

Other Europeans
16%

Russia
6%

Other East
Asia
Japan
10%
6%

China
19%

ASEAN

China

Japan

Other East Asia

Russia

Other Europeans

USA

Other Americas

South Asia

Oceania

Middle East

Africa

SOURCES: CIMB, COMPANY REPORTS

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December 12, 2014

Figure 16: Travel warnings


#countries Exercise
putting
caution
Reconsider need
Thailand on (Level 1-3) to travel (Level 4-5) Special events
travel alert
Apr-14

50

46

May-14

62

47

15 Declare martial law on 20 May, coup on 22 May

Jun-14

66

48

Jul-14

60

54

18 Lifted
nationwide
curfew on
13 Jun
Six countries,
Maldives,
Laos,
Cambodia,
6 Vietnam, Nigeria and Kenya lifted travel

Aug-14

60

54

Sep-14

58

54

4 UAE and Iran lifted travel warnings

Oct-14

58

54

Nov-14

58

54

4
SOURCES: Bank of Thailand

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December 12, 2014

3. 2015 ECONOMIC OUTLOOK


3.1 2015 Macro outlook
We believe that Thailands medium-term growth prospects remain positive
with potential GDP growth of 5% once its economic engines start running again.
However, considerable patience is needed before a proper upswing takes place.
We are unlikely to witness any material improvement until next year when the
governments stimulus programmes are underway and private consumption
starts to normalise in 2Q15 at the earliest. Exports will continue to see soft
demand amid the uneven global recovery and lingering structural weakness.
The tourism sector is showing signs of recovery with the number of incoming
tourist arrivals only starting to rise above last years levels in Oct, five months
after the coup in May. As such, we think a U-shaped recovery is more realistic
and project economic growth of 3.3% next year (vs. estimated 0.6% in 2014).
Figure 17: Moderate pick-up in growth in 2015, annual GDP growth (real vs. nominal)
% yoy
20
15
10
5
0
-5
-10
-15
1991

1993

1995

1997

1999

2001

2003

2005

Real GDP

2007

2009

2011

2013

2015F

Nominal GDP

SOURCES: CEIC, CIMB RESEARCH

3.2 The recovery so far


Real GDP growth has been quite flat through the year, posting a weak outturn
of 0.2% yoy in 9M14 largely supported by net trade while domestic demand
contracted. The economy turned around in 2Q-3Q but the recovery remains
slow given the weakness in domestic demand and the fragile global recovery.
Although the political situation has stabilised, a major change in government
populist policies and the elimination of farming subsidies sent a shockwave
through the rural economy.
Figure 18: GDP growth (demand side components)

Figure 19: GDP growth (supply side components)


% yoy

% yoy
40

40

30

30

20

% yoy

Title:
Source:

20
15

10 in your rep
Please fill in the values above to have them entered

20

10

10

0
-10
-20
-30
-40

-10

-5

-20

-10

-30
1Q07

2Q08

3Q09

4Q10

1Q12

2Q13

Private consumption

Govt. consumption

Gross fixed capital formation

Exports

3Q14

-15
1Q07

2Q08

3Q09

4Q10

1Q12

Agriculture

Services

Manufacturing (RHS)

Construction

2Q13

3Q14

Imports

SOURCES: CEIC, CIMB RESEARCH

16

SOURCES: CEIC, CIMB RESEARCH

Navigating Thailand2015
December 12, 2014

Hopes are pinned on a revival in government stimulus to boost growth but little
has been done so far and given the governments poor track record of project
execution, we think that the risk of delays remains high. Understandably, the
military government has taken a more conservative approach on fiscal spending
in order to clean up corruption in the public sector. As such, a new committee
the State Budget Monitoring and Scrutinising Committee has been set up to
review any government projects worth more than US$30m. However, we think
that this is likely to create bottlenecks in launching government projects.
Moreover, private investors are unlikely to make large commitments pending
further clarity on government policies and effective execution of fiscal plans.
The government is in the process of amending the Foreign Business Act (FBA),
which has the unintended consequences of creating anxiety among foreign
investors surrounding the investment environment.

Figure 20: Central government expenditure in FY2014 remains


unchanged from previous years

Figure 21: Actual rate of capital expenditure spent continued to


decline

THB bn

% spent

350
300

110

Title:
Source:

100

Please fill in the values above to have them entered in your report

250
90
200
80
150
70
100
60

50
0

50
Oct

Nov

Dec

Jan

Feb

Mar

FY 2014

Apr

May

FY 2013

Jun

Jul

Aug

Sep

FY 2005

FY 2008

FY 2012

FY 2011

Current

SOURCES: BANK OF THAILAND (BOT), CIMB RESEARCH

Figure 22: Total investment applications received

Capital

FY 2014
Total

SOURCES: MINISTRY OF FINANCE (MOF), CIMB RESEARCH

Figure 23: Total investment applications approved


THB bn

THB bn
500

Title:
Source:

400

450

350

400

Please fill in the values above to have them entered in your rep

300
350
250

300
250

200

200

150

150
100

100
50

50

0
1Q08

1Q09

1Q10

Investment applications

1Q11

1Q12

1Q13

1Q08

1Q14

4Q08

3Q09

2Q10

Investment approved

Investment applications - foreign

SOURCES: BOARD OF INVESTMENTS (BOI), CEIC, CIMB RESEARCH

17

1Q11

4Q11

3Q12

2Q13

1Q14

Investment approved - foreign

SOURCES: BOI, CEIC, CIMB RESEARCH

Navigating Thailand2015
December 12, 2014

3.3 Exports not making the cut


Despite early signs of a turnaround in domestic demand, exports which are a
key pillar of the Thai economy remain slack. Exports of goods never fully
recovered from the 2011 flood crisis. Reports also suggest that orders were
diverted elsewhere for fear of interruptions to production and logistics during
the political crisis that started in Nov 2013. We believe that aside from cyclical,
interim and exogenous factors that have prolonged the muted export
performance, underlying these problems are structural issues.
On the whole, Thailand appears to have diversified extensively its range of
agriculture products to include rice, rubber, sugar, cassava, shrimps, canned
pineapple and soy. It has also done well in terms of diversification of
manufactured exports into sectors, ranging from textiles to electrical &
electronics and automobiles. Thailands target export markets are also equally
well diversified between the G3 countries, China, Australia, core ASEAN
markets and CLMV (Cambodia, Laos, Myanmar, Vietnam).
However, its stagnant export performance has revealed underlying weakness in
its industrial base and other structural impediments. Weakening growth of
labour-intensive manufactured exports indicates a loss of comparative
advantage in the low-wage and labour-intensive sectors. Thai enterprises in
various industries are also adjusting their investment plans in preparation for
the loss of Generalised System of Preferences (GSP) privileges in the EU. These
include relocation of factories to countries that still enjoy the tariff privileges or
those that have free trade agreements (FTAs) with the EU. Mid- and high-tech
products suffer from limited local inputs and high trade dependency as
Thailand remains an assembler and does not specialise as a manufacturer in
research, design and innovation.
The entire export-oriented sector has been built on capital investment and a
large pool of cheap labour, which is easily replicated in other low-cost countries.
Instead, the country needs more durable technological capacities on the part of
local producers and workers. As such, prospects for future development depend
upon industrial restructuring through the creation of new growth industries, be
it in agriculture or manufacturing.

Figure 24: Thailand's exports not picking up with global


recovery, manufacturing production and OECD Composite
Leading Index (CLI)
3MMA, % yoy

Figure 25: Thailand's major exports components

3MMA, % yoy

50

3MMA, % yoy

Title:
Source:

120

40

100
4

30

80

20

Please fill in the values above to have them entered in your rep

60

10

40
0

20

-10

-2

-20

-20
-4

-30
-40
Jan-07

-40

Feb-08

Mar-09

Apr-10

Exports, US$ terms

May-11
MPI

Jun-12

Jul-13

-6
Aug-14

-60
Jan-07

Feb-08

Mar-09

Apr-10

Agriculture products
Manufacturing products

OECD CLI (RHS)

SOURCES: OECD, CEIC, CIMB RESEARCH

May-11

Jun-12

Jul-13

Aug-14

Agro industrial products


Mineral products

SOURCES: CEIC, CIMB RESEARCH

3.4 Liquidity conditions stable


A current account surplus of US$7.3bn or 2.6% of GDP in 9M14 helped to offset
outflows in the financial account, though the surplus came about due to a
collapse in imports (-9.4% yoy) relative to exports (-0.7% yoy). Overall foreign
18

Navigating Thailand2015
December 12, 2014

reserves has declined US$7bn or 4% to US$161bn as at end-Oct, which covers


nine months of imports and 2.7 times short-term external debt.
Generally liquidity conditions in the banking sector remain stable, with the
high level of liquid assets held by banks relative to its deposits and borrowings
at 27% as at Jun 14, which far exceeds the minimum legal requirement of 6%.
This reflects that commercial banks have enough liquid assets to absorb deposit
outflows. The loan to deposit (including B/E) ratio continues to trend higher
but the slowdown in deposits and B/E is in part due to savers reallocation of
savings towards investment in higher return assets such as stock, mutual fund
and life insurance as a result of the low deposit interest rate environment.
Competition between banks to mobilise deposits has also moderated.
Going forward, deposit mobilisation is expected to pick up in tandem with
rising demand for credit with improvement in private confidence and clarity on
government policies. However, competition for deposits will not be as strong as
in 2013 given the expectations of a moderate recovery. Moreover, commercial
banks continue to maintain strict lending standards, particularly for selected
consumer segments.
Figure 27: Commercial banks ratio of liquid assets to deposits

Figure 26: Commercial banks' loan to deposit (incl. B/E) ratio


%

% yoy
20

% yoy

100

50

95

40

Title:
Source:

18
16

38
36

Please fill in the values above to have them entered in your report
34

14

30

90

32

12
10

20

30

10

28

85

8
80

26
0

24

75

-10

2
0
Jan-07

Dec-08
Loans

Nov-10
Deposits (incl. B/E)

Oct-12

70
Sep-14

22

-20
Jan-08

Nov-08

Sep-09

Jul-10

May-11

Mar-12

Jan-13

Nov-13

20
Sep-14

LD ratio (incl. B/E) (RHS)

Deposits

Liquid assets

SOURCES: BOT, CIMB RESEARCH

Figure 28: Balance of payments components

Liquid asset to deposit (RHS)

SOURCES: BOT, CIMB RESEARCH

Figure 29: Foreign reserves


US$ bn

US$ bn
7

US$ bn

Title:
Source:

195

10

190

Please fill in the values above to have them entered6 in your report

185

180

175

170

165

-2

160

-4

155

-6

150

-8

1
-1
-3
-5
-7
Jan-11

145
Jan-11
Dec-11
Current account

Nov-12

Oct-13

Oct-11

Jul-12

Apr-13

Jan-14

-10
Oct-14

Sep-14

Monthly change (RHS)

Capital and financial account

SOURCES: BOT, CIMB RESEARCH

19

Foreign Reserve

SOURCES: CEIC, CIMB RESEARCH

Navigating Thailand2015
December 12, 2014

3.5 Inflation and interest rate outlook


The GDP deflator eased further to 1.0% yoy in 3Q14 (2.0% in 2Q) and the
consumer price index (CPI) rate also moderated to 2% (2.5% in 2Q), while the
producer price index (PPI) rose 0.1% yoy (1.4% in 2Q). In 10M14, headline CPI
rose 2.1% yoy (10M13: 2.3%).
The Bank of Thailand (BOT) proposed an average headline inflation target
range of 1.5-4.5% in 2015, in the minutes of the Sep Monetary Policy
Committee (MPC) meeting. We project average annual headline inflation of 2%
in 2015 (vs. estimated 2% in 2014). Given that the inflation risks have abated
amid lower oil prices and ample excess capacity, there is room for the central
bank to lower rates if needed. If the fiscal stimulus is delayed and the risk of
stagnation rises, we think that the BOT will be compelled to ease rates.
As at 26 Nov, the baht has declined 0.3% to THB32.8 against the US dollar vs. a
0.82% gain to 32.44 at end-Jun. We expect the THB/US$ to rise further to 36
by end-2015 as the dollar rebounds. Key support factors for the baht in the near
term include calmer politics, an improved growth outlook and ample foreign
reserves.
Figure 31: Baht spot vs. trade weighted baht (Real Effective
Exchanger Rate, REER)

Figure 30: Inflation and interest rate


% yoy; %

THB/US$

5.0

Index

Title:
Source:

34.0

4.5

115

33.0

110

4.0

Please fill in the values above to have them entered in your rep

32.0

3.5

105

3.0

31.0

2.5

100
30.0

2.0

95

1.5

29.0

1.0

90

28.0
0.5
0.0
Jan-10

Aug-10

Mar-11

Oct-11

Headline CPI

May-12

Dec-12

Core CPI

Jul-13

Feb-14

27.0
Jan-10

Sep-14

85
Sep-10

May-11

Jan-12

THB/USD

Policy rate

SOURCES: CEIC, CIMB RESEARCH

Sep-12

May-13

Jan-14

Sep-14

REER

SOURCES: BIS, CEIC, CIMB RESEARCH

3.6 Risks and issues to watch


Farm prices have fallen sharply this year, thus depressing both export values
and farm incomes. A new scheme to give cash handouts to the rice farmers
based on the area under paddy cultivation instead of the harvest-linked subsidy
by the former government is underway. However, the first tranche of payments
has barely started to trickle down by mid-Nov with only 10% payments made
well short of the 30% earmarked. Aside from this, the government has not
announced any other concrete policy to restructure the agriculture sector which
employs over 42% of the countrys labour force and remains the largest
employing sector but accounts for only 4% of the total wage bill. We believe that
this is the root cause of Thailands large income disparity, wide political and
social divisions, and risks Thailand being caught in the middle-income trap.
With energy reforms in the pipeline, the government will soon raise the excise
tax on diesel. However, thanks to the decline in global oil prices, the increase in
retail fuel prices should be manageable. But the government is looking into
other avenues to boost revenue streams, including the introduction of a
property tax, inheritance tax, and may also raise the VAT next year, which does
not bode well for consumption.
Although the share of household debt to GDP remains high at 82.3% as at
end-2Q14 (vs. 61% in 2009), growth has moderated from double-digit pace over
20

Navigating Thailand2015
December 12, 2014

the last four years to 8% as at mid-2014. Given the high percentage of indebted
households and muted economic growth, the debt servicing ability of
households remains an important risk factor that could dent potential
consumption. As at end-2Q14, the debt servicing ability of households
deteriorated slightly and the delinquency and NPL ratios of consumer loans
edged up to 6% (vs. 5.8% in 1Q14) mainly due to auto leasing and other
personal loans. The upside is household liquidity remains high as reflected by
the ratio of household financial assets to household debt, which stabilised at 2x.
Ultimately, the sustainability of the recovery rests on continued political
stability and private sector participation. Greater clarity on government policies
and effective execution of fiscal plans will help to restore investor confidence
and drive private investment. After the last coup in 2006, the military
government stayed for a year. But there is a growing possibility is that it may
stay for longer this time.

Figure 33: Thailands primary commodity prices

Figure 32: Nominal farm income and farm production

Price

% yoy
80

Price

Title:
Source:

100

700

90
600

60

Please fill in the values above to have them entered in your report

80

500

70
40
60

400

50

20

300

40
0

30

200

20
100

-20

10

-40
Jan-08

0
Jan-13
Jan-09

Jan-10

Jan-11

Jan-12

Nominal farm income

Jan-13

0
Apr-13

Jul-13

Oct-13

Jan-14

Apr-14

Jul-14

Oct-14

Jan-14
Rubber (THB/kg)

Farm production

Sugar (US$/lb)

SOURCES: BOT, CEIC, CIMB RESEARCH

Figure 34: Thailand household debt

Rice (US$/M T) (RHS)

SOURCES: BLOOMBERG, CIMB RESEARCH

Figure 35: Ratio of household financial assets to debt


%

THB tr
12

Times

THB tr

Title:
Source:

30

90
80

3.0

25

10

2.5

70
8

Please fill in the values above to have them entered in your rep

60

20

2.0

15

1.5

10

1.0

0.5

50
6
40
4

30
20

2
10
0
1Q03

0
2Q04

3Q05

4Q06

1Q08

2Q09

3Q10

4Q11

1Q13

2Q14

0.0
1Q11

4Q11

3Q12

Household debt
Household debt

% of GDP (RHS)

2Q13

1Q14

Household financial assets

Financial assets to debt (RHS)

SOURCES: BOT, CIMB RESEARCH

21

SOURCES: BOT, CIMB RESEARCH

Navigating Thailand2015
December 12, 2014

4. RISKS
4.1 Strong economic headwinds
Exports is Thailands biggest economy driver, forming 73% of GDP in 9M14. At
the beginning of this year, the authorities expected exports to expand by 4% yoy
in 2014. A few months later, the government lowered its 2014 export growth
forecast to 3% and subsequently to 2%. It now projects zero export growth in
2014, after exports contracted by 1% in 9M14.
In our view, there are structural reasons for Thailands weak export
performance, including:
1) Thailand is not part of the major supply chain for high-end electronic parts,
which are used in mobile gadgets such as the iPhone and iPad. As such,
Thailands exports of computers and parts have underperformed total exports
over the past decade (Figure 35). Exports of computers and parts accounted for
12% of Thailands total exports in 2000 but only comprised 7% in 2013.
Thailands failure to move into the higher value-added computers and parts
supply chain could be due to the series of political crises. It would take
significant time and effort for Thailand to attract foreign investment in new
technology. It would also require a more stable political environment.
Therefore, we do not expect Thailands exports of computers and parts to turn
around in the near term.
In addition, an economic slowdown in China will also hurt Thailand's export
performance. Note that Thailands exports to China contracted 5% vs. flat
growth for total exports in 10M14. A further slowdown in China will also weigh
down Thailand's export growth in 2015.
Figure 36: Exports of computers and parts vs. total exports
60%
50%
40%
30%
20%
10%
0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9M14
-10%
-20%
Thai exports (%yoy)

Exports of computer and parts (%yoy)

SOURCES: CIMB, COMPANY REPORTS

2) Thailands auto exports, which were strong in the past decade, have started
to face competition from its neighbouring countries in 2014. The weaker auto
exports could also be attributable to the countrys political problems, which are
forcing the carmakers to diversify their investments away from Thailand.
Indonesia appears to be a natural choice, given its large domestic market. Auto
exports only contributed 5% of Thailands total exports in 2000 but rose to 14%
in 2013 and 9M14.

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Navigating Thailand2015
December 12, 2014

Figure 37: Thailands auto exports facing more competition from neighbouring
countries
60%
50%
40%
30%
20%
10%
0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9M14
-10%
-20%
-30%
Thai exports (%yoy)

Auto exports (%yoy)

SOURCES: CIMB, COMPANY REPORTS

3) Thailands farming subsidies have reduced the competitiveness of certain


agricultural exports such as rice. This, in turn, has weighed down export
performance over the past few years.
Figure 38: Weak farm exports weighed down export growth
50%
40%
30%
20%
10%
0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9M14

-10%
-20%
-30%
Thai exports (%yoy)

Agriculture exports (%yoy)

SOURCES: CIMB, COMPANY REPORTS

4.2 Weak farm prices and lack of major stimulus measures


Although the political situation remained calm after the coup, the major change
in government policies the elimination of farming subsidies sent a
shockwave through the rural economy, in our opinion. The farmers have
become dependent on farming subsidies as the previous governments provided
support to upcountry farmers. The sudden change in government policy,
without a proper plan to cushion the blow, makes it difficult for the upcountry
population, especially given the weak farm prices. The price of paddy rice has
fallen 13% YTD, while the price of smoked rubber third grade has plunged 25%
YTD.
Thailand produced 37.7m tonnes of paddy rice last year. Assuming that the
paddy rice price falls 13% in 2014, the farmers would lose revenues of around
THB28bn. In an attempt to compensate the farmers, the government will pay
subsidies of THB1,000/rai (or THB2,500/acre) to farmers who own land
measuring 1-15 rai (0.4-6 acres). The government expects total compensation to
23

Navigating Thailand2015
December 12, 2014

amount to around THB40bn in 2014. However, the subsidy disbursement has


been very slow in 2014, as the government aims to minimise corruption in the
disbursement process.
As for rubber, Thailand produced about 4.4m tonnes last year. Thus, a 25%
decline in rubber price would translate into farmers lost revenues of around
THB82bn in 2014. The government tries to compensate the rubber farmers by
providing subsidies similar to those for rice farmers, as well as setting up a
THB6bn fund to support rubber prices. However, the governments measures
have failed to prop up rubber prices in 2014. Therefore, the rural economy has
suffered badly in 2014, as reflected in the weak retail same-store-sale growth
(SSSG).
Figure 39: Paddy rice price fell 13% YTD

Figure 40: Rubber price dropped more than 20% YTD

12,000

70%

10,000

Title:
Source:

140.00

60%

100%

120.00

80%

50%

30%
6,000

Please fill in the values above to have them entered


in your rep
60%

100.00

40%

8,000

80.00

40%

60.00

20%

40.00

0%

20.00

-20%

20%
10%

4,000

0%

-10%

2,000

-20%
-

-30%

THB/ton

-40%

%yoy

THB/kg

SOURCES: Office of Agricultural Economics

%yoy

SOURCES: Office of Agricultural Economics

The rice subsidies gave farmers an incentive to grow more rice and the
countrys rice output has increased from about 30m tonnes in 2005 to 37.7m
tonnes in 2013. Given the 18m tonnes of rice inventory under the Yingluck
governments rice-pledging scheme, Thailands huge rice stockpile is likely to
continue to put pressure on rice prices next year.
The high rubber prices a few years ago encouraged farmers to plant more
rubber trees, causing the mushrooming of rubber plantations beyond the
Southern region (traditional rubber-growing area in Thailand). Hence, there
was a big spike in rubber output over the past couple of years. In our view, the
higher rubber output will continue to weigh on rubber prices in 2015 as well.
Figure 41: Thailand's annual output of paddy rice and rubber
45.0

4.5

40.0

4.0

35.0

3.5

30.0

3.0

25.0

2.5

20.0

2.0
2005

2006

2007

2008

Paddy rice output (m tonnes)

2009

2010

2011

2012

2013

Rubber output (m tonnes) (RHS)

SOURCES: CIMB, COMPANY REPORTS

24

Navigating Thailand2015
December 12, 2014

4.3 Further cuts in earnings forecasts likely


The market consensus for EPS growth was 11% for this year and 14% for next
year at the beginning of the year and had been quite stable even after the May
2014 coup. However, after the release of disappointing 2Q14 corporate results,
market consensus for EPS growth this year was revised down to 7% but next
years growth was revised up to 17%.
Analysts may just cut 2014 forecasts but did not slash 2015 numbers in Aug
2014, as they hoped that the economy would see a V-shaped recovery after the
coup as the economic activities seemed to have picked up nicely. However, they
may have forgotten that during the 7-month political stalemate, people may not
be in the mood to spend money, and the roadblocks and political protests may
make it difficult for people to come out to shop. As such, when the political
situation calmed down after the coup, any pent-up demand was released. Once
this demand was exhausted, economic activities have slowed down again. As a
result, the market consensus for EPS growth this year is now revised down to
2% and that for next year stands at 18%. We believe that the market is still
optimistic about next years outlook and that the EPS growth number could be
revised down to single digits.

Figure 42: Thai market EPS has been revised down 14% this year and 11% next year,
but the market has risen 20% YTD
130

1,800

125

1,600

120
1,400
115
110

1,200

105

1,000

100

800
95
600

90
85
Jan-14

400
Feb-14

Mar-14

Apr-14

May-14

SET EPS 2014

Jun-14

Jul-14

Aug-14

SET EPS 2015

Sep-14

Oct-14

Nov-14

SET Index

SOURCES: CIMB, COMPANY REPORTS

4.4 Further delay in auction of 1800 MHz licences likely


We have become less optimistic about the visibility of spectrum auctions taking
place as per scheduled in Jul-Aug 15 as the government still has many
milestones to hit before proceeding with the auctions. Based on the existing
regulatory structure, the National Broadcasting and Telecommunications
Commission (NBTC) will have to resume the spectrum auction process in Feb
15 or not later than Mar 15 in order to hold an auction in Jul 15. However, the
ongoing transition from the ICT Ministry into the Digital Economy Ministry has
led to more uncertainties regarding the NBTCs authority to allocate spectrum.

25

Navigating Thailand2015
December 12, 2014

Figure 43: Digital Economy Ministry framework

Figure 44: Digital Economy Ministry structure

SOURCES: CIMB, Bangkok Post, COMPANY REPORTS

SOURCES: CIMB, Bangkok Post, COMPANY REPORTS

In Jul 14, the NCPO ordered the NBTC to postpone the planned spectrum
auction for 1800MHz for 12 months in order to give SOE telcos (TOT and CAT)
a longer grace period to come up with their survival plans. On 21 Jul 14, Deputy
Prime Minister General Prawit Wongsuwan set up the Digital Economy
working group, with Deputy Prime Minister MR Pridiyathorn Devakula as the
chairperson alongside eight other members. The group is tasked with drafting
the ministry bill. The military government has proposed a digital economy
policy framework that will involve 1) the transition of the ICT Ministry to the
Digital Economy Ministry, 2) the amendment of the Frequency Allocation Act
to restructure the NBTC and place it under the supervision of the Digital
Economy Ministry, and 3) the amendment of the Telecoms Business Act.
The market is likely to be confused with the misalignment of the junta
governments Digital Economy Policy and the NBTCs mandate to auction
1800MHz spectrum in Jul-Aug 15 as planned. This implies higher uncertainties
with regard to the spectrum auction. The visibility of the spectrum auction is
certainly the key swing factor to determine mobile operators' share price
performances in FY15.
True will be a prime beneficiary of the lengthy delay in the 4G spectrum auction,
as the award will weaken its now superior competitiveness in spectrum holding,
regulatory cost and 3G/4G first-mover advantage. On the contrary, AIS will
clearly benefit the most if the spectrum auctions can happen on time as AISs
bandwidth limitation will be resolved, thus allowing it to regain its
competitiveness.

4.5 Energy reform and impact on retail gas prices


With the recent appointment of Energy Committees of the National Reform
Council, we believe that the government is likely to continue to remove
subsidies for NGV and raise the excise tax on diesel. The military government
has raised NGV prices by THB1/kg to THB11.50/kg on 1 Oct 2014 and another
THB1/kg on 3 Dec 2014 to THB12.50/kg. Meanwhile, the government also
raised the LPG prices by THB1.03/kg to THB24.16/kg, thereby removing the
remaining subsidy for LPG.
With recent sharp plunge in oil prices as well as gas prices, we believe that NGV
prices will not have to rise much following the subsidy removal. That said, the
26

Navigating Thailand2015
December 12, 2014

cost of NGV should now be about THB8/kg vs. THB9/kg before the sharp
plunge in oil prices. The cost to transport gas should remain stable at about
THB5.56/kg. So, the new cost of NGV should be about THB14.5/kg, including
7% value-added tax, down from THB15.58/kg previously. With the current
market price of THB12.50/kg, the retail NGV price would have to rise by
another THB2.00/kg or about 16%.
Which one has higher impact on the public? (LPG vs. NGV) Between
LPG and NGV, we believe that the LPG price increase will impact the public
more than the NGV price increase. This is due to 1) the number of vehicles
using LPG accounts for 3.27% of Thailands total 35.4m vehicles. This compares
with only 1% for NGV; and 2) LPG price increase will impact not only the
transportation sector but other segments like cooking gas, industrial, and
petrochemicals as well, while NGV is used only in the transportation sector.

Figure 45: Thailand's energy reforms by EPPO


Energy reform
1 Acceleration and restructure of solar power sector
Clarification of gas pipeline separation

Party impacted
EA, GUNKUL, SOLAR, SPCG
PTT

Impact
Positive
Positive

Date
18-Aug-14

2 Restructuing of petroleum price for diesel, gasoline, gasohol

Oil fund, Ministry of Finance

Negative

28-Aug-14

PTT, PTTGC

PTT (+)
PTTGC (-)

4Q14F

RATCH, GLOW, EGCO


BANPU, IRPC

Positive

Nov-14

3* Price lifting for LPG and/or NGV

4* New Power Development Plan 2015 (PDP 2015) announcment


Including new potential bidding capacity for coal and gas-fired power plant
Including potential increase in alternative energy capacity in PDP 2015
Note: 3* and 4* are the expected announcement assumed by CIMB

SOURCES: CIMB, COMPANY REPORTS

Figure 46: Brent vs. Gasohol 95

Figure 47: Brent vs. diesel prices


THB

USD
140
130
120

44

USD
140

42

130
120

40

110

THB
31

Title:
Source:

30

Please fill in the values above to have them entered in your rep
29

110
38

100

100

28

36
90

90

34

80
70

32

70

60

30

60

Brent (USD)

27

80

Gasohol 95 (THB)

26
25

Brent (USD)

SOURCES: CIMB, COMPANY REPORTS

Diesel (THB)

SOURCES: CIMB, COMPANY REPORTS

The retail prices of diesel are likely to move up as well. Prior governments tried
to cap diesel prices below THB30/litre to limit the impact on transportation
cost and the cost of living. To date, Brent oil prices have plunged more than
30%, but the retail prices of gasoline in Thailand have not come down as much,
since the government levies various taxes on gasoline. As such, gasoline prices
have fallen by about 13-15%, while diesel prices have declined by only 2% as the
government starts collecting contributions to the Oil Fund from diesel, rather
than providing subsidies from the Oil Fund for diesel. However, excise tax and
municipal tax on diesel are still way below other gasoline prices. Therefore, we
believe that the current government will start raising these taxes on diesel. We
believe that ultimately retail diesel prices will be closer to Gasohol 95 E10 or
27

Navigating Thailand2015
December 12, 2014

about THB33.20/litre, representing a 17% increase (+THB4.81/litre) from the


current level. Again, we believe that the government will split the increases into
several instalments. However, if oil prices move up significantly in the future,
retail gasoline prices in Thailand will become more volatile.

Figure 48: Price structure of petroleum products (28 Nov 2014)


UNIT:BAHT/LITRE

EX-REFIN.

TAX

M. TAX

OIL

CONSV.

WHOLESALE

VAT

WS&VAT

(AVG)

B./LITRE

B./LITRE

FUND

FUND

PRICE(WS)

ULG

19.1895

5.6000

0.5600

9.6500

0.2500

35.2495

2.4675

37.7170

GASOHOL95 E10

20.2928

5.0400

0.5040

4.1500

0.2500

30.2368

2.1166

32.3534

GASOHOL91

20.0649

5.0400

0.5040

2.4500

0.2500

28.3089

1.9816

GASOHOL95 E20

21.3051

4.4800

0.4480

0.7000

0.2500

27.1831

GASOHOL95 E85

26.9844

0.8400

0.0840

-8.2300

0.2500

H-DIESEL

20.3479

0.7500

0.0750

4.3000

0.2500

MARKETING

VAT

RETAIL

3.4047

0.2383

41.36

1.8192

0.1273

34.30

30.2906

1.8593

0.1302

32.28

1.9028

29.0859

1.7702

0.1239

30.98

19.9284

1.3950

21.3234

1.4548

0.1018

22.88

25.7229

1.8006

27.5235

1.7444

0.1221

29.39

MARGIN

SOURCES: CIMB, COMPANY REPORTS

Figure 49: Price structure of petroleum products (27 Dec 2013)


UNIT:BAHT/LITRE

EX-REFIN.

TAX

M. TAX

OIL

CONSV.

WHOLESALE

VAT

WS&VAT

(AVG)

B./LITRE

B./LITRE

FUND

FUND

PRICE(WS)

ULG

25.9942

7.0000

0.7000

10.0000

0.2500

43.9442

3.0761

47.0203

GASOHOL95 E10

26.2972

6.3000

0.6300

3.3000

0.2500

36.7772

2.5744

GASOHOL91

26.0681

6.3000

0.6300

1.2000

0.2500

34.4481

GASOHOL95 E20

26.5090

5.6000

0.5600

-1.3000

0.2500

31.6190

GASOHOL95 E85

26.9851

1.0500

0.1050

-11.6000

0.2500

H-DIESEL

27.3249

0.0050

0.0005

-0.7000

0.2500

MARKETING

VAT

RETAIL

0.9623

0.0674

48.05

39.3516

1.1013

0.0771

40.53

2.4114

36.8595

1.1406

0.0798

38.08

2.2133

33.8324

1.6333

0.1143

35.58

16.7901

1.1753

17.9654

5.9015

0.4131

24.28

26.8804

1.8816

28.7620

1.1477

0.0803

29.99

MARGIN

SOURCES: CIMB, COMPANY REPORTS

Figure 50: Brent vs. LPG and NGV retail prices


THB

140USD

25

130

23

120

21

110
19

100
90

17

80

15

70

13

60

11

50
9

40
30

20

Brent (USD)

LPG (THB)

NGV (THB)

SOURCES: CIMB, COMPANY REPORTS

28

Navigating Thailand2015
December 12, 2014

PTT is prime beneficiary of higher NGV and LPG prices. Currently, the
demand for NGV is 8,787 tonnes per day or 8.8m kg per day, equivalent to
3.2m tones p.a. Of this, only 19% of total consumption is for taxis and public
buses, the two key segments that are likely to be subsidised given the impact on
the general public. PTT currently subsidises an additional THB1/kg for these
two segments, bringing the NGV price for these two segments down to
THB9.5/kg.
PTT incurred losses of THB19bn from NGV subsidies in 2013 due to its low,
capped price of THB10.5/kg vs. its actual cost of THB16/kg, based on 9.5m kg
demand per day. The loss of THB5.2/kg for NGV comes from PTTs high cost
structure THB11/kg for the gas cost, THB3.7/kg for other operating costs
including SG&A and depreciation, as well as transportation cost of THB1.5/kg
for delivery from the 20 mother stations at the pipeline to the 356 daughter
stations. Hence, we estimate that the NGV loss could swell to THB16.7bn in
2014 or 16% of its 2014 net profit if this NGV price cap continues.
We estimate that every THB1/kg increase in NGV and LPG prices would result
in an upside of 2.4% and 0.7%, respectively, to our 2015 net profit forecast of
THB110bn for PTT. In terms of valuation upside, every THB1/kg price increase
in NGV and LPG would result in an upside of 1.8% and 1.1%, respectively, to
PTTs SOP target price of THB400.

Figure 51: NGVs impact on PTT


Sold at capped price/cost
Estimate impact to PTT
Sold at netback
Price increase
% price increase
No of month impacted
Impact to after tax earnings
CIMB
BB consensus
CIMB's net profit forecast
BB consensus net profit forecast
No of shr outstanding
EPS impact
Valuation impact
at P/E 8x
Target price
CIMB
BB consensus

Quantity (mtpa)
3.3
Quantity (mtpa)
3.3
3.3
2014F
1.0
219
105,720
101,193
0.2%
0.1%
2,856
0.077
0.61
0.2%
400
353

Price (US$/tonne)
313
THB/kg
10.0
1.0
10%
2015F
12
2,628
110,730
107,367
2.4%
0.8%
2,856
0.920

month
THB m
THB m
THB m

mn shares
THB/shr

7.36 THB/shr
1.8%
400 THB/shr
353 THB/shr
SOURCES: CIMB, COMPANY REPORTS

29

Navigating Thailand2015
December 12, 2014

Figure 52: LPGs impact on PTT's GSPs


Production
Sold at netback
Sold at capped price
Estimate impact to PTT
Current price
Market price
Price increase
% price increase
No of month impacted
Impact to after tax earnings
CIMB
BB consensus
CIMB's net profit forecast
BB consensus net profit forecast
No of shr outstanding
EPS impact
Valuation impact
at P/E 8x
Target price
CIMB
BB consensus

Quantity (mtpa)
2.7
0.7
2.0
Quantity (mtpa)
2.0
na
2.0
2014F
1.0
133
105,720
101,193
0.1%
0.1%
2,856
0.047

Price (US$/tonne
406
616
333
THB/kg
10.7
28.0
1.0
9%
2015F
12
1,600
110,730
107,367
0.7%
0.8%
2,856
0.560

0.37
0.1%
400
353

month
THB m
THB m
THB m

mn shares
THB/shr

4.48 THB/shr
1.1%
400 THB/shr
353 THB/shr
SOURCES: CIMB, COMPANY REPORTS

4.6 Capital outflow?


There are some concerns that there will be some outflows as US dollar is
strengthening and overseas interest rates move up as the Bank of Thailand may
not be ready to raise domestic interest rates amid a weak economy. Foreign
investors held THB687bn (US$21bn) of Thai bonds as at end-Oct 14, or about
10% of the total value of the bond market of THB6.7tr. About 90% of foreign
holdings are in Thai government bonds, while the remaining 10% are in Bank of
Thailand bonds.
Foreign holdings peaked at about THB863bn (US$26bn) or about 13% of total
bonds outstanding in Apr 2013 before concerns over the tapering of the US
Fed's QE stimulus programme surfaced. Since then, THB176bn (US$5.3bn) had
been withdrawn from the bond market. Thus, if local rates do not move up
when overseas rates rise, there could be some outflows from the Thai bond
market, in our opinion.
Figure 53: Foreign holdings of Thai bonds
1,000,000

14%

900,000

12%

800,000
10%

700,000
600,000

8%

500,000
6%

400,000
300,000

4%

200,000
2%

Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14

100,000

Foreign investors

0%

% of total

SOURCES: CIMB, COMPANY REPORTS

30

Navigating Thailand2015
December 12, 2014

Figure 54: Foreign inflows into bond market


Repo Rate 1 Day (%)

Net inflow Foreign (USD m )

6,000

3.5

5,000

4,000

2.5

3,000

2,000

1.5

1,000

(1,000)

(2,000)

Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14

0.5

Outright (TTM > 1 Y)

Outright (TTM <= 1 Y)

Outright

SOURCES: CIMB, COMPANY REPORTS

Meanwhile, foreign holdings in the Stock Exchange of Thailand is already low


at the moment, at about 33.1%, down from 37% as at end-Sep 12. Generally,
their holdings in Thailand are now marginally above the level during the Global
Financial Crisis of 32.8% as at end-Dec 08. Therefore, any further sell-off
coming from foreign investors may not amount to much.
Foreign investors have been net sellers of THB8.9bn YTD (US$270m),
following net sales of THB193bn (US$6.4bn) in 2013. Meanwhile, local
institutions have been supporting the market with THB47bn (US$1.4bn) net
buying activities YTD. They were net buyers of THB108bn (US$3.6bn) in 2013.
Retail investors have been selling actively as well with THB55bn (US$1.7bn) net
selling orders YTD, while they were net buyers of THB87bn (US$2.9bn) in 2013.
Brokers proprietary desks were net buyers of THB17bn YTD (US$0.5bn), while
they were net sellers of THB1.7bn (US$57m) last year. As a result, we do not
think that there will be much selling pressure from foreign investors in 2014,
but the bulk of the selling pressure is likely to come from domestic institutions
that have been buying aggressively over the past couple of years with a net
buying amount of about THB155bn (US$5.1bn).

Figure 55: Foreign holdings in SET


SET Total Foreign ownership (%)

SET Index

SET total foreign ownership (%) (RHS)

Sep-14

Jan-14

May-14

Sep-13

Jan-13

May-13

Sep-12

Jan-12

May-12

Sep-11

Jan-11

May-11

Sep-10

Jan-10

May-10

Sep-09

Jan-09

30
May-09

31

200
Sep-08

400

Jan-08

32

May-08

600

Sep-07

33

Jan-07

34

800

May-07

1,000

Sep-06

35

Jan-06

36

1,200

May-06

1,400

Sep-05

37

Jan-05

38

1,600

May-05

1,800

SET Index (LHS)

SOURCES: CIMB, COMPANY REPORTS

31

Navigating Thailand2015
December 12, 2014

Figure 56: Low participation from foreign investors


Net Buy/Sell (Btmn)

SET Index

60000

1800
1600

40000

1400

20000
1200
0

1000
800

-20000

600
-40000
400
-60000

200

Foreign Investors(LHS)

Nov-14

Jul-14

Sep-14

May-14

Jan-14

Mar-14

Nov-13

Jul-13

Sep-13

May-13

Jan-13

Mar-13

Nov-12

Jul-12

Sep-12

May-12

Jan-12

Mar-12

Nov-11

Jul-11

Sep-11

May-11

Jan-11

Mar-11

Nov-10

Jul-10

Sep-10

May-10

Jan-10

Mar-10

-80000

SET Index (RHS)

SOURCES: CIMB, COMPANY REPORTS

Figure 57: Foreign holdings by sector


100%
90%
80%
70%
60%
50%
40%
30%
20%
10%

Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Nov-14

0%

BANK

30.9%

ENERG 13.6%

PROF

13.6%

ICT

13.6%

PERSON 13.6%

OTHER 13.6%

SOURCES: CIMB, COMPANY REPORTS

Figure 58: Local institutions supporting the market


Net Buy/Sell (Btmn)

SET Index

40000

1800
1600

30000

1400

20000
1200
10000

1000
800

600
-10000
400
-20000

200

Local Institutes(LHS)

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

Nov-13

Sep-13

Jul-13

May-13

Mar-13

Jan-13

Nov-12

Sep-12

Jul-12

May-12

Mar-12

Jan-12

Nov-11

Sep-11

Jul-11

May-11

Mar-11

Jan-11

Nov-10

Sep-10

Jul-10

May-10

Jan-10

0
Mar-10

-30000

SET Index (RHS)

SOURCES: CIMB, COMPANY REPORTS

32

Navigating Thailand2015
December 12, 2014

Figure 59: Retail investors still selling (THB m)


Net Buy/Sell

Figure 60: Brokers' proprietary desks enjoy punting (THB m)


Net Buy/Sell

SET

60000

1800

50000

1600

SET

Title:
Source:

15000

1800
1600

10000

40000

1400

1400

Please fill in the values above to have them entered in your rep

30000
1200

20000

5000

1200

1000

10000

1000
0

800

-10000

800

600

-5000

600

-20000
400

-30000

400
-10000

Local Investors(LHS)

200
-15000

SET Index (RHS)

Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14

200

-50000

Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14

-40000

ProprietaryTrading(LHS)

SOURCES: CIMB, COMPANY REPORTS

SET Index (RHS)

SOURCES: CIMB, COMPANY REPORTS

Figure 61: Market activities by type of investors

2014

Local Institutes
10%

Foreign Investors
22%

Local Investors
59%

Local Institutes

ProprietaryTrading
9%

ProprietaryTrading

Foreign Investors

Local Investors

SOURCES: CIMB, COMPANY REPORTS

Selling pressure from local institutions could come from the redemptions of
Long-term Equity Fund (LTF) and Retirement Mutual Fund (RMF). Thais can
reduce their taxable income if they invest in LTF and RMF, up to 15% of their
taxable income or a maximum of THB0.5m for each fund. For LTF funds,
investors can redeem their investment after holding these funds for five
calendar years. And the investment must be in equity. We estimate that there
are normally inflows of about THB25bn into LTF funds annually.
For RMF, the amount that a person can invest to enjoy tax deductions is
calculated after taking into account the amount he/she invests in a provident
fund. Unlike LTF funds, RMF funds can be invested in equity or fixed income,
but they can only be redeemed after the investor reaches the age of 55. We
calculate that there are inflows of about THB10bn into RMF funds annually,
one quarter of which is likely to be invested in equity, with the remaining in
fixed income.
The strong market rally in 2014 could lead to big redemptions by LTF holders
in Jan 15, similar to what happened in 2012 and 2013 when the SET index rose
36% in 2012. Although the market was flat in 2011, it jumped 12% in 4Q11
33

Navigating Thailand2015
December 12, 2014

which led to big redemptions of LTF funds in Jan 12, in our opinion. We believe
that this could trigger negative sentiments in the market. And once the market
sentiment turns sour, we believe that it is more difficult to turn it around as the
junta government's performance so far has not been very impressive, especially
on the economic front. Therefore, we would not rush into the market at this
point in time.

Figure 62: Expect THB10bn redemptions for LTF in Jan 2015


1800

25,000

1600

20,000

1400

15,000

1200

10,000

1000
5,000
800
-

600

-5,000

400

-10,000
-15,000
Sep-14

Jan-14

May-14

Sep-13

Jan-13

May-13

Sep-12

Jan-12

May-12

Sep-11

Jan-11

LTF flows (THB m)

May-11

Sep-10

Jan-10

May-10

Jan-09

May-09

Sep-08

Jan-08

May-08

Sep-07

Jan-07

May-07

Sep-06

Jan-06

May-06

Sep-05

Jan-05

May-05

Sep-09

Big redemption

200

SET index

SOURCES: CIMB, COMPANY REPORTS

Figure 63: Redemptions for RMF could be smaller, at about THB1bn


14,000

1800

12,000

1600

10,000

1400

8,000

1200

6,000
1000
4,000
800
2,000
Sep-14

May-14

Jan-14

Sep-13

May-13

Jan-13

Sep-12

May-12

Jan-12

Sep-11

May-11

Jan-11

Sep-10

May-10

Jan-10

Sep-09

May-09

Jan-09

Sep-08

May-08

Jan-08

Sep-07

May-07

Jan-07

Sep-06

May-06

Jan-06

Sep-05

Jan-05

-2,000

May-05

600

400

-4,000

200

-6,000

0
RMF flows (THB m)

SET Index

SOURCES: CIMB, COMPANY REPORTS

34

Navigating Thailand2015
December 12, 2014

5. VALUATION AND RECOMMENDATIONS


5.1 Remain cautious with an unchanged 1,610 index target by
end-2015
Despite the disappointing corporate earnings performance in 2Q14 and 3Q14,
the market seems to have shrugged off the poor results and expects a V-shaped
recovery in 2015 with a market consensus EPS growth of 18%. We believe that
the 2015 earnings growth forecast will be revised down significantly to
single-digit growth.
Given the weak economic outlook, we believe that there will be more consensus
earnings downgrades, especially for CY15. Therefore, we do not think that the
current market level is sustainable. Certain investors think that the ample
liquidity will support the market but Figure 53 shows that foreign inflows into
the bond market have dried up.
We remain cautious on the market with an unchanged end-2015 index target of
1,610, based on 12.1x CY16 P/E (5-year historical average). Our regional
strategist, Mr Jason Todd, maintains his Underweight call on Thailand.
Figure 64: SET valuations
SET

CY2012

CY2013

CY2014

CY2015

CY2016

15.2x
15.1x
11%
17%
2.4x
3.2%
9.0x
47.7x
49.4x
35.2%
17.1%
1,392

13.5x
13.5x
5%
2%
2.1x
3.6%
8.8x
32.3x
115.0x
38.2%
15.7%
1,299

16.1x
16.1x
3%
6%
2.4x
3.0%
9.8x
34.6x
20.8x
33.0%
15.5%
1,594
1.03

13.6x
13.6x
19%
20%
2.2x
3.5%
8.5x
19.4x
14.6x
27.1%
16.8%
1,594
1.05

12.1x
12.1x
12%
12%
2.0x
3.9%
7.8x
13.4x
10.2x
20.5%
17.1%
1,594
1.04

Core P/E (x)


FD Core P/E (x)
Core EPS growth (%)
Core Net Profit Growth (%)
P/BV (x)
Dividend yield (%)
EV/EBITDA (x)
P/FCF (x, equity)
P/FCF (x, firm)
Net gearing (%)
ROE (%, recurring)
SET level
CIMB/consensus (x)

SOURCES: CIMB Research

Figure 65: SET's forward P/E band


20.0
18.0

+2SD : 17.0

16.0

+1SD : 14.5
14.0

Mean : 12.1
12.0

-1SD : 9.6
10.0

-2SD : 7.2

8.0
6.0
4.0
Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

12M Fwd Core P/E

SOURCES: CIMB, COMPANY REPORTS

35

Navigating Thailand2015
December 12, 2014

Figure 66: Core P/E (x)

Figure 67: Core EPS growth (%)

2013

2014

2015

2016

2013

2014

2015

2016

SET

16.6x

16.2x

13.6x

12.1x

SET

4.8%

2.5%

19.1%

12.3%

KLCI

17.5x

17.4x

16.1x

14.7x

KLCI

-2.8%

0.7%

8.1%

9.5%

FSSTI

15.4x

14.4x

13.5x

12.4x

FSSTI

-2.4%

6.8%

6.4%

9.2%

JCI

18.3x

17.4x

15.3x

13.5x

JCI

4.9%

4.9%

14.1%

13.5%

SOURCES: CIMB, COMPANY REPORTS

Figure 68: P/BV (x)

SOURCES: CIMB, COMPANY REPORTS

Figure 69: Recurring ROE (%)


2013

2014

2015

2016

2013

2014

2015

2016

SET

2.6x

2.4x

2.2x

2.0x

SET

15.7%

15.5%

16.8%

17.1%

KLCI

2.3x

2.2x

2.1x

2.0x

KLCI

13.3%

13.0%

13.6%

14.2%

FSSTI

1.5x

1.3x

1.3x

1.2x

FSSTI

9.5%

9.4%

9.6%

10.0%

JCI

3.4x

3.1x

2.8x

2.4x

JCI

17.9%

19.0%

19.2%

19.2%

SOURCES: CIMB, COMPANY REPORTS

SOURCES: CIMB, COMPANY REPORTS

Figure 70: SET's P/E relative to peers


20.0

20%

18.0

10%

16.0
0%

14.0
12.0

-10%

10.0
-20%

8.0
6.0

-30%

4.0

-40%

1-Jun-14

1-Nov-14

1-Jan-14

1-Aug-13

1-Oct-12

-50%

1-Mar-13

1-May-12

1-Jul-11

1-Dec-11

1-Feb-11

1-Apr-10

Forward P/E Premium/(discount) to peers

1-Sep-10

1-Jun-09

1-Nov-09

1-Jan-09

1-Aug-08

1-Oct-07

1-Mar-08

1-May-07

1-Jul-06

1-Dec-06

1-Feb-06

1-Apr-05

1-Sep-05

1-Jun-04

Forward P/E SET

1-Nov-04

1-Jan-04

1-Aug-03

1-Oct-02

1-Dec-01

1-May-02

1-Mar-03

2.0

Forward P/E Average discount

SOURCES: CIMB, COMPANY REPORTS

36

Navigating Thailand2015
December 12, 2014

5.2 Sector allocation strategy


Our model portfolio has outperformed the SET 50 index marginally, but has
underperformed the SET index slightly due to the strong rally for small-cap
high beta stocks.
Figure 71: Our model portfolio performance
Total Return (%) - (YTD)
30
25

20
15
10
5
0
-5
-10
31-Dec

31-Jan

28-Feb

31-Mar

30-Apr
CIMBKP

31-May

30-Jun
SET

31-Jul

31-Aug

30-Sep

31-Oct

SET50

SOURCES: CIMB, COMPANY REPORTS

We prefer sectors that are less exposed to domestic demand (hotels) as well as
defensive counters (healthcare, utilities and alternative energy). Our top picks
are AOT, BGH, GUNKUL, KCE, MINT, RATCH and THCOM.
However, as some of them may have spiked up significantly of late such as AOT
and GUNKUL, we would prefer to wait and buy on any share price weakness in
a market correction.
We are massively Underweight on the retail, telco and media sectors as we
believe that retail and media will be affected directly by weak domestic demand
on the back of higher retail energy prices, introduction of a new inheritance tax,
potentially higher VAT and weak farm prices.
For telcos, we are less confident that the 1800 MHz licences will be auctioned
off in Jul 15, as it seems that the military government would like to take the
authority to issue the licences back from the National Broadcasting and
Telecommunications Commission (NBTC). Therefore, this could mean further
delays for the auctions. The NBTC's intention to proceed with the spectrum
auctions are not aligned with the military government's digital economy policy,
implying that there are uncertainties regarding the spectrum auction. Note that
the visibility of the spectrum auction is the key swing factor in determining the
mobile operators' share prices in 2015. Meanwhile, we think that there is a
brighter earnings outlook for the non-mobile space, including satellite and fixed
broadband. For the satellite space, the key positive factor is the still tight supply
that is fuelled by rising demand for TV broadcasting channels, especially those
of high-definition (HD) quality. Fixed broadband demand will remain strong in
FY15 on the back of asymmetric digital subscriber line (ADSL) to fibre-to-the-x
(FTTx) service upgrades and greater ADSL penetration in untapped provincial
areas.

37

Navigating Thailand2015
December 12, 2014

Figure 72: Sector allocation strategy (20 Nov 2014)


Weighting in SET

Rec. Weighting

Hotel

1.3%

2.5%

124

OW

Healthcare

3.0%

4.0%

98

OW

Utilities

1.7%

2.6%

92

OW

Petrochem

6.4%

7.2%

78

OW

Alternative Energy

0.9%

1.5%

60

OW

Technology

0.9%

1.4%

54

OW

Transportation

4.2%

4.5%

34

OW

Property

4.4%

4.8%

33

OW

Mining

0.5%

0.8%

27

OW

Construction

0.9%

1.0%

14

Food

0.6%

0.7%

Auto

0.2%

0.2%

(1)

UW

Construction Materials

OW/UW (ppt)

OW/UW

0.1%

0.0%

(12)

UW

12.2%

12.0%

(22)

UW

0.3%

0.0%

(29)

UW

17.1%

16.3%

(78)

UW

1.4%

0.2%

(109)

UW

10.9%

9.5%

(142)

UW

Retail

4.8%

2.6%

(227)

UW

Total

71.7%

71.7%

Oil & Gas


Agro
Banking
Media
Telecom

SOURCES: CIMB, COMPANY REPORTS

5.3 Top picks


Airports of Thailand (AOT, Add, TP: THB258)

Most major airlines that use Thailand as their base still have ambitious fleet
expansion plans.

AOT looks attractively priced, at an EV/EBITDA discount of 10% or more


to its peers.

The anticipated rebound in tourist arrivals in 2015 should catalyse its share
price.
Figure 73: Airport of Thailands (AOT) financial summary
Dec-12A

Dec-13A

Dec-14F

Dec-15F

Dec-15F

Revenue (THB m)

30,405

36,810

38,001

43,833

49,026

Operating EBITDA (THB m)

15,325

19,839

20,917

25,139

28,718

Operating EBITDA margin

50.4%

53.9%

55.0%

57.4%

58.6%

Net profit (THB m)

6,500

16,347

12,071

15,215

17,374

Core EPS (THB)

4.57

7.98

8.45

10.65

12.16

Core EPS growth

80.7%

74.6%

5.8%

26.0%

14.2%

FD Core P/E (x)

22.86

60.80

34.82

32.90

26.10

DPS (THB)

1.80

4.60

3.30

4.20

4.80

Dividend yield

0.6%

1.7%

1.2%

1.5%

1.7%

27.54

20.15

19.23

16.72

15.00

67.0

61.2

161.0

(29.4)

(90.4)

31.9%

2.7%

5.0%

21.4%

28.1%

8.7%

13.5%

12.8%

14.9%

15.3%

0%

0%

1.01

EV/EBITDA (x)
P/FCFE
Net gearing
Recurring ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

1.00

SOURCES: CIMB, COMPANY REPORTS

Bangkok Dusit Medical (BGH, Add, TP: THB23.80)

Prime beneficiary of regional integration under the ASEAN Economic


Community (AEC) at end-2015, as patients from the neighbouring
countries are able to cross borders more easily to seek medical treatment in
Thailand.

38

Navigating Thailand2015
December 12, 2014

BGHs strong network expansion strategy and good execution track record
will support its long-term earnings growth.

BGHs valuation is more attractive than its smaller peers. Our target price is
THB23.8, still based on 34x forward P/E (1.5 s.d. above the 5-year
historical mean).
Figure 74: Bangkok Dusit Medical's (BGH) financial summary
Dec-12A

Dec-13A

Dec-14F

Dec-15F

Dec-15F

Revenue (THB m)

45,478

50,615

56,922

64,580

73,072

Operating EBITDA (THB m)

10,221

10,334

11,748

13,403

15,290

Operating EBITDA margin

22.5%

20.4%

20.6%

20.8%

20.9%

Net profit (THB m)

7,849

6,261

7,732

9,184

10,768

Core EPS (THB)

0.41

0.40

0.50

0.59

0.70

Core EPS growth

38.2%

-1.5%

23.3%

18.7%

17.2%

FD Core P/E (x)

26.61

44.99

45.69

37.04

31.20

DPS (THB)

0.18

0.20

0.20

0.25

0.30

Dividend yield

1.0%

1.1%

1.1%

1.3%

1.6%

EV/EBITDA (x)

29.76

29.72

26.36

23.21

20.41

P/FCFE

121.0

107.0

91.0

77.7

58.1

Net gearing

41.8%

43.7%

44.3%

42.6%

39.8%

Recurring ROE

17.6%

16.2%

18.0%

19.2%

20.1%

0%

0%

0%

1.06

1.05

1.06

% Change In Core EPS Estimates


CIMB/consensus EPS (x)

SOURCES: CIMB, COMPANY REPORTS

Gunkul Engineering (GUNKUL, Add, TP: THB32.0)

Gunkul has recurring income from two large 60mw wind farm projects in
2015-16 for both engineering, procurement and construction (EPC) and
operations. This will account for an estimated 80% of its earnings by 2017.

The company also has ongoing Myanmar power projects and is one of the
first Thai firms to successfully secure projects in Myanmar. This should
provide earnings growth potential.

Gunkul does not face downside risks from dilution, thanks to its clean
balance sheet. We raised our target price from THB29.5 to THB32 as we
rollover our valuation to 2016.

Figure 75: Gunkul Engineering's (GUNKUL) financial summary


Dec-12A
Revenue (THB m)
Operating EBITDA (THB m)
Operating EBITDA margin
Net profit (THB m)

Dec-14F

Dec-15F

Dec-15F

4,306

Dec-13A
2,025

3,121

4,653

5,212

746

131

508

800

1,366

17.3%

6.5%

16.3%

17.2%

26.2%

780

883

602

729

979

1.09

0.43

0.78

0.82

1.10

Core EPS growth

383.9%

-60.4%

79.9%

5.4%

34.3%

FD Core P/E (x)

27.49

69.48

38.63

36.64

27.28

DPS (THB)

0.07

0.05

0.08

0.16

0.28

Dividend yield

0.2%

0.2%

0.3%

0.5%

0.9%

30.66

155.97

38.56

29.04

19.43

Core EPS (THB)

EV/EBITDA (x)
P/FCFE

7,606.9

(32.6)

5.2

(12.4)

(32.3)

Net gearing

129.2%

12.6%

-11.3%

72.9%

127.4%

28.9%

9.8%

18.5%

18.4%

20.9%

0%

0%

1.20

1.00

Recurring ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

0.74

SOURCES: CIMB, COMPANY REPORTS

39

Navigating Thailand2015
December 12, 2014

KCE Electronics (KCE, Add, TP: THB45.00)

There is strong demand for automotive printed circuit boards (PCB), driven
by the rising trend of the adoption of more electronics in cars to increase
efficiency by reducing fuel consumption, pollution and weight.

KCEs new factory in Lad Krabang will start operations in 1Q15. The plant is
equipped with new machines that could reduce the cost of PCB production
in the long term.

KCE has exceptional gross margins compared to the other PCB makers. The
company plans to expand its current market share of 6% via cost
competitiveness.

It is the cheapest stock in Thailands electronics sector, in terms of P/E


valuation. KCE trades at 11.6x FY15 P/E, compared to Delta Electronicss
(DELTA) 14.5x and Hana Microelectronicss (HANA) 14.5x. Our target
price of THB45.00 is based on 12.5x FY15 P/E (two s.d. above the industry
mean).

Figure 76: KCE Electronics's (KCE) financial summary


Dec-12A
Revenue (THB m)
Operating EBITDA (THB m)
Operating EBITDA margin
Net profit (THB m)

Dec-14F

Dec-15F

Dec-15F

6,478

Dec-13A
9,294

11,036

13,051

14,477

658

1,681

2,351

2,785

3,336

10.2%

18.1%

21.3%

21.3%

23.0%
2,587

643

1,173

1,780

2,090

1.38

2.49

3.43

3.75

4.64

Core EPS growth

378.3%

80.2%

37.9%

9.2%

23.8%

FD Core P/E (x)

8.41

Core EPS (THB)

28.25

15.68

11.37

10.41

DPS (THB)

0.55

0.75

0.85

1.00

1.10

Dividend yield

1.4%

1.9%

2.2%

2.6%

2.8%

40.22

15.33

11.06

9.09

7.24

27.2

(129.7)

17.7

51.3

15.3

166.3%

108.2%

77.2%

52.0%

28.6%

23.3%

33.1%

35.7%

31.5%

30.8%

0%

0%

0%

1.10

1.03

1.08

EV/EBITDA (x)
P/FCFE
Net gearing
Recurring ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

SOURCES: CIMB, COMPANY REPORTS

Minor International (MINT, Add, TP: THB42.00)

MINTs diversified business units, geographical spread and strategies


should lessen the impact of any event risks in Thailand or overseas. It also
stands to benefit handsomely from the recovery in tourist arrivals in
Thailand next year.

The aggressive expansion of the food and hotel businesses will allow
MINTs bottomline to increase by more than 20% p.a. over the next few
years.

MINTs current valuation is still attractive. Our target price of THB42.00 is


based on 24x CY16 P/E (1 s.d. above the 5-year historical mean).

40

Navigating Thailand2015
December 12, 2014

Figure 77: Minor International's (MINT) financial summary


Dec-11A

Dec-12A

Dec-13A

Dec-14F

Dec-15F

Dec-15F

26,220

31,310

34,678

39,243

47,239

54,320

Operating EBITDA (THB m)

4,089

5,406

6,090

6,519

8,132

9,667

Operating EBITDA margin

15.6%

17.3%

17.6%

16.6%

17.2%

17.8%

Net profit (THB m)

7,021

Revenue (THB m)

2,880

3,243

4,101

4,524

5,753

Core EPS (THB)

0.56

0.93

1.07

1.13

1.44

1.75

Core EPS growth

46.5%

66.8%

14.5%

6.0%

27.2%

22.0%

FD Core P/E (x)

20.38

63.99

38.37

33.51

31.62

24.86

DPS (THB)

0.15

0.28

0.34

0.37

0.47

0.58

Dividend yield

0.4%

0.8%

0.9%

1.0%

1.3%

1.6%

EV/EBITDA (x)

37.87

29.17

25.04

23.37

18.61

15.51

P/FCFE

204.1

82.5

(44.5)

106.9

82.7

64.6

109.2%

95.0%

60.3%

54.5%

46.3%

38.2%

13.4%

20.1%

19.1%

17.0%

19.1%

20.5%

0%

0%

0%

1.01

1.04

1.10

Net gearing
Recurring ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

SOURCES: CIMB, COMPANY REPORTS

Ratchaburi Electricity (RATCH, Add, TP: THB65.00)

We project solid core net profit growth of over 20% in FY14-16 for RATCH,
driven by the additional capacity of 750MW (13%) for its 40% stake in the
Hongsa coal-fired power plant in FY15-16.

There is further earnings growth potential from potential acquisitions in


Thailand, Australia and Japan (ongoing negotiations). We estimate that
these transactions could result in RATCHs total capacity rising 10-30%
over the next few years.

Its valuation remains attractive, at 11x CY15 P/E and 9x CY16 P/E,
compared to its peers 13x CY15 P/E.

Figure 78: Ratchaburi Electricity's (RATCH) financial summary


Dec-12A

Dec-13A

Dec-14F

Dec-15F

Dec-15F

Revenue (THB m)

55,591

50,850

56,382

55,681

55,387

Operating EBITDA (THB m)

10,302

9,484

11,320

10,655

11,285

Operating EBITDA margin

18.5%

18.7%

20.1%

19.1%

20.4%

Net profit (THB m)

7,726

6,187

6,780

7,369

9,436

Core EPS (THB)

3.68

3.50

4.68

5.08

6.51

Core EPS growth

9.8%

-5.1%

33.7%

8.7%

28.0%
9.49

FD Core P/E (x)

16.76

17.66

13.21

12.15

DPS (THB)

2.27

2.27

2.27

2.40

2.80

Dividend yield

3.7%

3.7%

3.7%

3.9%

4.5%

10.50

10.91

8.55

8.44

7.24

50.1

(77.6)

9.1

8.9

7.5

Net gearing

33.3%

23.5%

10.5%

-1.1%

-13.2%

Recurring ROE

10.6%

9.4%

12.0%

12.2%

14.5%

0%

0%

0%

0.99

1.07

1.23

EV/EBITDA (x)
P/FCFE

% Change In Core EPS Estimates


CIMB/consensus EPS (x)

SOURCES: CIMB, COMPANY REPORTS

Thaicom (THCOM, Add, TP: THB52)

Thaicom 6 is expected to boost Thaicoms FY15 earnings. Thaicom 6 has


been in operation since 2Q14 and we forecast that the utilisation uptake
will increase to the presales level of 68% in 3Q14. This implies that there
will be volume growth and margin expansion from this project in FY15.

Thaicom 7, which was launched in early-Sep 2014, is expected to post a


utilisation rate of 55% in FY15. This indicates that this project will provide
volume growth and margin expansion in FY15.
41

Navigating Thailand2015
December 12, 2014

The concerns about the military governments investigation into Thaicoms


concession irregularities and proposed national satellite project are not new.
The junta government in 2007-08 carried out similar actions, but to no
avail. Therefore, we view its share price weakness as a buying opportunity.

Figure 79: Thaicoms (THCOM) financial summary

Revenue (THBm)
Operating EBITDA (THBm)
Operating EBITDA Margin
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
7,266
3,892
53.6%
174
0.40
NA
94.78
0.40
1.06%
11.78
NA
34.4%
3.1%

Dec-13A
7,896
3,750
47.5%
1,128
1.14
186%
33.18
0.45
1.19%
12.04
NA
31.5%
8.4%

Dec-14F
9,769
5,198
53.2%
1,723
1.70
49%
22.24
0.85
2.25%
7.93
NA
7.0%
11.5%
(0.000%)
0.97

Dec-15F
10,832
5,813
53.7%
2,524
2.30
36%
16.39
1.73
4.58%
6.39
10.39
(14.6%)
14.3%
0.000%
1.11

Dec-16F
11,287
5,916
52.4%
2,666
2.43
6%
15.52
1.82
4.83%
5.72
9.93
(30.1%)
14.1%
0.000%
1.03

SOURCES: CIMB, COMPANY REPORTS

42

Navigating Thailand2015
December 12, 2014

Sector Briefs

43

Financial ServicesBanks
December 12, 2014

THAILAND

CIMB Analyst(s)

BANKS

Back to basics
The Thai banking sector has passed its peak growth stage and is now
rebalancing in the face of macro headwinds. The positives include
decent balance sheets and conservative credit costs. The sector's
outperformance will not continue given the lack of new solid drivers.

Weerapat WONK-URAI
T (66) 2 657 9224
E weerapat.wo@cimb.com

Figure 1: Thai GDP growth and loan growth


20.0%
13.8%

15.0%

10.4%
Show Style "View Doc Map"

8.3%

10.0%
3.8%
5.0%

Highlighted Companies
Kasikornbank
It is our top pick given its outstanding growth and
strong balance sheet. Its risk-reward trade-off is
convincing, coupled with its high ROEs. Its rich
valuation is justified by its stronger-than-peer
performance.
Krung Thai Bank
Its valuation discount to its peers should diminish
given that KTB has bolstered its LLR cushion and
capital base. Significant catalysts could emerge from
a successful transformation programme to boost fee
income.

0.0%
2014F2015F
-5.0%
-10.0%

-15.0%
GDP growth

Sector loan growth

SOURCES: CIMB, BANK OF THAILAND

We keep our Neutral stance on the


sector while our top picks are KBANK
and KTB. Public investments from
government spending will be the only
catalyst for FY15 loan growth.
Meanwhile, our Hold calls are
unchanged for BBL and SCB. The
sector valuations of 1.4x P/BV and
9.2x P/E for FY15 fairly reflect its
slowing earnings growth in FY15.

Hope placed on government

We expect to see accelerated


government investments at the
beginning FY15 to stimulate the loan
demand of large corporates and SMEs.
But we think that this cannot be called
a new investment cycle given that
other private investments remain
subdued.
Thailands
capacity
utilisation rate has not been rising
whereas household debt will need at
Normalised growth in FY15
least two years to deleverage.
We forecast Thai banks loan growth Nevertheless, we expect the sectors
to come in at 8.3% in FY15, on the credit cost to gradually fall 2bp to
back of an expected 3.3% GDP growth. 70bp in FY15, thanks to efforts to
Domestic consumption will not be build up a high loan-loss-reserve
lively in the absence of populist cushion in the recent years. The NPL
policies, resulting in weak consumer ratio will stabilise but tight credit
loan demand. On top of that, control is here to stay.
household spending is still depressed
given their high financial burden. Waiting for new catalysts
upside
and
valuation
Thus, our 10% non-interest-income Further
re-rating
should
be
catalysed
by an
growth will be driven mainly by
improving
macro
picture.
We
have
corporate-lending
activities
and
capital market-led businesses. We Add ratings for KBANK and KTB
think that fierce deposit competition which could benefit from an expected
is not likely in FY15 due mainly to economic recovery in FY15.
softened credit demand. Thus, we
forecast a flattish NIM of 2.9%.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

BanksThailand
December 12, 2014

Figure 2: Sector Comparisons


Company
DBS Group
OCBC
United Overseas Bank
Singapore average

Bloomberg
Ticker
DBS SP
OCBC SP
UOB SP

Recom.
Add
Add
Hold

Price Target Price


(local curr)
(local curr)
20.00
20.50
10.43
11.44
24.68
23.79

Market Cap
(US$ m)
37,696
31,664
30,113

Core P/E (x)


CY2014 CY2015
11.9
11.8
11.2
10.4
12.2
11.5
11.8
11.3

3-year EPS
CAGR (%)
6.9%
9.6%
7.3%
10.3%

P/BV (x)
CY2014 CY2015
1.34
1.27
1.35
1.25
1.49
1.37
1.39
1.29

Recurring ROE (%)


CY2014 CY2015 CY2016
11.6%
11.0%
11.6%
12.4%
12.4%
12.3%
12.6%
12.4%
12.5%
12.1%
11.9%
12.1%

P/PPOPS (x)
Dividend Yield (%)
CY2014 CY2015 CY2014 CY2015
9.2
8.6
3.0%
3.3%
7.6
7.9
3.4%
3.5%
9.1
8.6
3.5%
3.7%
8.6
8.3
3.3%
3.5%

Agricultural Bank of China


Bank of China
Bank of Communications
China CITIC Bank
China Construction Bank
China Merchants Bank
China Minsheng Bank
ICBC
Hong Kong average

1288 HK
3988 HK
3328 HK
998 HK
939 HK
3968 HK
1988 HK
1398 HK

Add
Add
Add
Hold
Add
Reduce
Reduce
Add

3.75
4.16
6.81
5.88
6.11
16.92
9.24
5.36

4.96
5.03
7.41
4.93
9.43
11.38
6.17
7.55

162,470
152,414
67,366
44,816
198,261
57,184
46,185
244,324

5.1
5.5
6.4
5.7
5.1
6.0
5.0
5.3
5.4

4.4
4.6
6.6
4.6
4.4
5.1
5.0
4.8
4.7

15.9%
15.2%
5.6%
9.6%
13.7%
9.8%
5.5%
9.3%
12.5%

0.99
0.89
0.87
0.87
0.99
1.10
0.98
1.03
0.97

0.86
0.79
0.79
0.76
0.86
0.94
0.83
0.90
0.85

21.2%
17.4%
14.3%
16.2%
20.8%
19.3%
20.5%
20.7%
19.4%

21.1%
18.2%
12.4%
17.5%
20.7%
19.1%
18.2%
19.8%
19.2%

21.1%
19.0%
13.5%
16.8%
20.6%
19.0%
18.1%
19.2%
19.2%

3.2
3.3
3.9
3.0
3.4
3.2
2.9
3.6
3.4

2.8
2.9
3.6
2.8
2.9
3.0
2.9
3.1
3.0

6.8%
6.4%
4.1%
4.4%
6.8%
3.2%
1.8%
6.6%
6.0%

7.9%
7.6%
3.9%
5.4%
7.9%
3.8%
2.0%
7.3%
6.8%

Bank Bukopin
Bank Central Asia
Bank Danamon
Bank Mandiri
Bank Negara Indonesia
Bank Panin
Bank Rakyat Indonesia
Bank Tabungan Negara
Bank Tabungan Pensiunan
Indonesia average

BBKP IJ
BBCA IJ
BDMN IJ
BMRI IJ
BBNI IJ
PNBN IJ
BBRI IJ
BBTN IJ
BTPN IJ

Outperform
Hold
Reduce
Add
Add
Hold
Add
Add
Add

760.0
13,300
4,500
10,775
6,025
1,145
11,550
1,170
4,170

1,300
13,950
3,675
11,750
6,800
1,220
13,000
1,300
4,625

560
26,577
3,496
20,377
9,107
2,235
23,094
1,002
1,974

4.9
20.1
15.6
13.8
11.2
10.7
13.1
12.0
12.1
14.3

3.9
17.1
14.0
12.2
10.1
9.9
11.3
10.0
10.4
12.5

na
11.6%
-8.2%
6.1%
7.8%
8.8%
9.4%
-6.7%
4.9%
4.2%

0.91
4.22
1.30
2.44
2.04
1.30
2.97
1.02
2.04
2.60

0.77
3.50
1.22
2.11
1.77
1.15
2.46
0.95
1.70
2.23

19.9%
23.1%
8.6%
19.0%
19.5%
12.5%
25.0%
8.4%
18.1%
19.6%

21.4%
22.3%
9.0%
18.5%
18.7%
12.4%
23.9%
9.8%
17.7%
19.3%

na
21.8%
9.7%
18.2%
18.3%
12.9%
23.6%
10.8%
17.4%
16.6%

3.3
14.2
5.7
8.0
6.6
6.2
8.0
6.0
7.0
8.6

2.6
12.8
5.3
7.0
6.0
5.7
7.0
5.0
6.2
7.6

5.0%
0.9%
2.4%
2.2%
2.4%
0.0%
2.2%
3.8%
0.0%
1.8%

6.1%
1.1%
2.0%
2.3%
2.7%
0.0%
2.4%
2.5%
0.0%
1.9%

AHB MK
AFG MK
AMM MK
BIMB MK
HLBK MK
MAY MK
PBK MK
RHBC MK

Reduce
Hold
Hold
Hold
Reduce
Add
Reduce
Add

3.15
4.75
6.45
4.22
14.30
8.90
18.32
7.60

2.87
4.98
6.70
4.50
13.20
12.50
17.60
11.60

1,758
2,113
5,585
1,811
7,390
23,828
20,324
5,617

10.2
11.9
11.2
10.6
12.0
12.2
15.4
9.5
12.4

9.9
10.6
10.6
11.7
11.0
11.3
14.3
8.4
11.5

-9.7%
8.7%
2.9%
15.6%
8.0%
0.4%
4.1%
10.3%
5.9%

0.91
1.64
1.40
1.44
1.76
1.56
2.61
1.08
1.67

0.87
1.53
1.30
1.34
1.59
1.42
2.78
0.98
1.58

8.2%
14.6%
13.1%
14.5%
15.5%
13.8%
18.7%
11.6%
14.3%

9.0%
15.0%
12.8%
11.9%
15.4%
13.1%
18.8%
12.3%
14.1%

9.1%
15.3%
13.1%
11.9%
14.9%
13.0%
19.9%
12.3%
14.2%

7.3
9.1
7.6
6.2
10.9
8.2
10.9
5.9
8.7

7.0
8.1
7.1
6.8
9.6
7.8
10.1
5.4
8.1

4.8%
5.5%
4.0%
3.5%
2.9%
5.7%
2.8%
3.0%
4.1%

4.8%
5.7%
4.1%
3.9%
3.0%
6.2%
3.1%
3.4%
4.4%

BPI PM
MBT PM
PBB PM

Reduce
Hold
Add

93.50
82.55
18.70

75.00
86.00
27.00

8,226
5,074
180

19.3
17.0
13.5
18.2

18.7
13.5
9.3
16.1

-0.1%
7.7%
-1.0%
7.0%

2.61
1.52
1.08
2.02

2.40
1.38
1.00
1.85

14.9%
9.4%
8.6%
11.9%

13.4%
10.7%
11.1%
12.0%

13.7%
11.0%
14.7%
12.4%

13.5
9.4
8.5
11.4

13.2
7.8
6.2
10.3

1.9%
0.9%
1.9%
1.5%

1.9%
0.9%
2.7%
1.6%

BBL TB
BAY TB
KBANK TB
KKP TB
KTB TB
SCB TB
TCAP TB
TISCO TB
TMB TB

Hold
Reduce
Add
Add
Add
Hold
Hold
Add
Reduce

199.5
45.25
242.0
40.25
23.60
190.0
33.00
44.25
3.08

203.0
30.00
274.0
55.00
28.00
203.0
37.00
53.00
2.50

11,600
8,372
17,641
1,033
10,047
19,644
1,213
1,079
4,098

10.7
19.3
12.5
11.4
9.7
11.9
7.8
8.5
15.7
10.2
6.3

10.0
17.5
11.4
8.1
8.8
11.3
7.2
7.5
14.5
9.2
5.6

2.7%
17.4%
8.2%
1.1%
2.2%
4.4%
-3.2%
4.9%
21.4%
14.8%
9.1%

1.20
2.11
2.31
0.93
1.45
2.32
0.78
1.39
1.99
1.60
1.10

1.11
1.74
2.00
0.88
1.32
2.06
0.72
1.25
1.83
1.42
0.97

11.6%
11.2%
19.8%
8.3%
15.9%
20.6%
10.3%
17.1%
13.2%
16.9%
18.7%

11.5%
11.8%
18.9%
11.2%
15.8%
19.3%
10.4%
17.5%
13.2%
16.3%
18.4%

11.8%
12.1%
18.1%
12.3%
16.1%
18.6%
10.7%
18.2%
14.3%
16.7%
15.2%

6.9
8.0
7.6
5.8
5.9
8.1
2.0
3.5
9.6
5.7
4.0

6.7
8.2
6.8
4.5
5.5
7.6
1.9
3.4
8.2
5.5
3.5

3.7%
1.8%
1.6%
4.3%
4.1%
3.0%
3.6%
4.5%
2.2%
3.5%
5.2%

4.0%
2.0%
1.8%
6.2%
4.5%
3.2%
3.9%
5.2%
2.4%
3.9%
5.9%

Affin Holdings
Alliance Financial Group
AMMB Holdings
BIMB Holdings
Hong Leong Bank
Malayan Banking Bhd
Public Bank Bhd
RHB Capital Bhd
Malaysia average
Bank of the Philippine Islands
Metropolitan Bank and Trust
Philippine Business Bank
Philippines average
Bangkok Bank
Bank of Ayudhya
Kasikornbank
Kiatnakin Bank
Krung Thai Bank
Siam Commercial Bank
Thanachart Capital
Tisco Financial Group
TMB Bank
Thailand average
Average (all)

SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

45

Consumer DiscretionaryConsumer Discretionary - overall


December 12, 2014

THAILAND

CIMB Analyst(s
)

Kasem Prunratanamala, CFA


T (66) 2 6579221
E kasem.prunratanamala@cimb.com
Kitichan SIRISUKARCHA, CFP
T (66) 2 657 9232
E kitichan.si@cimb.com

CONSUMER
DISCRETIONARY OVERALL

SECTOR BRIEF

Seeing a glimpse of light


2014 has been a tough year for retailers. Political problems, a weak
economy, and low consumer confidence have led to sluggish domestic
demand and disappointing results. But we believe the worst is over.
There are high hopes for a sharp rebound in 2015, though, in our view,
a U-shaped recovery can be expected, while the pace of recovery may
vary among companies and across different retail segments.
Figure 1: Weak SSSG continues through 2014
27.00
24.00
21.00
18.00

Show Style "View Doc Map"

15.00
12.00
9.00
6.00

Highlighted Companies
Robinson Department Store
Upcountry department store leader with Lifestyle
Center boosting rental income while additional
upside is sales pick-up from recovery in domestic
demand and increasing urbanisation.
CP All
Combining 7-Eleven and Makro operations, CPALL
is the largest retail operator in Thailand. Long term
growth is promising with the companys ability to
cater to the rapid changes in its customers busier
lifestyles.
Jubilee
We are positive on JUBILEs business outlook in
view of its leading position in the diamond jewelry
retail business and ability to maintain its market
share, thanks to its strong competitive advantages.

3.00
0.00
-3.00

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

-6.00

-9.00
-12.00

CPALL

ROBINS

BIGC

HMPRO

GLOBAL

SOURCES: CIMB, COMPANY REPORTS

We have a Neutral rating on the sector.


With domestic consumption expected
to gradually pick up, we prefer CPALL
and Jubilee as defensive plays, and
ROBINS for its improving earnings
quality and upside for upcountry
demand recovery.

On a recovery path
We believe the worst is over for Thai
retailers as the countrys political
situation
has
stabilised,
while
government spending should kick-in
next year. However, we do not expect
the same pace of recovery for all
retailers as they have different target
markets and product segments. We
choose CPALL as an early pick-up
play due to its focus in FMCG
products.
ROBINS,
meanwhile,
remains our favourite as the
upcountry recovery play for its leading
position in department stores in the
upcountry and improved earnings
quality though rising rental income.

Stories from small retailers


For small cap retailers under our
coverage, our top-pick is Jubilee as it
targets high purchasing power
customers, as evidenced by its
double-digit SSSG, amid the slower
consumption generally. We are more
negative on MC as we believe it will
continue to suffer from weak demand
in the upcountry. We are also not
keen on OFM at the moment due to
its rising SG&A and the likely booking
of pre-opening costs with the launch
of its e-commerce website.

Selective buy
We are still positive on the long-term
prospects of Thailands retail sector,
boosted by urbanisation in the
upcountry and room for modern trade
to expand as the market shifts from
traditional trade. However, with the
varying pace of recovery in the short
term, we recommend CPALL and
JUBILEE for their defensive nature
and ROBINS for a clear recovery path.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Consumer Discretionary - overallThailand


December 12, 2014

Figure 2: Sector comparisons


Company
Thailand
CP All
Robinson Department Store
Big C Supercentre
Siam Global House PCL
Home Product Center PCL
Jubilee Enterprise
Officemate
Mc Group
Beauty Community
Average (Thailand)
Asia
7-Eleven Malaysia Holdings Berhad
Aeon Co M Bhd
Dairy Farm Int'l
Convenience Retail Asia Ltd
President Chain Store
Taiwan FamilyMart Co Ltd/Taiwan
Seven & i Holdings Co Ltd
Lawson Inc
FamilyMart Co Ltd
Modern Internasional Tbk PT
Average (Asia)

Bloomberg
Ticker

Recom.

CPALL TB
ROBINS TB
BIGC TB
GLOBAL TB
HMPRO TB
JUBILE TB
OFM TB
MC TB
BEAUTY TB

Add
Add
Reduce

SEM MK
AEON MK
DFI SP
831 HK
2912 TT
5903 TT
3382 JT
2651 JT
8028 JT
MDRN IJ

Hold

Add
Hold
Hold
Add

Hold
Hold

Price

Target Price

Market Cap

(local curr)

(local curr)

(US$ m)

Core P/E (x)


CY2014

CY2015

P/BV (x)
3-year EPS CAGR
(%) CY2014 CY2015

Recurring ROE (%)


CY2014

CY2015

EV/EBITDA (x)
CY2014

CY2015

Dividend Yield (%)


CY2014

CY2015

42.25
44.00
253.0
11.30
8.55
36.00
49.00
14.00
33.75

54.50
66.00
212.0
12.46
9.90
42.00
54.00
17.10
37.50

11,561
1,489
6,358
1,049
3,211
191.1
477.6
341.2
308.4
24,985

32.4
24.8
29.3
42.1
31.6
26.4
31.5
15.3
34.7
29.8

21.6
18.3
25.6
31.2
27.0
19.7
25.5
13.9
26.3
23.2

22.6%
18.7%
7.1%
15.2%
12.2%
29.4%
22.1%
6.6%
29.1%
18.1%

9.6
4.0
5.0
2.7
6.5
8.7
3.2
3.0
9.7
5.8

7.8
3.6
4.4
2.5
5.8
7.4
3.0
2.9
9.2
5.2

29.8%
16.7%
18.1%
7.1%
23.2%
35.3%
10.5%
19.9%
28.3%
21%

36.0%
20.5%
18.2%
8.4%
22.7%
40.6%
12.1%
21.0%
35.8%
24%

20.4
11.1
16.2
22.3
16.9
19.5
17.2
9.8
25.2
17.6

15.7
8.3
14.6
17.4
14.5
14.3
13.7
9.0
18.7
14.0

1.5%
2.0%
1.0%
0.7%
1.5%
2.3%
1.0%
5.2%
2.4%
2.0%

2.3%
2.7%
1.2%
1.0%
1.9%
3.0%
1.2%
5.7%
3.2%
2.5%

1.43
2.98
9.16
5.00
229.5
201.5
4,295
7,170
4,460
620.0

1.78
3.35
10.60
5.20
238.0
246.6
4,856
8,015
4,423
786.3

506.7
1,199
12,385
484.4
7,641
1,441
32,196
6,082
3,685
229.6
65,850

28.3
19.7
24.5
30.5
24.4
32.5
18.9
17.1
16.3
49.6
26.2

23.1
17.8
21.8
26.8
24.9
27.8
20.4
18.2
17.5
33.7
23.2

19.0%
1.6%
9.7%
2.3%
8.3%
22.0%
-0.4%
-1.6%
-6.3%
24.3%
7.9%

9.5
2.3
8.3
4.7
11.1
9.1
1.9
3.0
1.7
2.1
5.4

7.6
2.1
7.1
4.3
10.0
7.9
1.7
2.7
1.6
2.0
4.7

48.7%
12.3%
36.5%
15.7%
43.7%
29.8%
9.7%
17.1%
10.2%
4.6%
23%

36.8%
12.5%
35.3%
16.8%
42.4%
30.5%
8.7%
15.5%
9.2%
6.1%
21%

13.0
8.5
15.1
14.9
12.2
13.1
7.0
5.1
4.6
14.2
10.8

10.2
7.8
13.8
13.0
11.4
11.3
7.6
6.1
5.5
11.6
9.8

1.1%
1.6%
2.5%
2.0%
2.6%
2.5%
1.6%
3.1%
2.3%
0.4%
2.0%

1.7%
1.8%
3.1%
2.2%
3.5%
3.1%
1.7%
3.3%
2.4%
0.5%
2.3%

SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

47

Construction and MaterialsConstruction


December 12, 2014

THAILAND

CONSTRUCTION
SECTOR BRIEF

CIMB Analyst(s)

Waiting for government projects


Progress on the launch of public infrastructure projects has been
disappointing as the government wants to reduce graft in the public
sector. Our hope is that the government will speed up the bidding
process in 2015 to revive the economy.

Kasem Prunratanamala, CFA


T (66) 2 6579221
E kasem.prunratanamala@cimb.com

Figure 1: Backlog (as of Dec 14, including North Green Line)


ITD
CK
STEC
Total/average

THB bn
265
93
57
415

Show Style "View Doc Map"

Highlighted Companies
Italian-Thai Development (ITD)
A strong order backlog, the prospect of getting more
infrastructure projects and tame building material
prices suggest bright prospects for ITD. But the real
issue is its margins and earnings visibility.
CH Karnchang (CK)
Given its good connections with the military
government, we expect CK to win more
infrastructure projects than other contractors. Its
decent order backlog also alleviates concern over
the slow progress of infrastructure launches.
Sino-Thai Engineering (STEC)
STEC has a low order backlog and is looking for
smaller projects. This would mean lower margins
and higher SG&A. It is not as close to the current
government as it was with the Democrat
administration.

years of revenues
5.5
2.6
2.2
3.8
SOURCES: CIMB, COMPANY REPORTS

Moreover, Thai contractors are not


likely to benefit much from the
medium-speed train projects that the
Thai government recently handed to
the Chinese government which is
likely to have its own contractors.
The Orange Line is expected to come
next, after the North Green Line. But
this should not surprise the market.
We keep our Neutral sector rating,
with CK as our top pick given its close
relationship with the government.

Orange after Green


MRTA has just announced the
winning bids for the THB29bn North
Green Line. ITD was the lowest bidder
for contract 1, the largest, worth
THB15bn while UNIQ won contract 2
(THB7bn) and STEC bagged contracts
3 and 4 (THB7bn). Surprisingly, CK
was not among the winners despite its
close
relationship
with
the
government.
The THB115bn Orange Line (Cultural
Centre-Min Buri) is likely to be up for
bidding in 2Q15, which could also
provide some excitement. After this
line, we believe that the other lines
may take a longer time as it seems
that the government may want to
change the design of the Yellow and
Pink lines from light rail system to
heavy rail so that they will be able to
carry more commuters and are
compatible with other projects. This
could mean a long delay for both lines

as the projects will have to start all


over again.
As for the double track rail projects,
we do not hold out much hope as it
appears that many of these projects
have not passed environmental
impact assessment (EIA) yet. It will be
a while before some of them come
through.

Medium speed trains


From our channel checks with
contractors, the project that the Thai
government is allowing the Chinese
government to build is still in the
early stage. It is not yet clear who will
invest in the project and there is no
design yet. This means that it will be
some time before construction of this
project starts.
It seems that the government has
granted the project to China for
political reasons. We think that this is
also the reason for the recent approval
of the East-West corridor to Japan.

Tame building material


prices
Given the weak global economic
outlook, we believe that building
material prices will remain benign
next year. This bodes well for
contractors margins, which are
normally very thin.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

ConstructionThailand
December 12, 2014

Figure 2: Sector comparisons


Share Price

Tgt

Mkt cap

Company

Ticker

BB
Rec.

(THB)

Price (local)

(US$ m)

CH. Karnchang

CK TB

Add

26.50

30.00

Italian-Thai Development

ITD TB

Reduce

6.05

STEC TB

Reduce

25.75

Sino-Thai Eng & Construction


Total/Average

Core P/E (x)


CY14

CY15

1,335

19.8

20.6

5.25

1,248

64.1

23.00

1,190

3-yr EPS
CAGR (%)

P/BV (x)

Recurring ROE (x)

EV/EBITDA (x)

Dividend yield (%)

CY14

CY15

CY14

CY15

CY14

CY15

CY14

CY15

-25.3%

2.4

2.2

12.6%

11.2%

20.9

21.9

1.0%

1.2%

55.9

1.1%

2.9

2.8

4.8%

5.2%

17.0

17.5

0.6%

0.6%

25.3

25.0

0.8%

4.7

4.3

19.4%

17.9%

15.3

14.6

1.9%

2.0%

36.4

33.8

-7.8%

3.3

3.1

12.3%

11.4%

17.7

18.0

1.2%

1.3%

SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

49

HealthcareHospitals
December 12, 2014

THAILAND

HOSPITALS
SECTOR BRIEF

CIMB Analyst(s)

Kasem Prunratanamala, CFA


T (66) 2 6579221
E kasem.prunratanamala@cimb.com

Booster shot from medical


tourism
We believe that the medical tourism trend will be even more
pronounced when Asian Economic Community (AEC) becomes
effective at end-15 as it will be easier for patients from neighbouring
countries to cross the borders for medical treatment in Thailand.
Figure 1: Per capita total expenditure on health at average exchange rate (US$)
250

Show Style "View Doc Map"

200
150

Highlighted Companies
Bangkok Dusit Medical Services (BGH)
BGH is on track to have 50 hospitals in a couple of
years time. Cost control will still be its priority in
2015. Together with new hospitals, we believe it will
post strong earnings growth over the next few years.
Bumrungrad Hospital (BH)
We believe BH will continue to deliver steady
earnings growth over the next few years on the back
of rising medical tourism. Its Petchburi campus will
not be up and running in the next few years.
Bangkok Chain Hospital (BCH)
Its World Medical Centre is likely to show steady
improvement, which should more than offset startup
loss from new Karunvej hospital. BCH is expected to
post decent earnings growth over the next few years.

100
50

0
2002

2003

2004
Thailand

2005

2006

2007

Cambodia

2008
Lao

2009
Myanmar

2010

2011

2012

Vietnam

SOURCES: WHO

In addition, major hospitals continue


to enjoy greater economies of scale
and rising revenue intensity. We like
the sectors defensive nature and stay
Overweight even though it has
outperformed the market massively in
2014. Strong earnings growth will
catalyse the sector performance
further. BGH is our top pick. M&As
could catalyse its share price.

More patients from CLMV


Thai hospitals have been treating
more patients from Myanmar. We
expect to see more patients from other
neighbouring countries in the near
future, especially after the AEC
becomes effective, since Burmese and
Cambodians will no longer need a visa
to visit Thailand.

Big is beautiful
BGH is expanding aggressively and is
on track to raise its network from 37
hospitals currently to 50 hospitals in
the next couple of years. There will,
therefore, be more greenfield and
brownfield hospitals in the near term.
Even though BGH is already the

largest hospital group in Thailand, its


market share is 11% for private
hospitals and 7% for the entire
country. The market is fragmented
and there should be no issue if it
acquires another big group of
hospitals.
A bigger network would allow BGH to
not only serve more patients in
various locations but would also boost
its case mix index at its hubs, thereby
improving margins, which in turn
would allow it to expand its reach.

Price to pay for expansion


It normally takes a greenfield hospital
three years to break even at the
bottomline. But with a mix of green
and brownfield hospitals and with an
already large network, absorbing a
few greenfield hospitals would not be
too painful for BGH. That said, we
still expect BGH to continue to post
19% earnings growth in FY15.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

HospitalsThailand
December 12, 2014

Figure 2: Sector Comparisons

Company

IHH Healthcare
Raffles Medical Group
KPJ Healthcare Bhd
Bangkok Chain Hospital
Bangkok Dusit Med Service
Bumrungrad Hospital
Chularat Hospital PCL
Primary Health Care
Ramsay Health Care
Sonic Healthcare
Apollo Hospitals Enterprise Ltd
Average ( Asia)

BB Ticker

IHH SP
RFMD SP
KPJ MK
BCH TB
BGH TB
BH TB
CHG TB
PRY AU
RHC AU
SHL AU
APHS IN

DaVita HealthCare Partners Inc DVA US


HCA Holdings Inc
HCA US
Laboratory Corp of America Holdings
LH US
Quest Diagnostics Inc
DGX US
Tenet Healthcare Corp
THC US
Fresenius Medical Care AG & Co FME
KGaAGR
Fresenius SE & Co KGaA
FRE GR
Rhoen Klinikum AG
RHK GR
Life Healthcare Group Holdings Ltd
LHC SJ
Mediclinic International Ltd
MDC SJ
Average (Rest of the world)
Average (all)

Recom.

Add
Add
Hold
Add
Reduce
Reduce
Add
Add
Add
Add

na
na
na
na
na
na
na
na
na
na

Price

Target
Price

(local
curr)

(local curr)

1.87
3.89
3.76
8.90
18.20
142.50
18.40
4.52
55.22
17.33
1,131.45

74.45
72.60
103.80
64.26
50.81
73.87
42.93
23.27
40.61
93.08

2.16
4.50
4.04
9.30
23.80
125.00
19.55
5.59
59.73
19.06
1,055

na
na
na
na
na
na
na
na
na
na

Market Cap
(US$ m)

Core P/E (x)


CY14

3-yr EPS
CAGR
CY15
(%)

P/BV (x)

Recurring ROE (%)

EV/EBITDA
(x)

Yield (%)

CY14

CY15

CY14

CY15

CY16

CY14

CY15

CY14

CY15

11,620
1,672
1,093
676
8,588
3,163
617
1,929
9,301
5,795
2,533

56.80
30.15
29.71
44.25
36.46
36.93
40.23
13.36
29.87
17.48
43.71
31.18

38.99
25.55
27.20
34.40
30.70
33.30
34.10
12.13
26.03
15.83
42.26
26.69

29.7%
15.9%
10.9%
6.2%
17.2%
10.2%
14.7%
1.8%
15.5%
9.9%
12.4%
11.3%

2.2
4.2
3.1
5.3
6.2
9.5
7.1
0.8
6.2
2.2
5.3
3.0

2.2
3.8
2.9
4.9
5.6
8.3
6.6
0.8
5.6
2.1
4.9
2.9

3.9%
14.7%
10.9%
12.3%
18.0%
27.4%
18.3%
6.9%
21.8%
12.8%
12.1%
9.9%

5.6%
15.7%
10.9%
14.9%
19.2%
26.5%
20.0%
6.9%
22.6%
13.5%
12.0%
11.1%

5.5%
16.1%
11.1%
16.0%
20.1%
26.8%
20.8%
7.1%
23.4%
14.3%
13.6%
11.8%

19.6
22.9
16.2
27.0
25.9
24.7
26.1
6.2
12.2
10.4
22.5
15.2

16.2
20.9
14.6
22.3
22.9
22.6
22.0
6.3
10.1
9.3
21.5
13.5

0.4%
1.3%
1.6%
1.4%
1.1%
1.4%
1.5%
4.6%
1.7%
3.9%
0.5%
1.6%

0.4%
1.3%
1.8%
1.5%
1.4%
1.5%
1.8%
5.1%
1.9%
4.2%
0.6%
1.8%

15,999
31,477
8,771
9,288
4,994
22,971
28,955
2,130
3,674
7,013
135,271
183,033

20.79
15.40
15.35
15.84
31.37
22.01
21.56
34.89
21.94
24.19
19.22
21.50

19.34
13.0%
13.94
17.6%
13.93
3.8%
14.10
-6.0%
18.94 na
19.57
5.8%
18.45
10.2%
24.34
-5.7%
19.35
-5.6%
20.07
5.5%
16.89
11.2%
18.78
13.9%

3.1
na
3.1
2.2
5.7
2.2
2.6
1.8
9.8
3.8
4.2
3.8

2.8
na
3.0
2.1
4.6
2.0
2.3
1.5
8.0
2.6
3.5
3.3

15.9%
-28.6%
21.7%
14.2%
19.5%
10.4%
12.5%
5.6%
42.3%
14.1%
23.8%
18.8%

15.2%
-45.0%
21.8%
15.0%
27.1%
10.8%
13.4%
6.7%
45.3%
15.5%
22.7%
18.9%

15.3%
-98.7%
na
15.3%
27.9%
11.2%
14.0%
6.4%
45.4%
14.1%
21.5%
18.4%

9.9
8.3
9.5
9.1
8.5
11.0
10.6
11.2
12.1
15.2
9.7
10.4

9.4
7.6
8.4
8.5
7.5
10.0
9.3
9.9
10.9
13.4
8.8
9.4

na
na
na
2.1%
na
1.3%
1.0%
1.2%
4.6%
1.3%
0.8%
1.0%

na
na
na
2.1%
na
1.5%
1.1%
1.5%
3.8%
1.3%
0.8%
1.1%

SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

51

Travel and LeisureHotels


December 12, 2014

THAILAND

HOTELS
SECTOR BRIEF

CIMB Analyst(s)

Back to the limelight


We believe Thai hotels will enjoy a decent turnaround in 2015, even
though martial law has not been lifted. The sector will not only enjoy
higher topline growth on the back of a rebound in tourist arrivals, it is
also likely to enjoy higher room rates and margins, with fewer freebies
given out to attract customers.

Kasem Prunratanamala, CFA


T (66) 2 6579221
E kasem.prunratanamala@cimb.com

Figure 1: Tourist arrivals look set to rebound in 2015


2,800,000

Emergency decree

2,600,000
Show Style "View Doc Map"

2,400,000
2,200,000
2,000,000
1,800,000

Highlighted Companies

1,600,000

Minor International (MINT)


It will not only benefit from the tourism recovery in
Thailand, but will also profit from the rising tourism
trend in Africa. Its food business is likely to see a
stronger year in 2015. We expect improvements all
round for MINT.

1,400,000

Central Plaza Hotel (CENTEL)


CENTEL would ride the recovery in tourism and
consumer consumption next year. With that, coupled
with a low base, we expect CENTEL to post strong
earnings growth in 2015.

1,200,000

Coup

1,000,000
Jan

Feb

Mar

Apr
2011

May

Jun

2012

Jul
2013

Aug

Sep

Oct

Nov

Dec

2014
SOURCES: CIMB, COMPANY REPORTS

We maintain our Overweight call on


the sector. We like both MINT and
CENTEL due to the recovery of their
hotel and food businesses. We prefer
MINT to CENTEL given its greater
diversification
and
lower
concentration risk, especially on the
food side. MINT is also one of our top
picks for the Thai market for 2015.

Recover from a low base


We expect tourist arrivals to contract
by 4% this year to about 25.5m before
rebounding by 13% to 28.7m in 2015,
driven by the pick-up in Chinese
tourist arrivals.
We believe that the calmer political
situation will bode well for the
recovery of the hotel industry, even
though the rebound could have been
stronger had the military government
lifted the martial law. The government
may, however, lift the martial law only
in tourist destinations, which could be
a catalyst for the sector.

Room to raise ADR more


aggressively
With the rebound in tourist arrivals,
we believe that many Thai hotels,
especially in the upcountry, would see
their occupancy rates approaching
75-80%, allowing them to raise their
average daily room rate (ADR) more
aggressively. As such, there will be
double boost to their topline should
the occupancy rate reach the
threshold.

Enhancing margins
Thai hoteliers have learnt from past
political crises that cutting prices will
not help boost occupancy rate during
the crisis. Therefore, they did not do
that in the recent one.
They maintained or even raised their
room rates but handed out discounts
in the form of free nights following a
couple of nights stay, free breakfast,
free wifi, etc. We believe that once
tourist arrivals show signs of a solid
turnaround, they would no longer
hand out these freebies, thereby,
improving their margins.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

HotelsThailand
December 12, 2014

Figure 2: Sector Comparisons


Company
Minor International
Central Plaza Hotel
The Erawan Group
Country/subsector A average

Bloomberg
Ticker

Recom.

MINT TB
CENTEL TB
ERW TB

Add
ADD
Not Rated

Price Target Price


(local curr)
36.75
35.00
5.00

(local curr)
42.00
38.50
n.a.

Market Cap
(US$ m)
4,479
1,439
376

Core P/E (x)


CY2014
32.5
41.3
nm.
36.9

CY2015
25.6
26.6
43.1
31.8

3-year EPS
CAGR (%)
17.0%
15.0%
43.0%
25.0%

P/BV (x)
CY2014
5.23
4.36
2.57
4.05

CY2015
4.60
3.93
2.47
3.67

Recurring ROE (%)


CY2014
17.0%
10.8%
-1.9%
8.7%

CY2015
19.1%
15.5%
5.6%
13.4%

CY2016
20.5%
16.9%
8.4%
15.3%

EV/EBITDA (x)
CY2014
24.0
16.6
21.3
20.6

CY2015
19.1
13.5
12.6
15.1

Dividend Yield (%)


CY2014
1.0%
1.4%
0.0%
0.8%

CY2015
1.3%
1.2%
0.7%
1.1%

SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

53

MediaMedia - overall
December 12, 2014

THAILAND

MEDIA - OVERALL
SECTOR BRIEF

CIMB Analyst(s)

Be more selective
We are Neutral on the sector and do not have a top pick in the sector as
we see a lack of near-term re-rating catalysts (for FTA-TV and outdoor
media) and demanding valuations (for cinema). From a business
perspective, we prefer cinema due to healthy competition, but dislike
FTA TV due to the intensifying price competition from new players.

Pisut NGAMVIJITVONG
T (66) 2 6579226
E pisut.ng@cimb.com

Figure 1: TV rating comparison


3.5
3.0
2.5

Show Style "View Doc Map"

2.0
1.5
1.0
0.5

Highlighted Companies
BEC World
BEC is the second-largest FTA-TV operator by ad
revenue, which will operate under a concession from
MCOT until 2020. BEC won three digital terrestrial
TV channel licences from the auction in 2013.
Major Cineplex Group
Major is the largest cinema operator in Thailand
according to the number of screens and cinema
revenue. It currently has 480 screens, 60% of which
are in Bangkok, and the rest are in provinces.
MCOT
MCOT is the third-largest FTA-TV operator by ad
revenue and is 60% owned by the Ministry of
Finance. It recently won two digital terrestrial TV
channel licences from the auction in 2013.

0.0
BBTV

BEC

MCOT

WORK

RATV
Aug

RS

TPBS

TRUE

MONO

NBT

Sep

SOURCES: CIMB, Nielsen, COMPANY REPORTS

Even though media stocks are


discretionary consumption plays and
could benefit from the falling fuel
price
and
low
interest
rate
environment, we also think that softer
agricultural
prices
and
high
household debt could offset the
consumption growth momentum.

FTA TV into the dark age


We are negative on the free-to-air TV
industry in FY15 due to 1) subpar adex
growth from a mild economic
recovery, 2) potential price war and 3)
rising opex (content, staffing and
marketing). In the medium term, we
prefer new players like Grammy, RS
and Work over incumbents like BEC
and MCOT, as the digital terrestrial
TV business should generate positive
NPV for new players that function as
both
content
providers
and
broadcasters. However, we prefer
incumbents over new players at this
price as we think that the market
could disappoint in terms of the new
players financial performances at the
initial stage.

Cinema good but too


expensive
We are upbeat on the cinema
businesss outlook in FY15 on the back

of healthy competition and a decent


Hollywood movie line-up. We are
positive on Majors first-mover
advantage in the second- and
third-tier provinces, which could
allow Major to capitalise on the
urbanisation cycle in these markets.
However, Majors recent share price
rally (up 50% YTD) prevents us from
upgrading our rating as the stock is
currently trading at 24x FY15 core
P/E, which is 1.5 s.d. above its
five-year historical average.

Outdoor slow recovery


We have seen signs of a recovery in
1Q15 as there has been an increase in
advanced bookings since 4Q14 for
property billboards and FMCG, not
only in Bangkok but other provinces
as well. Though it is not a V-shaped
recovery, we think that there has been
a continuous pick-up. In FY15, we
may see more M&A among outdoor
media players. In addition, Plan B,
one of the leading outdoor media
operators, is planning on an IPO in
FY15 and plans to use funds from the
proceeds to expand its business.
Meanwhile, VGI is still looking for
partners to expand its market share in
outdoor media, where it targets a 50%
market share in the next three years.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Media - overallThailand
December 12, 2014

Figure 2: Sector comparisons


Company

Bloomberg

Price

Target
Market Cap
Price
(local curr) (local curr) (US$ m)

Recom.

Ticker

Core P/E (x)


CY14

CY15

CY16

2-year EPS
CAGR (%)

P/BV (x)
CY14

CY15

Recurring ROE (%)


CY16

CY14

CY15

CY16

EV/EBITDA (x)
CY14

CY15

Dividend Yield
(%)
CY14

CY15

Indonesia
Media Nusantara Citra
Surya Citra Media
Indonesia average

MNCN IJ
SCMA IJ

Add
Add

2,315
3,280

3,500
4,000

2,676
3,883
6,559

16.8
33.0
23.7

14.4
27.6
20.1

12.4
22.5
16.9

3.8%
6.0%
6.0%

3.8
14.6
6.8

3.3
11.9
5.8

2.9
9.7
4.9

24.3%
48.6%
30.9%

24.7%
47.5%
31.2%

24.9%
47.7%
31.6%

10.1
22.6
15.2

8.6
19.1
12.8

2.6%
1.9%
2.2%

3.0%
2.1%
2.5%

MPR MK
MCIL MK

Outperform
Hold

1.89
0.79

2.10
0.82

607.9
379.6
987.5

13.1
9.8
11.6

11.5
9.9
10.8

10.2
9.5
9.9

-11.9%
-13.7%
-12.7%

1.3
1.7
1.4

1.2
1.6
1.3

1.2
1.5
1.3

9.6%
18.9%
12.4%

10.7%
16.8%
12.6%

11.7%
16.2%
13.2%

5.1
5.6
5.3

4.7
5.5
5.0

5.9%
4.7%
5.4%

6.7%
5.2%
6.1%

MAJOR TB
BEC TB
MCOT TB
VGI TB

Hold
Hold
Hold
Reduce

26.00
53.25
17.40
12.50

24.38
52.00
20.00
11.00

705.0
3,246
364.4
1,307
6,361

21.5
22.2
19.2
37.3
25.6

18.1
19.1
14.6
34.1
22.4

15.0
20.1
14.7
28.4
22.2

12.1%
-0.3%
-29.4%
5.2%
-4.5%

3.9
11.4
1.6
21.5
7.4

3.7
10.6
1.5
19.5
7.0

3.6
10.0
1.5
16.9
6.6

17.9%
52.8%
8.1%
58.6%
29.2%

21.0%
57.5%
10.5%
60.0%
32.1%

24.5%
51.2%
10.3%
63.9%
31.7%

13.5
11.6
7.0
26.1
12.9

12.4
10.4
6.1
23.9
11.9

4.4%
4.8%
4.4%
2.5%
3.8%

5.2%
5.5%
5.8%
2.7%
4.4%

Reduce

4.19

4.03

5,104
5,104

20.5
20.5

24.2
24.2

23.3
23.3

-16.9%
-16.9%

1.8
1.8

1.9
1.9

1.9
1.9

9.0%
9.0%

7.7%
7.7%

8.2%
8.2%

16.8
16.8

16.8
16.8

5.0%
5.0%

5.0%
5.0%

19,012

22.1

20.9

19.2

-8.4%

3.5

3.4

3.3

16.4%

16.6%

17.6%

13.6

12.5

3.7%

4.0%

Malaysia
Media Prima Bhd
Media Chinese Int'l
Malaysia average

Thailand
Major Cineplex Group
BEC World
MCOT
VGI Global Media PCL
Thailand average

Singapore
Singapore Press Holdings
Singapore average
Average (all)

SPH SP

SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

55

Oil and GasOil & Gas - overall


December 12, 2014

THAILAND

OIL & GAS - OVERALL


SECTOR BRIEF

CIMB Analyst(s)

Oil price warrior state


Given the sharp decline in the oil price, we believe that the key growth
driver for the sector will be the upside from regulatory changes. PTT is
our top pick for the sector, thanks to its upside from the NGV price lift
that could offset the weak earnings from E&P PTTEP.

Suwat SINSADOK CFA FRM ERP


T (66) 2 6579228
E suwat.si@cimb.com

Figure 1: Oil price, spread and GRM


Spread (US$/bbl)

(US$/bbl)

18

140

16

120

14
Show Style "View Doc Map"

100

12

80

10

60

40

PTT Exploration & Production


We expect PTTEPs share price to remain under
pressure in the near term due to the sharp decline in
oil price. However, its earnings should be more
resilient than its regional E&P peers given: 1) gas
contributes 70% of volume and 50% of earnings and
2) its gas pricing will be linked to the oil price at only
1/3.
Thai Oil
We believe that TOP is attractive after the recent
share price correction. While the impact of inventory
loss will be large, its core EPS growth in FY15 is
expected to be strong, driven by its improved gross
margin due to lower crude cost and premium.

Murban-Dubai Spread

TOP GRM

Jul-14

Oct-14

Jan-14
Apr-14

Jul-13

Oct-13

Jan-13
Apr-13

Jul-12

Oct-12

Apr-12

Jan-12

Jul-11

Oct-11

Jan-11
Apr-11

Jul-10

Oct-10

Jan-10
Apr-10

Jul-09

Oct-09

Jan-09
Apr-09

Jul-08

Oct-08

Apr-08

Jan-08

Jul-07

Oct-07

Jan-07
Apr-07

20

Jul-06

Oct-06

Jan-06
Apr-06

Highlighted Companies
PTT
Despite the weaker earnings due to a lower oil price,
we believe that PTTs core gas earnings should be
supported by its downstream petrochemical and
refinery associates. The biggest earnings upside
could come from the pass-through benefits of the
LPG and NGV price increases in FY15.

Dubai oil price (RHS)

SOURCES: CIMB, COMPANY REPORTS

We maintain an Overweight given the


limited oil price downside, and more
upside from the energy regulatory
reform that includes NGV and LPG
price lifts. The coal price remains
under pressure due to the chronic
oversupply,
while
the
refinery
industry should improve in FY15,
thanks to a lower oil price.

Regulatory upside
PTT is the only company in the sector
that should benefit from Thailands
ongoing energy reform. This upside
could come in the form of lower
subsidy loss for NGV that caused a
large loss of THB18bn in FY13. We
expect PTT to see up to THB15bn
earnings upside from this reduced
loss from the NGV price increase from
THB10.5/kg to THB16/kg, which is
PTTs NGV cost, by end-FY15.

Oil price downside

thanks to PTTEPs expected volume


growth of 13% yoy in FY15 and its
gas-heavy portfolio that should help
to protect its margin better than its
regional peers.

Refinery to see growth in


FY15
We believe that after a big bath in
FY14 due to the large inventory loss,
refiners should see strong earnings
growth momentum on the back of
US$2-4/bbl higher GRM (40-100%
upside) that should be driven by lower
crude premium and lower fuel loss.

PTT is CIMBs top pick


PTT is our top pick in the sector as it
may be the only major beneficiary of
the regulatory reform and given its
solid core gas earnings due to higher
volumes and rising earnings from its
gas-based olefin producer associate,
PTTGC.

Under the weakening oil price that


has already plunged by US$40/bbl to
US$64/bbl, we see PTTEP as a direct
loser due to its lower ASP. However,
this should only be in the short term,

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Oil & Gas - overallThailand


December 12, 2014

Figure 2: Sector comparison


Company

Bloomberg
Ticker

Recom.

Price

Target Price

Market Cap

(local curr)

(local curr)

(US$ m)

Core P/E (x)


CY14

CY15

CY16

3-year EPS CAGR (%)

P/BV (x)
CY14

CY15

Recurring ROE (%)


CY16

CY14

CY15

CY16

EV/EBITDA
CY14(x)CY15

Dividend
Yield CY15
(%)
CY14

Asia
Thailand
PTT Global Chemical
Thai Oil
Bangchak Petroleum PCL/The
IRPC PCL
Esso Thailand PCL
Thailand average

PTTGC TB
TOP TB
BCP TB
IRPC TB
ESSO TB

Add
Hold

55.75
44.00
33.00
3.24
4.96

70.00
48.00
37.79
3.55
5.88

7,657
2,734
1,385
2,018
523.3
14,317

7.9
69.6
11.3
813.0
na
13.7

7.0
9.4
8.7
22.0
19.9
8.6

6.1
8.6
8.1
14.1
10.2
7.4

5.7%
-10.0%
4.2%
74.6%
na
5.2%

1.0
1.0
1.2
0.9
0.8
1.0

0.9
0.9
1.1
0.9
0.8
0.9

0.9
0.9
1.1
0.8
0.8
0.9

13.0%
1.4%
11.1%
0.1%
-13.3%
7.4%

14.0%
10.4%
13.3%
3.9%
4.1%
11.2%

15.2%
10.5%
13.5%
6.0%
7.7%
12.4%

5.8
17.2
7.0
20.9
na
8.6

5.2
6.7
5.8
11.8
7.4
6.2

5.7%
0.6%
4.0%
1.9%
na
3.8%

6.5%
4.8%
4.7%
2.5%
1.5%
5.2%

BPCL IN
HPCL IN
IOCL IN

Reduce
Reduce
Reduce

669.0
574.3
345.2

500.0
330.0
320.0

7,799
3,136
13,514
24,448

15.0
12.0
8.8
10.5

13.3
10.2
7.3
8.9

na
39.8
28.2
29.9

na
-25.6%
-25.7%
-32.3%

2.1
1.3
1.1
1.3

1.9
1.2
1.0
1.2

na
4.8
3.9
4.1

14.6%
11.5%
13.3%
13.3%

15.0%
12.3%
14.4%
14.2%

na
4.8%
5.7%
5.5%

9.4
7.2
6.8
7.5

9.1
6.5
5.4
6.4

1.8%
1.5%
3.7%
2.8%

1.8%
1.7%
3.8%
2.9%

South Korea
SK Innovation
GS Holdings Corp
S-Oil Corp
South Korea average

096770 KS
078930 KS
010950 KS

Add
Add
Add

81,700
40,150
43,800

108,000
54,000
55,000

6,852
3,384
4,473
14,709

na
na
na
-91.7

7.2
7.5
8.9
7.7

6.1
6.8
7.4
6.6

22.2%
17.3%
34.1%
23.7%

0.5
0.6
1.0
0.6

0.5
0.6
0.9
0.6

0.4
0.5
0.8
0.5

-0.6%
-0.2%
-1.4%
-0.6%

6.7%
7.6%
10.3%
7.6%

7.5%
7.9%
11.3%
8.4%

13.3
7.7
21.0
13.1

6.2
4.4
6.4
5.8

3.9%
3.5%
0.7%
2.9%

3.9%
3.5%
4.4%
3.9%

Taiwan
Formosa Petrochemical
Taiwan average

6505 TT

Not Rated

67.50

72.00

20,593
20,593

23.0
23.0

19.8
19.8

na
na

na
na

2.6
2.6

2.5
2.5

na
na

11.6%
11.6%

12.8%
12.8%

na
na

13.0
13.0

11.7
11.7

2.6%
2.6%

3.5%
3.5%

30.74

27.81

6,910
6,910

21.3
21.3

17.6
17.6

15.1
15.1

-3.8%
-3.8%

3.0
3.0

2.7
2.7

2.5
2.5

14.5%
14.5%

16.1%
16.1%

17.4%
17.4%

10.8
10.8

9.4
9.4

1.5%
1.5%

2.9%
2.9%

80,977

18.3

10.4

10.2

-4.9%

1.2

1.1

1.0

6.6%

11.1%

9.3%

9.5

7.0

2.8%

3.6%

India
Bharat Petroleum
Hindustan Petroleum
Indian Oil Corp
India average

Australia
Caltex Australia Ltd
Australia average
Average (all)

CTX AU

SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

57

ChemicalsPetrochemical
December 12, 2014

THAILAND

PETROCHEMICAL
SECTOR BRIEF

CIMB Analyst(s)

A turnaround year ahead


FY15 is expected to be a year of mixed fortunes for the sector. Olefins
should remain the strongest, while aromatics should remain the
weakest link given the undersupply and oversupply outlook. A surprise
upside could come from the polyester chain product, PTA, which has
been in a down cycle since FY11 and is likely to recover in FY15.

Indorama Ventures
We like IVL as a turnaround play on the coming PTA
margin recovery on the back of the PX downcycle in
FY14 and PTA cycle recovery in FY15. Its organic
growth momentum for MEG in the US and polyester
in Indonesia should be key catalysts in FY15.
PTT Global Chemical
We like PTTGC for its key advantage of cheap gas
feedstock, which allows it to benefit when oil prices
are high, and its favourable product mix of PX and
MEG that should lead to strong margins in FY15.

HDPE-Naphtha

Jul-14

Oct-14

Apr-14

Jan-14

Jul-13

Oct-13

Apr-13

Jan-13

Jul-12

Oct-12

Apr-12

Jan-12

Jul-11

Oct-11

Apr-11

Jan-11

Jul-10

Oct-10

Apr-10

Jan-10

Jul-09

PTA-PX

Oct-09

Apr-09

Jan-09

Jul-08

Oct-08

Apr-08

Jan-08

Jul-07

1000
900
800
700
600
500
400
300
200
100
0

Oct-07

Highlighted Companies
Siam Cement
We like SCC for its well-balanced earnings portfolio
of domestic cement and building materials
businesses, and its global petrochemical franchise.
SCC is set to benefit from the olefins industry
recovery, solid aromatics spread and SM upcycle.

Monthly price (US$/tonne)

Apr-07

Show Style "View Doc Map"

Figure 1: PTA, HDPE and PX spreads

Jan-07

Suwat SINSADOK CFA FRM ERP


T (66) 2 6579228
E suwat.si@cimb.com

PX-Naphtha

SOURCES: CIMB, COMPANY REPORTS

The petrochemical companies are


likely to see a diverse path, with
strong earnings growth momentum
for olefins plays, SCC and PTTGC, on
the back of rising industry margins.
IVL should continue to see a margin
turnaround, led by PTA and PET.
Therefore, we maintain an Overweight
rating on the sector. SCC is our top
pick due to its greater EPS upside
potential from the rising margin for
olefins.

A mixed fortune
SCC should see rising margins for all
businesses in FY15 given the
continued industry upcycle to drive
margins for PE and PP, while its
cement earnings should recover due
to an improved cement demand
growth. IVL could see better earnings
in FY15, driven by earnings growth
from M&A and a margin recovery for
PTA in FY16. PTTGC as a gas-based
olefins producer could see a
medium-term growth outlook given
that its earnings upside from volume
growth and industry upcycle could be
offset by lower margins due to the
weak oil price.

A turnaround theme
FY15 could be a turnaround year for
all three petrochemical companies.
IVL should be the strongest
turnaround company, with earnings
growth from M&A and improved PTA
margins. SCC could see its earnings
jump on the back of improved cement
margins and rising olefin spreads.
PTTGC may see the smallest
turnaround, mainly due to the higher
gas feedstock supply, but this would
be partly offset by the weak margins
due to a lower oil price.

Oil price impact


While PTTGC may be a loser as a
gas-based olefin producer, SCC should
be the strongest winner from a weak
oil price environment given its higher
olefin margin and lower energy cost
for cement production.

Time to reload
We believe that after a period of share
price consolidation and correction, it
is time to reload petrochemical stocks
ahead of their earnings growth
momentum and turnaround year.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

PetrochemicalThailand
December 12, 2014

Figure 2: Sector comparison


Company

Bloomberg
Ticker

Recom.

Price

Target Price

Market Cap

(local curr)

(local curr)

(US$ m)

Core P/E (x)


CY14

CY15

CY16

3-year EPS CAGR (%)

P/BV (x)
CY14

CY15

Recurring ROE (%)


CY16

CY14

CY15

CY16

EV/EBITDA Dividend Yield


CY14(x)CY15
CY14(%) CY15

Asia
Thailand
Indorama Ventures
Siam Cement
PTT Global Chemical
Vinythai PCL
Thai Plastic & Chemicals PCL
Thailand average
Malaysia
Petronas Chemical Group
Malaysia average
South Korea
Hanwha Chemical Corp
Lotte Chemical
LG Chem
Kumho Petrochemical
OCI
South Korea average
Taiwan
Formosa Plastics
Nan Ya Plastics
Formosa Chems & Fibre
Reliance Industries
Taiwan average
India
Reliance Industries Ltd
India average
Average ( Asia)
US
Dow Chemical Co/The
Eastman Chemical Co
EI du Pont de Nemours & Co
Celanese Corp
Westlake Chemical Corp
PPG Industries Inc
Alpek SAB de CV
Average (USA)
ME/Europe
Saudi Basic Industries Corp
Saudi Kayan Petrochemical Co
Yanbu National Petrochemicals Co
Industries Qatar QSC
BASF SE
Arkema SA
LANXESS AG
Solvay SA
Average ( ME/Europe)
Average (all)

IVL TB
SCC TB
PTTGC TB
VNT TB
TPC TB

Add
Add
Add

21.70
462.0
55.75
10.00
28.75

33.00
553.0
70.00
11.30
32.00

3,182
16,887
7,657
361.5
767.3
28,855

30.9
15.0
7.9
35.1
8.8
12.6

15.8
12.9
7.0
22.7
9.1
10.7

11.7
12.0
6.1
22.5
na
9.5

na
6.0%
5.7%
35.5%
na
8.9%

1.7
3.3
1.0
0.8
1.3
1.8

1.5
2.8
0.9
na
na
1.7

1.4
2.5
0.9
na
na
1.6

5.5%
22.3%
13.0%
2.1%
16.2%
15.0%

10.2%
23.6%
14.0%
na
na
17.0%

12.6%
22.0%
15.2%
na
na
17.4%

12.6
11.2
5.8
na
na
9.0

10.4
9.4
5.2
na
na
7.8

0.9%
2.6%
5.7%
2.9%
7.1%
3.4%

1.7%
3.0%
6.5%
1.7%
7.2%
3.9%

PCHEM MK

Add

5.25

6.50

12,066
12,066

13.3
13.3

11.3
11.3

10.7
10.7

3.9%
3.9%

1.7
1.7

1.6
1.6

1.4
1.4

13.9%
13.9%

14.3%
14.3%

13.9%
13.9%

7.2
7.2

6.7
6.7

3.8%
3.6%

4.4%
4.4%

Hold
Add
Add
Hold
Add

12,650
159,500
188,500
77,900
82,100

18,800
222,000
320,000
79,000
167,000

1,858
4,959
11,331
2,153
1,776
22,077

18.6
20.3
13.2
30.2
na
18.1

6.3
8.7
8.8
9.3
26.3
9.0

5.2
5.7
6.6
5.8
10.8
6.4

272.1%
51.6%
16.3%
na
na
43.9%

0.4
0.9
1.0
1.6
0.7
0.9

0.4
0.8
0.9
1.4
0.7
0.8

0.4
0.7
0.8
1.1
0.7
0.7

2.3%
4.2%
7.9%
5.2%
-2.2%
5.0%

6.9%
9.4%
11.2%
15.6%
2.7%
9.5%

8.1%
12.8%
13.4%
21.2%
6.2%
12.2%

8.0
4.9
5.1
10.7
7.5
6.1

5.9
2.8
4.4
6.6
6.4
4.7

4.0%
0.9%
2.1%
1.3%
0.6%
1.8%

4.0%
0.9%
2.1%
1.3%
0.6%
1.8%

Not Rated
Not Rated
Not Rated
Hold

68.80
63.40
66.40
67.50

81.00
68.00
92.00
985.0

14,026
16,103
12,464
20,593
63,185

17.1
19.3
13.8
0.9
7.5

14.4
16.8
14.9
0.9
7.3

na
na
na
0.8
0.8

na
na
na
4.9%
-11.2%

2.1
2.1
1.6
0.1
0.9

2.2
2.0
1.6
0.1
0.8

na
na
na
0.1
0.1

12.1%
10.6%
11.5%
12.4%
11.9%

14.9%
12.1%
10.6%
11.0%
11.6%

na
na
na
11.7%
11.7%

25.7
15.8
10.4
-1.0
5.3

22.8
14.4
11.9
-1.2
5.1

3.5%
3.1%
4.3%
14.6%
4.3%

4.9%
4.2%
4.7%
15.9%
5.3%

RIL IN

932.6

1,113

48,468
48,468
174,651

13.0
13.0
11.0

12.0
12.0
9.5

11.0
11.0
7.0

5.8%
5.8%
6.4%

1.4
1.4
1.2

1.3
1.3
1.1

1.2
1.2
0.8

10.8%
10.8%
10.8%

11.5%
11.5%
11.9%

11.4%
11.4%
12.6%

9.5
9.5
7.1

9.6
9.6
6.6

1.1%
1.1%
2.8%

1.1%
1.1%
3.2%

DOW US
EMN US
DD US
CE US
WLK US
PPG US
ALPEKA MM

46.34
75.86
71.23
60.08
58.59
220.9
19.33

55.65
93.67
71.41
67.69
87.44
228.4
25.92

54,615
11,267
64,531
9,230
7,797
30,308
2,814
180,562

15.4
10.7
17.5
10.6
10.7
21.7
17.6
15.8

14.1
9.9
15.9
10.8
10.6
19.8
13.6
14.6

11.7
9.4
14.3
10.2
9.9
18.0
12.9
12.9

-0.9%
0.9%
-2.3%
-6.3%
8.8%
-19.6%
119.7%
-3.9%

2.1
2.6
4.1
2.9
2.5
5.0
1.6
3.0

2.1
2.4
3.7
2.5
2.2
5.0
1.5
2.8

1.9
1.8
3.4
2.2
1.8
4.5
1.5
2.5

14.9%
26.2%
23.6%
30.1%
26.4%
25.6%
9.4%
20.3%

15.0%
24.9%
24.5%
25.0%
22.0%
25.2%
11.6%
20.1%

17.0%
21.7%
24.7%
22.9%
19.6%
26.3%
11.7%
20.7%

8.2
8.4
10.0
7.1
5.6
13.8
7.4
9.1

8.1
7.0
9.6
7.2
5.3
12.3
6.6
8.6

3.2%
1.8%
2.6%
1.6%
1.0%
1.2%
3.5%
2.4%

3.4%
2.0%
2.8%
1.7%
1.3%
1.2%
3.4%
2.6%

SABIC AB
KAYAN AB
YANSAB AB
IQCD QD
BAS GR
AKE FP
LXS GR
SOLB BB

81.44
11.16
44.82
182.0
71.88
54.58
37.92
111.6

135.3
14.16
75.20
197.8
78.14
60.47
46.48
121.2

65,110
4,461
6,719
30,239
82,179
4,948
4,320
11,761
209,736

9.3
41.6
9.8
15.1
13.4
16.1
18.0
16.5
12.2

9.0
17.5
8.9
13.1
12.5
12.8
15.5
13.9
11.2

8.8
14.4
8.8
12.7
11.6
10.5
11.6
11.7
10.6

3.2%
na
2.5%
2.7%
3.3%
28.5%
na
40.8%
9.4%

1.5
1.2
1.7
3.4
2.3
1.4
1.5
1.4
1.9

1.4
1.1
1.6
3.3
2.2
1.4
1.4
1.3
1.8

1.3
1.0
1.6
3.3
2.0
1.3
1.3
1.3
1.7

16.3%
2.8%
17.0%
22.1%
17.7%
9.2%
8.7%
8.2%
15.7%

16.1%
6.5%
18.4%
26.0%
17.9%
10.9%
9.4%
9.8%
16.4%

15.5%
7.2%
18.1%
26.2%
18.0%
12.6%
11.9%
11.0%
16.4%

5.5
13.1
6.5
57.7
7.8
6.6
6.2
6.3
7.4

5.0
9.9
6.0
54.9
7.4
6.4
5.9
5.6
6.9

7.0%
na
8.6%
6.2%
3.9%
3.3%
1.3%
2.8%
5.1%

7.4%
na
9.7%
6.5%
4.1%
3.3%
1.7%
2.9%
5.4%

564,950

12.7

11.5

10.1

6.6%

1.8

1.7

1.5

14.4%

15.1%

15.8%

7.8

7.3

3.5%

3.8%

009830
011170
051910
011780
010060

KS
KS
KS
KS
KS

1301
1303
1326
6505

TT
TT
TT
TT

SOURCES: CIMB, COMPANY REPORTS

59

PropertyProperty Development
December 12, 2014

THAILAND

PROPERTY
DEVELOPMENT
SECTOR BRIEF

CIMB Analyst(s)

Prefer homes to factories


We believe residential property developers are much better positioned
than industrial estate plays to benefit from any consumption stimulus
measures. They are also less affected by property tax given their
shorter business cycles for land holdings, and offer more sustainable
earnings visibility, cheaper valuations, and higher yields.

Wattaipun Ekataksin
T (66) 2 6579229
E wattaipun.ekataksin@cimb.com

Figure 1: High earnings visibility for residential plays backed by solid backlogs
Company
(THBm)

Show Style "View Doc Map"

Highlighted Companies
Supalai (SPALI TB)
SPALI is one of the leading residential developers in
Thailand with revenue mix of 50% SDH/TH and 50%
condo. It is well known for offering products that are
perceived as good value for money. It has significant
exposure to the rural market (40% of its total
launches). As a company focussed on
cost-efficiency, SPALI consistently achieves high
gross margins of above 40%, and net margins
exceeding 20%.
Pruksa (PS TB)
PS is the largest developer in Thailand in terms of
M s presales. It is a dominant player in the TH
market (50% market share), achieving an impressive
turnaround after being severely hit by the floods. Its
less-is-more strategy, with its efficient shorter
business cycle time, has helped to speed up its
bottom line improvements.

ANAN
AP
LH
LPN
PS
QH
SC
SIRI
SPALI

CIMB's
2014F
9,300
21,443
25,119
13,690
40,000
19,401
9,661
30,496
19,100

Sales revenue 2014F


Co's backlog

% Secured

2014F
3,894
2,076
66
3,460
12,000
1,840
2,218
9,920
7,063

2014F
104.3%
104.4%
74.3%
82.0%
105.9%
88.8%
101.2%
88.4%
97.0%

% Locked in

62.4%
94.7%
74.0%
56.7%
75.9%
79.4%
78.2%
55.9%
60.0%

Sales revenue 2015F


Co's backlog
CIMB's
2015F
4,714
8,304
2,959
16,003
16,281
5,530
3,274
21,825
16,269

2015F
12,025
23,587
27,631
16,710
46,000
21,729
10,821
35,071
21,965

% Secured
2015F
39.20%
35.21%
10.71%
95.77%
35.39%
25.45%
30.25%
62.23%
74.07%

Sales revenue 2016F


Co's backlog
CIMB's
2016F
9,743
3,145
7,165
1,890
7,476
410
4,752
12,800
8,236

2016F
14,790
25,474
30,394
19,217
52,900
24,989
12,444
39,279
24,820

% Secured
2016F
65.88%
12.35%
23.57%
9.84%
14.13%
1.64%
38.19%
32.59%
33.18%

SOURCES: CIMB, COMPANY REPORTS

We maintain our Overweight rating


on the property sector. Within the
sector, we like stocks that offer
defensive growth, backed by a
diversified revenue/product mix, high
lock-in rate for FY15 condo revenue
based by solid backlogs, healthy
balance sheets, high ROE, and decent
yields. As such, our top property picks
are SPALI and PS.

Promising outlook
Despite the challenging macro
environment, we still expect 4Q14s
earnings to continue to show yoy
growth, thanks to sales expansion in
both
SDH/TH
and
condos,
sustainable gross margins and lower
SG&A ratios. It would appear that the
results for some companies, like AP,
SC and QH, may have already peaked
in 3Q14. However, firms like ANAN,
LPN, SIRI and SPALI should post
backend-loaded earnings in 4Q14 on
an expected larger bulk of condo
transfers. Presales activity will slow
down in 4Q14 for most of the
companies.
FY14s
normalised
earnings are expected to grow 14% on
average for our coverage, and should
continue to grow at 22% in FY15 and
15% in FY16.

Like residential more


We maintain our Overweight stance
on residential property developers.
Upside for earnings is still possible,
given that the market has not fully
factored in the companies guidance
for top line growth and gross margins
for FY14-15. With their proven
resilient earnings growth and higher
visibility, backed by longer streams of
backlog, residential property players
deserve a rerating (still trading at
either 5-year mean or 0.5 s.d. below
mean on forward P/E). Valuations
remain undemanding at 10.5x CY15
P/E and 9.5x CY16 P/E compared to
the SETs 12.6x CY15 P/E and 11.0x
CY16 P/E. Average yields are also
attractive at 4-5%.

Less keen on industrial plays


We stay Neutral on the industrial
estate
sector.
Valuations
are
demanding and yields are unattractive.
The declining trend in BOI/FDI data
is not supportive of a sustainable land
sales
growth
outlook
in
the
foreseeable future. The BOI and FDI
data on a net submitted application
basis (leading indicator for FDI in
Thailand) for 10M14 showed a decline
of 19% yoy by number of project,
despite the newly-formed BOI Board.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Property DevelopmentThailand
December 12, 2014

Figure 2: Sector comparisons


Com pany
CapitaLand
City Developments
Frasers Centrepoint Ltd
Global Logistic Properties
Ho Bee Land
Hongkong Land
Keppel Land
Overseas Union Enterprise
United Engineers
UOL Group
Wheelock Properties (S)
Wing Tai Holdings
Singapore average
Alam Sutera
Bekasi Fajar
Bumi Serpong Damai
Ciputra Development
Ciputra Property
Lippo Karaw aci
Metropolitan Land
Summarecon Agung
Surya Semesta Internusa
Indonesia average
Eastern & Oriental
Eco World Development Group Bhd
Mah Sing Group
SP Setia
UEM Sunrise Bhd
UOA Development
Malaysia average
Amata Corporation
Ananda Development
AP (Thailand) PCL
Hemaraj
Land And Houses
LPN Development
Pruksa Real Estate
Quality Houses
Sansiri Public Co
SC Asset Corporation
Supalai PCL
Thailand average

Bloom berg
Ticker
CAPL SP
CIT SP
FCL SP
GLP SP
HOBEE SP
HKL SP
KPLD SP
OUE SP
UEM SP
UOL SP
WP SP
WINGT SP

Core P/E (x)


CY2014
CY2015
20.2
17.0
17.1
15.0
8.8
8.4
39.8
30.3
27.2
21.0
19.4
19.5
13.0
12.4
27.4
22.5
28.0
11.4
13.8
12.3
17.2
12.6
9.0
7.8
18.2
16.1

2-yr EPS
CAGR (%)
18.9%
18.2%
9.3%
2.4%
85.3%
-6.8%
-2.4%
65.1%
19.8%
8.0%
62.6%
-10.8%
3.5%

Gearing(%)
CY2014
47.9%
23.0%
95.0%
11.5%
38.4%
8.2%
26.5%
34.0%
38.5%
32.9%
5.5%
14.9%
27.9%

8.0
13.1
12.8
14.5
7.3
11.7
11.7
17.0
10.1
12.2

42.3%
-22.7%
-10.6%
8.1%
22.6%
21.9%
6.7%
1.7%
-17.0%
4.3%

78.4%
0.8%
Net Cash
Net Cash
9.5%
Net Cash
25.1%
24.1%
Net Cash
Net Cash

1.83
2.65
2.47
2.72
1.19
1.92
1.86
4.29
1.99
2.33

1.56
2.24
2.17
2.38
1.05
1.71
1.64
3.61
1.72
2.04

24.9%
13.2%
17.6%
16.7%
9.7%
16.8%
13.5%
23.7%
14.6%
17.5%

21.1%
18.6%
18.0%
17.5%
15.2%
15.4%
14.9%
23.1%
18.2%
17.8%

1.6%
2.9%
0.8%
1.5%
2.5%
2.3%
1.3%
1.5%
2.8%
1.7%

1.7%
1.3%
2.2%
1.7%
2.4%
2.3%
1.4%
1.5%
1.3%
1.9%

20.9
157.0
9.6
14.5
13.0
10.9
13.8

13.5
104.1
8.1
9.6
12.8
8.6
12.1

27.1%
-32.9%
14.9%
32.3%
-5.4%
-6.8%
12.6%

18.4%
177.2%
32.0%
16.9%
6.8%
Net Cash
12.3%

1.72
3.10
1.47
1.38
1.13
1.16
1.37

1.57
3.08
1.32
1.27
1.06
1.09
1.41

8.6%
2.0%
16.6%
10.0%
9.1%
11.0%
10.3%

12.2%
3.0%
17.2%
14.0%
8.6%
13.0%
11.6%

2.0%
0.2%
4.0%
3.4%
2.5%
5.2%
3.1%

2.1%
0.3%
4.4%
3.8%
2.5%
6.2%
2.8%

15.3
12.3
8.4
13.6
13.9
17.6
10.8
9.9
9.0
11.0
10.3
11.9

11.8
9.4
7.0
12.8
12.6
12.2
9.0
8.3
7.0
8.6
8.4
9.8

-4.0%
18.3%
10.2%
1.5%
4.4%
10.1%
9.4%
10.6%
7.9%
15.7%
33.0%
12.8%

58.7%
70.6%
80.9%
62.1%
64.5%
38.3%
64.7%
116.5%
120.2%
100.4%
44.4%
75.2%

1.95
1.73
1.11
2.68
2.62
3.51
2.28
1.87
1.15
1.10
2.63
2.09

1.78
1.46
1.01
2.39
2.52
2.93
1.92
1.65
1.04
0.94
2.17
1.85

13.3%
15.0%
14.4%
21.2%
19.7%
20.8%
22.8%
20.0%
12.7%
10.8%
27.3%
18.6%

15.8%
16.8%
15.0%
19.8%
20.4%
26.1%
23.2%
21.2%
15.5%
11.8%
27.5%
19.9%

2.6%
1.5%
4.8%
2.6%
5.4%
2.8%
2.6%
5.1%
4.8%
3.6%
3.9%
3.9%

3.4%
1.8%
5.7%
3.2%
5.9%
4.2%
2.6%
6.0%
7.1%
4.6%
4.8%
4.6%

Add
Hold
Add
Add
Add
Reduce
Add
Add
Hold
Add
Add
Add

Price
(local curr)
3.29
10.02
1.66
2.52
1.94
6.73
3.37
2.02
2.98
6.71
1.76
1.65

Tgt Px
(local curr)
3.84
9.79
2.11
3.31
2.61
5.54
3.57
3.32
3.02
8.37
1.98
2.09

Mkt Cap
(US$ m )
10,633
6,915
3,641
9,256
983
15,834
3,952
1,395
1,441
4,008
1,598
986

ASRI IJ
BEST IJ
BSDE IJ
CTRA IJ
CTRP IJ
LPKR IJ
MTLA IJ
SMRA IJ
SSIA IJ

Add
Add
Add
Add
Hold
Hold
Add
Add
Add

580
735
1,825
1,295
870
1,130
473
1,560
1,060

730
800
2,200
1,500
670
920
650
1,800
1,100

924
575
2,719
1,593
434
2,115
291
1,825
404

8.1
20.8
15.7
17.3
12.7
12.2
14.6
19.6
14.1
14.4

EAST MK
ECW MK
MSGB MK
SPSB MK
UEMS MK
UOAD MK

Hold
Add
Add
Hold
Add
Hold

2.33
3.95
2.25
3.28
1.59
2.10

2.62
7.60
3.21
3.38
2.44
2.18

743
287
953
2,390
2,071
863

AMATA TB
ANAN TB
AP TB
HEMRAJ TB
LH TB
LPN TB
PS TB
QH TB
SIRI TB
SC TB
SPALI TB

Reduce
Add
Add
Hold
Hold
Add
Add
Add
Hold
Add
Add

16.50
3.46
6.45
4.28
9.50
24.90
30.00
3.92
1.86
3.60
26.75

14.44
4.83
9.72
4.63
10.24
29.78
45.95
5.53
2.11
4.99
32.62

535
350
616
1,261
3,169
1,116
2,028
1,093
770
406
1,394

Recom .

P/BV (x)
CY2014
CY2015
0.83
0.81
1.11
1.05
0.67
0.63
1.02
1.00
0.56
0.55
0.58
0.57
0.70
0.67
0.87
0.85
1.06
0.99
0.73
0.70
0.69
0.67
0.43
0.42
0.75
0.73

Recurring ROE (%)


CY2014
CY2015
4.3%
4.8%
6.7%
7.2%
8.5%
7.8%
2.6%
3.3%
2.1%
2.6%
3.0%
3.0%
5.6%
5.5%
2.5%
2.9%
3.9%
9.0%
5.5%
5.8%
4.1%
5.4%
4.9%
5.5%
4.2%
4.5%

Dividend Yield (%)


CY2014
CY2015
1.9%
2.4%
1.8%
2.0%
4.6%
3.0%
2.4%
2.3%
3.2%
3.2%
2.6%
2.7%
3.3%
4.5%
1.8%
2.2%
2.3%
2.3%
2.2%
2.4%
3.4%
3.4%
5.5%
3.8%
2.5%
2.6%

SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

61

TechnologyTechnology Components
December 12, 2014

THAILAND

TECHNOLOGY
COMPONENTS
SECTOR BRIEF

CIMB Analyst(s)

Automotive is the next driver

We expect the auto segment to be the main driver for Thai electronic
companies over the next five years due to increasing demand for
electronic components in vehicles. Our top pick is still KCE for its solid
growth backed by high exposure to the auto segment and its cheapest
rating in the sector.

Thanakorn CHONGSUKSIRICHOK
T (66) 2 657 9227
E thanakorn.ch@cimb.com
Show Style "View Doc Map"

Figure 3: Thai technology components companies P/E


30.0

25.0

20.0

Highlighted Companies
Delta Electronics
Despite Deltas impressive growth and stable growth
outlook in 2015, we believe its current valuation of
13.7x FY16 P/E is not attractive as it stands at 1.7
s.d. above its 5-year mean due to the recent price
rally following its inclusion in MSCI Global Standard
Indexes.
KCE Electronics
KCE remains our top pick for the tech sector in
Thailand given the high growth potential from rising
demand for automotive PCB, supported by a new
factory which will come online next year.
SVI
We expect SVI to underperform the SET index in
2015 after the fire in Nov 2014. Its earnings could
come under pressure from a ramp-up of production
after the fire. It will take time at the earliest about a
year to reach pre-fire capacity.

15.0

10.0

5.0

0.0
Jan-10

Jan-11

Jan-12

Delta Electronics (Thailand)

Jan-13

KCE Electronics

Jan-14

SVI Public Company Limited

SOURCES: WHO

The share price performance of the


tech companies in 2014 was quite
impressive, with our top pick KCE
outperforming the SET index in 2014.
We have a Neutral rating on the sector
as valuations are stretched and most
companies are entering into an
expansion phase, which could soften
earnings in the near term.

Autos incorporating more


electronic parts

We expect the automotive segment to


be the main growth area for electronic
component companies over the next 5
years on the back of higher demand
and the use of electronic components
in cars. Electronic components
currently account for 30% of vehicle
production cost and are expected to
increase to 40% by 2016. As a result,
many companies are trying to
increase their exposure to the
automotive segment.

Deltas valuation is not


attractive yet

Delta is pursuing a new growth sector


in regional business (trading, turnkey,
and solution) to diversify from the
ODM segment. Although the company
generates solid positive cash flow with
high cash on hand, we think that its
current valuation of 13.7x FY16 P/E is
not attractive.

SVI to take time to recover

We believe that SVI will report poor


1H15 earnings during its ramp-up of
production after the fire. The earliest
timeline for a recovery to the pre-fire
production level will be 2016.

KCE riding on hybrid and EV


vehicle trend

With the highest exposure to the


automotive segment (70%), KCE is
our top pick in the sector due to its
expertise in producing automotive
PCB and its new capacity that will
allow it to benefit from industry
growth. It is riding on the trend
towards hybrid and EV vehicles.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Technology ComponentsThailand
December 12, 2014

Figure 4: Sector comparisons


Price
Company
Delta Electronics (Thailand)
KCE Electronics
SVI Public Company Limited
Weighted Average

Bloomberg Ticker
DELTA TB
KCE TB
SVI TB

Recom.

(local
curr)
Hold 77.00
Add 38.75
Reduce
4.22

Target
Price
(local
curr)
80.00
49.00
3.12

Market Cap
(US$ m)

Core P/E (x)

3-year EPS
CAGR (%)

P/BV (x)

Recurring ROE (%)

EV/EBITDA (x)

Dividend Yield
(%)

CY2014

CY2015

CY2014 CY2015 CY2014 CY2015 CY2016 CY2014 CY2015 CY2014 CY2015

2,926
666
291

16.3
11.3
12.4

14.5
10.3
21.5

9.1%
20.6%
-4.8%

3.48
3.67
1.94

3.17
2.93
1.85

22.3%
35.7%
15.6%

22.8%
31.5%
8.8%

22.6%
30.8%
13.2%

12.3
11.0
8.7

10.9
9.0
10.3

3.5%
2.2%
3.4%

3.8%
2.6%
2.1%

3,883

14.9

13.9

11.8%

3.31

2.97

23.3%

22.5%

23.0%

11.6

10.3

3.3%

3.5%

SOURCES: CIMB, COMPANY REPORTS

63

TelecommunicationsTelco - overall
December 12, 2014

THAILAND

TELCO - OVERALL
SECTOR BRIEF

CIMB Analyst(s)

In search of market equilibrium


We maintain our Neutral rating on the Thailand telco sector. In the
mobile space, our upbeat medium-term outlook is neutralised by
near-term headwinds from unfavourable regulatory developments
and intensifying price competition in FY15.

Pisut NGAMVIJITVONG
T (66) 2 6579226
E pisut.ng@cimb.com

Figure 1: Valuation comparison (FY15 EV/EBITDA and FY15 EV/OpFCF)


25
20

Show Style "View Doc Map"

15

Highlighted Companies
Thaicom
Thaicom is an essential infrastructure play for local
TV broadcasters, which compete intensively on
channel variety (satellite free TV) and HD channels
(pay TV).

10
5

0
AIS

DTAC

True
FY15 EV/EBITDA (x)

Jasmine International
Jasmine is the dominant fixed broadband operator in
the upcountry, where the FBB penetration rate is
below 15% vs. 45% in Bangkok.
Total Access Communication
DTAC, the second-largest mobile operator, should
be in a neutral position regardless of whether the
spectrum auction will take place as scheduled.

Jasmine

Thaicom

Intouch

FY15 EV/OpFCF (x)

SOURCES: CIMB, Bloomberg, COMPANY REPORTS

So, until there is more clarity on the


spectrum
auctions,
we
prefer
non-mobile stocks, such as Thaicom
and Jasmine, over mobile names,
justified by FY15 EBITDA growth,
core EPS growth, dividend yields and
core P/E multiples. DTAC is our top
pick in the mobile space. We prefer
Intouch to AIS and TRUEIF (not
rated) to True given higher dividend
yields with similar exposure.

Mobile A challenging year


ahead
We have become less optimistic about
spectrum auctions taking place as per
scheduled in Jul-Aug 15 since the
government still has many milestones
to hit before proceeding with the
auctions. We expect competition to
intensify in 2015, at least until the
spectrum auction timeframe can be
established. Key factors fuelling the
competitive landscape are 1) the
excess network capacity, which needs
to be filled up, 2) the inorganic
demand push for the mid- to
low-income segment to adopt 3G
devices, and 3) the imbalanced
spectrum holdings among the telcos.

Satellite It is all about


utilisation management
We continue to like the satellite
businesss outlook for FY15 given 1)
tight satellite transponder supply for
local TV broadcasters to serve the
growing demand for HD-format
content, 2) the growing demand for
satellite-based mobile backhaul and
broadband internet services in Japan,
China, Australia, Malaysia, India,
Indonesia and the Philippines, and 3)
the opportunity to penetrate new
frontier market Africa with remaining
broadcasting transponder capacity,
where the satellites fixed costs will be
fully offset by capacity sale in the
domestic market.

Fixed broadband Still a long


way to go
We are still positive on the fixed
broadband industrys outlook in FY15
on the back of 1) the mere 15% FBB
penetration rate outside Bangkok, 2)
upselling potential from ADSL to
FTTx for customers in major cities,
and 3) the complementary effect of
rapid 3G device adoption and the
growing popularity of social media
applications.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Telco - overallThailand
December 12, 2014

Figure 2: Sector Comparisons


Company

Bloomberg
Ticker

Recom.

Advanced Info Service


Jasmine International
Intouch Holdings
Thaicom
Total Access Communication
True Corporation
Thailand weighted average

ADVANC TB
JAS TB
INTUCH TB
THCOM TB
DTAC TB
TRUE TB

Hold
Add
Add
Add
Add
Reduce

Price Target Price


(local curr)
(local curr)
245.00
7.60
76.75
35.75
99.25
12.70

243.00
9.50
86.00
52.00
117.00
10.13

Market Cap
(US$ m)
22,187.3
1,625.2
7,496.0
1,193.4
7,158.2
9,519.4

Core P/E (x)


CY2014
CY2015
21.7
14.4
15.8
21.1
20.6
na
25.5

18.9
11.7
13.3
15.5
18.2
241.9
20.5

3-year EPS
CAGR (%)
3.8%
17.9%
10.2%
26.0%
9.6%
na
17.7%

P/BV (x)
CY2014
CY2015
16.1
4.1
17.2
2.3
6.9
3.9
7.9

14.7
3.5
17.1
2.1
7.4
3.5
7.3

Recurring ROE (%)


CY2014
CY2015
73.7%
30.7%
109.5%
11.5%
34.0%
-7.5%
38.4%

81.4%
32.5%
128.8%
14.3%
39.3%
1.5%
37.0%

EV/EBITDA (x)
CY2014
CY2015
12.2
7.4
14.9
7.5
7.7
18.0
11.8

11.3
6.0
12.6
6.0
6.8
15.5
10.5

Dividend Yield (%)


CY2014
CY2015
4.7%
4.2%
6.3%
2.4%
6.1%
0.0%
4.1%

5.4%
5.1%
7.5%
4.8%
6.4%
0.0%
4.8%

SOURCES: CIMB, COMPANY REPORTS

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends

65

Transport InfrastructureTransport Infra - overall


December 12, 2014

THAILAND

TRANSPORT INFRA OVERALL


SECTOR BRIEF

CIMB Analyst(s)

Delivering good news in 2015


According to government plans, 10 mass transit lines will be completed
by 2029, bringing its total length to 515km from 84.3km (61 stations)
currently. 106km and 70 stations will be added in 2016-18. BTS and
BMCL are the major local operators that stand to gain while the key
risk is political uncertainty, which could delay the lines opening.

Praphan Yukhunthrontham
T (66)2 6579239
E praphan.yu@cimb.com

Show Style "View Doc Map"

Figure 1: What will happen for the mass transit network in 2015
Projects

1 Purple
2 Blue Line
(extension)
3 Green (South)
4 Green (North)

Routes

Bang Yai - Bang Sue


Tao Poon - Tha Phra &
Hua Lamphong - Bang Khae
Bearing - Samut Prakarn
Mo Chit - Saphan Mai - Khu Khot

Distance
(Km)
22
26
13
19
80

Year to
operate

Stations

16 (Elevated)
21 (17 elevated &
4 underground)
9 (Elevated)
16 (Elevated)
62

(expected)
2016 BMCL operator; BMN will bid for commercial & ads in 2015
2017 Under construction and will select operator in 2015
2017
2018

Highlighted Companies
BTS Group Holdings (BTS)
BTS, the Bangkok Skytrain operator, also manages
media, property and service businesses. All
business units revenues will be better from
onwards. BTS also receives dividends from BTSGIF
(33% stake).
Bangkok Metro (BMCL)
Although it is the operator of the Purple Line, which
is to commence operations in 2016, and likely to also
operate the Blue Line extension, it will take many
years for BMCL to clear its carry-forward losses and
pay dividends to shareholders.

Note

Under construction and will select operator in 2015


Select civil work contractors by 1Q15

SOURCES: CIMB, COMPANY REPORTS

According to the Ministry of


Transport, THB68bn has been
allocated for transport and traffic
planning in 2015, with 26% going to
MRT+NGV. The government will
select operators for the Blue Line
extension and the South Green Line
extension in 2015; we think BMCL
and BTS will win, respectively. Our
sector call is Neutral, with BTS our
top pick given its strong financial
stability.

Green Line for BTS


The operator of the THB19bn South
Green Line project is likely to be
chosen in 1H15. We think that BTS
will get it given its advantages over
other competitors.
Apart from Green Line extensions,
which BTS is likely to win, BTS is also
interested in other routes, e.g. the
Pink Line (Khae Rai-Min Buri,
expected operation in 2017), the Grey
Line (Watcharaphon-Rama 9 bridge,
expected operation in 2018) and LRT
(Bangna-Suvarnabhumi, expected to
operate in 2017). We think that BTS is
the most likely to receive O&M
contracts; we believe it will clinch the
North and South Green Line
extensions, at least, which will add
THB0.22/share to its current price.

BTS aims to operate 154.8km by 2018


and to rake in operation and
maintenance (O&M) revenue of
THB10bn.

Blue and Purple Lines for


BMCL
BMCL was awarded a contract in 2013
to operate the Purple Line till 2043
and it guided that it would open 3-4
months ahead of schedule (in
late-2016). Besides, it appears that the
government may negotiate with
BMCL about operating the Blue Line
extension. In our base case, we expect
the government to open the project
for bidding and BMCL to win it on
account of its lower capex and opex as
well as shorter timeline compared to
other competitors.
If BMCL is awarded the Blue Line
extension,
this
will
add
THB0.22/share, which we have yet to
factor into our model.

The sooner the better


The sooner government can make
more mass transit lines materialise,
the better the opportunity for both
BTS and BMCL to book O&M
revenues. We believe that BMCL may
improve its financial position faster
than expected. We have an Add call on
BTS and Reduce for BMCL.

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Transport Infra - overallThailand


December 12, 2014

Figure 2: Sector comparisons


Company

Bloomberg Recom.
Ticker

Singapore
ComfortDelGro
SMRT Corporation
Singapore- Average

Price

Target Price Market Cap

(local curr) (local curr)

CD SP
MRT SP

ADD
ADD

BTS TB
BMCL TB

ADD
REDUCE

(US$ m)

Core P/E (x)


CY2014 CY2015

3-year EPS
CAGR (%)

P/BV (x)

Recurring ROE (%)

EV/EBITDA (x) Dividend Yield (%)

CY2014 CY2015 CY2014 CY2015 CY2016 CY2014 CY2015 CY2014

CY2015

2.6
1.6

3.1
1.8

4,221
1,850
6,071

18.7
30.7
21.0

18.2
26.4
20.1

4.9%
19.2%
8.1%

2.37
2.89
2.51

2.24
2.71
2.37

13.2%
9.8%
12%

12.6%
10.7%
12%

12.7%
12.7%
12%

7.2
8.9
7.7

6.9
7.8
7.1

3.0%
1.4%
2.5%

3.1%
1.5%
2.6%

10.1
1.9

11.0
1.1

3,637
1,161
5,942

52.8
na
52.8

47.2
na
47.2

13.8%
na
32.6%

2.10
4.62
2.41

2.20
5.23
2.54

4.1%
4.6%
-5.0% -12.6%
2.7%
2.9%

5.1%
-5.0%
4.0%

31.3
45.3
37.4

27.3
37.1
34.8

6.1%
0.0%
4.7%

6.5%
0.0%
5.0%

31.1

32.7

23,332

17.4

16.0

-5.9%

1.18

1.14

8.5%

6.7%

6.8%

12.3

11.8

3.1%

3.2%

384.0
1,024.0
630.0

200.0
859.6
652.4

6,204
6,395
6,787
19,385

28.7
32.2
16.9
21

28.1
28.5
16.7
23

7.3%
9.7%
5.7%
-4.6%

3.30
3.05
1.42
1.96

2.60
2.79
1.30
1.83

12.9%
11.3%
10.1%
9%

10.2%
9.8%
8.7%
8%

8.7%
8.6%
7.1%
7%

16.9
14.3
12.2
14.2

15.7
15.3
12.4
14.3

1.3%
0.8%
0.9%
1.0%

1.3%
0.8%
1.0%
1.0%

54,730

12.0

12.0

-2.0%

1.5

1.5

13%

12%

12%

10.3

9.9

5.9%

6.0%

Thailand
BTS Group
Bangkok Metro
Thailand- Average
Hong Kong
MTR Corp Ltd

66 HK

Japan
Kintetsu Corp
9041 JP
Odakyu Electric Railway Co9007
Ltd JP
Hankyu Hanshin Holdings Inc
9042 JP
Japan- Average
Average

SOURCES: CIMB, COMPANY REPORTS

67

Navigating Thailand2015
December 12, 2014

68

Navigating Thailand2015
December 12, 2014

Company Briefs

69

Telco - MobileThailand
December 12, 2014

Advanced Info Service


ADVANC TB / ADVA.BK

Market Cap

Avg Daily Turnover

Free Float

US$22,187m

US$38.23m

36.2%

THB728,408m

THB1,243m

2,973 m shares

Current

THB245.0

Target

THB243.0

Prev. Target

THB243.0

Up/Downside

-0.8%
Conviction|

A handicapped giant

CIMB Analyst(s)

Given the lack of spectrum auction clarity, we think that it is too early
and too risky to buy into AIS at this point. Intouch (Add, TP THB86)
offers better value (higher upside vs. identical downside) while DTAC
(Add, TP THB117) is our top Thai mobile pick.

Pisut NGAMVIJITVONG
T (66) 2 657 9226
E pisut.ng@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

6.4

19.9

-1.7

Absolute

5.2

18.4

12.4

Major shareholders

% held

Intouch Holdings Plc.


Singtel
Littledown Nominees

40.5
23.4
2.6

Show Style "View Doc Map"

AIS is in an inferior position as it


holds the least spectrum but serves
the greatest number of customers, has
a poorer regulatory cost structure and
is under pressure to migrate low-end
prepaid customers to the 3G/2.1GHz
network. All of these factors could
lead to overinvestment and lower
profitability in FY15. We keep our
estimates, DCF-based target price
(9.2% WACC) and Hold rating.

FY15 capex stays lofty


Given its limited bandwidth, AIS will
have to maintain its FY15 capex at the
FY14 level of THB40bn. Its high capex
intensity
also
implies
that
management is well prepared for the
possible delay of the spectrum auction
to beyond the Jul-Aug 15 deadline.
FY15 capex could be higher if the
spectrum auction is delayed longer
than expected, i.e. more than 6-9
months.

that there is plenty of new network


capacity to be filled up and more
marketing activities are on the cards.

Spectrum auction a critical


swing factor
Like us, the market will be confused
by the misalignment between the
junta governments digital economy
policy and the NBTCs mandate to
auction 1800MHz spectrum in
Jul-Aug 15 as planned. AIS will clearly
benefit the most if the spectrum
auctions can happen on time as AISs
bandwidth limitation will be resolved,
thus allowing it to regain its
competitiveness.

Brilliant long-term outlook

We are still upbeat about AISs longterm prospects. We expect the


competitive equilibrium to normalise
post the spectrum auction. As we see
the capex cycle peaking in FY15, AIS
will have more than sufficient network
Competition to intensify
for 3G and 4G services. Smartphone
In 3Q14, AISs subscriber migration adoption will go beyond the natural
was 88% and 3G device adoption 43%. adoption rate given the countrys
AIS continues to push harder to utilise smartphone affordability level, which
its new network capacity, capitalise on will allow AIS to monetise the
regulatory cost savings and minimise explosion in data consumption,
the possible risk of a spectrum auction leading to higher ARPU, margins, FCF
delay. Besides AIS, DTAC and True and dividends.
are doing the same thing, implying
Price Close

Financial Summary

Relative to SET (RHS)

260

114.0

240

104.0

220

94.0

200

84.0

180
40

74.0

30
Vol m

20
10
Dec-13

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

Revenue (THBm)
Operating EBITDA (THBm)
Operating EBITDA Margin
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
141,568
60,960
43.1%
34,883
11.52
16.4%
21.27
10.90
4.45%
11.96
22.17
1.2%
82.9%

Dec-13A
142,831
62,817
44.0%
36,274
12.04
4.5%
20.35
12.15
4.96%
11.87
34.94
36.7%
80.4%

Dec-14F
142,957
62,348
43.6%
34,117
11.28
(6.3%)
21.73
11.48
4.68%
12.18
29.08
68.0%
73.6%
0%
0.93

Dec-15F
148,408
67,893
45.7%
38,973
12.97
15.0%
18.89
13.11
5.35%
11.34
21.15
82.8%
81.4%
0%
0.95

Dec-16F
152,009
69,852
46.0%
43,095
14.40
11.0%
17.02
14.49
5.92%
10.81
12.92
52.8%
86.0%
0%
0.90

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Advanced Info ServiceThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
142,831
77,627
62,817
(16,186)
46,630
(1,002)
0
871
46,499
(217)
46,282
(10,008)

Dec-14F
142,957
80,744
62,348
(19,177)
43,171
(1,115)
0
590
42,646
0
42,646
(8,529)

Dec-15F
148,408
86,013
67,893
(18,610)
49,283
(977)
0
411
48,717
0
48,717
(9,743)

Dec-16F
152,009
86,472
69,852
(15,254)
54,598
(1,019)
0
289
53,868
0
53,868
(10,774)

36,274
0
0

34,117
0
0

38,973
0
0

43,095
0
0

36,274
35,790
35,790

34,117
33,527
33,527

38,973
38,562
38,562

43,095
42,806
42,806

Dec-13A
62,817

Dec-14F
62,348

Dec-15F
67,893

Dec-16F
69,852

(13,330)

6,171

1,196

11,525

1,493
(1,002)
(10,008)
39,970
(28,460)
16
328
5,696
(22,421)
3,297
0
0
(33,889)

1,309
(1,115)
(8,529)
60,183
(39,895)
0
0
76
(39,818)
4,684
0
0
(34,462)

1,020
(977)
(9,743)
59,388
(34,525)
0
0
52
(34,473)
9,530
0
0
(34,962)

891
(1,019)
(10,774)
70,475
(13,664)
0
0
37
(13,628)
(470)
0
0
(42,327)

4,683
(25,909)
(8,360)
20,846
18,551

(45)
(29,822)
(9,457)
25,049
21,480

(34)
(25,466)
(550)
34,445
25,893

(24)
(42,821)
14,026
56,377
57,866

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-14F
2,016
9,893
2,828
10,296
25,032
90,741
104
0
6,934
97,779
12,960

Dec-15F
1,466
9,542
2,816
10,421
24,245
106,655
104
0
6,934
113,694
12,960

Dec-16F
15,491
9,121
2,815
10,469
37,895
105,066
104
0
6,934
112,104
12,960

11,718
20,813
45,491
15,355

11,294
27,684
51,937
20,039

10,793
29,770
53,523
29,569

9,518
42,809
65,287
29,099

5,287
20,642
0
66,133
45,726
173
45,900

5,287
25,326
0
77,263
45,382
173
45,555

5,287
34,856
0
88,379
49,393
173
49,567

5,287
34,386
0
99,672
50,161
173
50,334

Dec-13A
0.9%
3.05%
44.0%
(5.66)
15.38
46.52
21.6%
99.0%
23.42
12.01
53.34
61.4%
67.5%

Dec-14F
0.1%
(0.75%)
43.6%
(10.42)
15.26
38.71
20.0%
100.0%
25.73
16.70
67.50
44.5%
56.5%

Dec-15F
3.8%
8.89%
45.7%
(13.81)
16.61
50.43
20.0%
100.0%
23.90
16.51
64.60
42.2%
57.8%

Dec-16F
2.4%
2.88%
46.0%
(8.94)
16.87
53.59
20.0%
100.0%
22.47
15.72
56.72
39.9%
59.2%

Dec-13A
40.86
N/A
N/A
N/A
7.8
N/A
N/A
N/A

Dec-14F
42.61
N/A
N/A
N/A
7.1
N/A
N/A
N/A

Dec-15F
43.66
N/A
N/A
N/A
7.1
N/A
N/A
N/A

Dec-16F
43.86
N/A
N/A
N/A
7.1
N/A
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


30.0

Group Mobile Subscribers (m)


Group Fixed Voice Subscribers (m)
Grp fixed brdband subscribers (m)
Group Pay TV Subs (m)
Group Mobile ARPU (US$/mth)
Grp fixed voice ARPU (US$/mth)
Grp fixed brdband ARPU (US$/mth)
Group Pay TV ARPU (US$/mth)
SOURCE: CIMB, COMPANY REPORTS

25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Dec-13A
11,473
10,264
2,865
10,363
34,965
70,023
104
0
6,934
77,061
12,960

Jan-11

Jan-12

Advanced Info Service

Jan-13

Jan-14
Jasmine International

Total Access Communication

71

Property DevelopmentThailand
December 12, 2014

Amata Corporation
AMATA TB / AMAT.BK

Market Cap

Avg Daily Turnover

Free Float

US$536.3m

US$1.84m

61.9%

THB17,606m

THB59.93m

1,067 m shares

Current

THB16.50

Target

THB14.44

Prev. Target

THB10.51

Up/Downside

-12.5%
Conviction|

Challenging outlook

CIMB Analyst(s)

We see a challenging year ahead for AMATA. Downside risks persist


given its poor land presales in FY14, slow backlog accumulation and
continued land transfer misses.

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

Relative

2.4

-0.9

-4.1

Absolute

1.2

-2.4

10.0

Major shareholders

12M

% held

Kromadit family
Thai NVDR
Itochu Management (Thailand)

30.5
5.6
4.7

Show Style "View Doc Map"

9M14 land presales and earnings were


weak due to slow land transfers; and
we remain sceptical about its ability to
meet its FY14 land presale guidance of
1,000 rai. Without one-off gains from
REIT and continued delay in the
listing of its subsidiary AVN,
near-term catalysts are limited. Hence,
we retain our Reduce call. Our target
price rises as we roll over our
valuations to 8.5x CY16 P/E (1.5 s.d.
below 5-year mean).

Slow progress in land


presales
AMATAs 9M14 land presale was
merley
330
rai
(including
Thai-Chinese Holly Group and AVN)
vs. its FY14 guidance of 1,000 rai
which does not include Holly and
AVN. 9M14 land presale from Amata
Nakorn (AN) and Amata City (AC)
was merely 145 rai, i.e. 14.5% is locked
in. AMATA expects at least another
400-500 rai of land presale from one
Chinese customer in 4Q14. It appears
that the heyday of buoyant land
presales is over and it has become
more challenging to bring the land
presales pace back to 1,000 rai/year
as a norm. Choices now for relocation
of its car manufacturing base.

Price Close

116.0

17.0

107.3

15.0

98.5

13.0

89.8

11.0
30

81.0

Vol m

20
10
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


16.50
18.10

11.90

14.44
Current

Target

Overhang
The listing of AVN has been delayed
from 4Q14 to 2H15 while that of
Amata Summit REIT has been pushed
back to 1H15. AMATA has introduced
the leasehold method for land sales in
the new B zone of AN; this appears to
cause the delay in decision making
among its new customers in buying
industrial land for manufacturing
factories.

Stay cautious
We keep our EPS estimates. 9M14
EPS was only 37% of our
below-consensus FY14 estimate. Our
model excluded one-off gains. We feel
that
the
market
has
been
over-optimistic on AMATA. We expect
a continued gap between expectations
and actual performance. Downside
risk for this year cannot be ruled out
while next years visibility is unclear.

Not a choice
Given the slowing BOI/FDI, we prefer
residential developers as they: 1) are
better positioned to benefit from
consumption stimulus measures (if
any), 2) are less affected by property
tax, given the shorter business cycle
for land holding, and 3) offer more
sustainable
earnings
visibility,
cheaper valuations and higher yields.

Financial Summary

Relative to SET (RHS)

19.0

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
5,613
2,608
1,501
1.41
86.5%
11.73
0.56
3.41%
8.07
21.25
56.7%
2.39
19.7%

Dec-13A
7,164
2,814
1,516
1.42
1.0%
11.62
0.57
3.44%
6.92
NA
56.2%
2.12
19.3%

Dec-14F
5,726
2,385
1,151
1.08
(24.1%)
15.30
0.43
2.61%
8.80
32.24
58.7%
1.95
13.3%
0%
0.88

Dec-15F
6,758
2,855
1,496
1.40
30.0%
11.77
0.56
3.40%
7.30
70.58
55.7%
1.78
15.8%
0%
1.07

Dec-16F
7,766
3,272
1,813
1.70
21.2%
9.71
0.68
4.12%
6.22
25.27
50.0%
1.60
17.4%
0%
1.16

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Amata CorporationThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
7,164
3,437
2,814
(277)
2,538
(530)
99
180
2,910
0
2,287
(359)

Dec-14F
5,726
2,767
2,385
(193)
2,192
(586)
102
198
2,289
0
1,907
(343)

Dec-15F
6,758
3,340
2,855
(232)
2,624
(619)
106
218
2,813
0
2,328
(419)

Dec-16F
7,766
3,859
3,272
(266)
3,006
(618)
109
218
3,302
0
2,715
(489)

1,928
(413)
0

1,564
(413)
0

1,909
(413)
0

2,226
(413)
0

1,516
1,516
1,516

1,151
1,151
1,151

1,496
1,496
1,496

1,813
1,813
1,813

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-14F
1,295

Dec-15F
1,026

Dec-16F
1,078

655
5,976
121
8,704
1,193
11,925
0
380
13,499
2,296

710
6,421
125
8,551
1,434
12,734
0
388
14,556
2,355

772
6,370
129
8,296
1,809
13,625
0
396
15,830
2,324

842
6,394
135
8,449
1,954
14,585
0
404
16,942
2,293

3,251
268
5,815
5,387

3,207
284
5,846
5,400

3,170
301
5,795
5,400

3,183
319
5,796
5,400

810
6,197
0
12,012
8,318
1,874
10,191

856
6,256
0
12,101
9,008
1,997
11,006

904
6,304
0
12,099
9,906
2,121
12,027

956
6,356
0
12,152
10,994
2,245
13,239

Dec-13A
27.6%
22.0%
48.0%
(5.37)
7.80
9.03
15.7%
35.5%
19.66
620.9
62.22
74.0%
17.7%

Dec-14F
(20.1%)
(19.5%)
48.3%
(6.05)
8.44
6.64
18.0%
48.8%
33.19
764.8
80.26
53.6%
13.2%

Dec-15F
18.0%
20.7%
49.4%
(6.28)
9.28
7.74
18.0%
41.5%
29.52
682.9
70.85
55.6%
15.3%

Dec-16F
14.9%
15.5%
49.7%
(6.20)
10.30
8.98
18.0%
38.0%
27.05
597.9
63.40
59.8%
16.8%

Dec-13A
4,000.0
N/A
N/A
N/A
48.0%
N/A
N/A
N/A
N/A
N/A
16.3%

Dec-14F
3,640.0
N/A
N/A
N/A
48.3%
N/A
N/A
N/A
N/A
N/A
15.1%

Dec-15F
1,560.0
N/A
N/A
N/A
49.4%
N/A
N/A
N/A
N/A
N/A
15.1%

Dec-16F
N/A
N/A
N/A
49.7%
N/A
N/A
N/A
N/A
N/A
15.1%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
2,814

Dec-14F
2,385

Dec-15F
2,855

Dec-16F
3,272

(516)
277

(7)
193

(8)
232

(8)
266

2,419
(350)
(359)
4,009
(3,363)
0

2,664
(388)
(343)
4,311
(3,523)
0

2,812
(402)
(419)
4,839
(3,850)
0

2,963
(400)
(489)
5,338
(3,817)
0

(866)
22
(4,207)
69
(0)
0
(606)

(284)
22
(3,785)
20
(0)
0
(460)

(686)
22
(4,514)
(75)
(0)
0
(598)

(822)
22
(4,617)
(25)
(0)
0
(725)

80
(458)

80
(360)

80
(594)

80
(670)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Dec-13A
1,952

Jan-11

Jan-12

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

SOURCE: CIMB, COMPANY REPORTS

73

Property DevelopmentThailand
December 12, 2014

Ananda Development
ANAN TB / ANAN.BK

Market Cap

Avg Daily Turnover

Free Float

US$351.3m

US$3.45m

39.5%

THB11,532m

THB111.8m

3,333 m shares

Current

THB3.46

Target

THB4.83

Prev. Target

THB4.22

Up/Downside

39.6%
Conviction|

Compelling growth outlook

CIMB Analyst(s)

We continue to rate ANAN an Add for its stronger earnings visibility,


backed by a solid presales backlog, sustainable gross margin and
better SG&A control. We roll forward our target price, which raises it
to THB4.83 (10x CY16 P/E, on par with 5-year mean).

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-2.7

-10.7

61.5

Absolute

-3.9

-12.2

75.6

Major shareholders

% held

Ruangkritya family
HSBC Bangkok
Standard Chartered Bank (Thai) PCL

60.0
8.6
6.4

Show Style "View Doc Map"

ANAN offers compelling EPS growth


of 15-32% for FY14-16, attractive
valuations vs. peers, a solid balance
sheet
and
consistent
dividend
payment. We view it as one of the
promising long-term investments in
the residential development arena.
Near-term catalysts include strong
4Q14 presales and earnings.

Ambitious business targets


After reporting 9M14 earnings, ANAN
set
new
FY14
targets
of
THB9.5bn-10.5bn (prev THB9.2bn)
revenue
and
THB19.5bn-20.5bn
presales (up 73%). Total new launches
for FY14 amounted to THB14.9bn,
coming from four condo projects.
ANAN expects further growth in FY15,
targeting revenue of THB12bn-12.5bn
(+23% yoy) and presales of
THB22.5bn-23.5bn (+14% yoy). New
launches in FY15 are budgeted at
THB28.5bn-29.5bn for 12 new sites
(condo THB26.3bn, SDH THB2.7bn).

Price Close

194

3.30

154

2.30

114

1.30
300

74

Vol m

200
100
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range

 


Current

Target

Compelling FY15 growth


We project FY15-16 EPS growth of
30-32%, even stronger than the 16%
we estimate for FY14, thanks to
continued strong presales that keep
beating the companys guidance and a
solid backlog with a low cancellation
rate of 1.5% and mortgage rejection
rate of 11%. A sustainable gross
margin of 36% and lower SG&A ratio
due to rising economies of scale will
also help support bottomline growth.

Attractive investment
ANANs P/Es have become more
attractive, at 9.7x CY15 and 7.4x CY16
compared to the peer average of 10x
for CY15 and 9x for CY16 even though
ANAN offers compelling FY15-16 EPS
growth of 30% compared to the peer
average of 16-22%. In addition, ANAN
plans to maintain its yearly dividend
payout.

Financial Summary

Relative to SET (RHS)

4.30

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
5,131
502
(199)
(0.07)
(54.4%)
NA
0.00%
18.58
NA
1.8%
2.27
(8.0%)

Dec-13A
9,202
1,493
812
0.24
NA
14.21
0.050
1.45%
9.00
9.59
32.3%
1.96
14.8%

Dec-14F
9,052
1,773
938
0.28
15.6%
12.30
0.051
1.47%
9.16
NA
70.6%
1.73
15.0%
0%

Dec-15F
12,078
2,326
1,222
0.37
30.3%
9.44
0.061
1.77%
7.26
15.44
68.0%
1.46
16.8%
0%

Dec-16F
13,164
2,896
1,610
0.48
31.7%
7.16
0.081
2.33%
5.91
43.27
58.8%
1.21
18.5%
0%

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Ananda DevelopmentThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
9,202
3,461
1,493
(356)
1,137
(18)
(94)
0
1,024

Dec-14F
9,052
3,184
1,773
(437)
1,336
(152)
(40)
0
1,144

Dec-15F
12,078
4,245
2,326
(534)
1,792
(225)
(40)
0
1,528

Dec-16F
13,164
4,629
2,896
(606)
2,289
(446)
291
(122)
2,013

1,024
(213)

1,144
(206)

1,528
(306)

2,013
(403)

812

938

1,222

1,610

812
812
812

938
938
938

1,222
1,222
1,222

1,610
1,610
1,610

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-14F
1,300

Dec-15F
1,797

Dec-16F
1,161

351
7,912
629
11,202
660
0
59
561
1,280
0
2,654
1,004
1,358
5,016
1,552

675
10,400
1,405
13,780
650
0
95
685
1,430
1,000
0
370
2,080
3,450
5,000

151
13,354
1,362
16,664
580
0
120
251
951
650
0
381
2,106
3,138
6,500

151
15,157
1,488
17,957
550
0
120
254
924
250
0
393
2,134
2,776
6,500

34
1,587
0
6,603
5,879

100
5,100
0
8,550
6,660

100
6,600
0
9,738
7,878

100
6,600
0
9,376
9,504

5,879

6,660

7,878

9,504

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
1,493
0
(1,592)
356
0
0
351
(112)
(213)
(73)
(528)
0
0
0
(250)
(778)
2,054
(4)
0
(167)
0
(782)
1,102

Dec-14F
1,773
0
(3,445)
437
0
0
803
(192)
(206)
(1,268)
(400)
0
0
0
(260)
(660)
1,794
322
0
(169)
0
(150)
1,797

Dec-15F
2,326
0
(2,419)
534
0
0
772
(265)
(306)
109
(352)
0
0
0
(160)
(512)
1,150
0
0
(204)
0
(583)
363

Dec-16F
2,896
0
(1,792)
606
0
0
807
(277)
(403)
1,231
(405)
0
0
0
(160)
(565)
(400)
0
0
(268)
0
(583)
(1,251)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0

Jan-11

Jan-12

Dec-13A
79.8%
198%
16.3%
(0.57)
1.76
10.13
20.8%
20.5%
7.41
23,845
2,350
16.6%
13.4%

Dec-14F
(1.3%)
19%
19.6%
(1.41)
2.00
6.96
18.0%
18.0%
20.69
583
44
13.7%
11.8%

Dec-15F
33.4%
31%
19.3%
(1.61)
2.36
6.77
20.0%
16.7%
12.48
564
18
12.5%
13.0%

Dec-16F
9.0%
24%
22.0%
(1.68)
2.85
8.27
20.0%
16.7%
4.20
623
17
13.7%
14.7%

Dec-13A
6,774.0
N/A
N/A
N/A
37.8%
N/A
N/A
N/A
N/A
N/A
-23.2%

Dec-14F
6,356.0
N/A
N/A
N/A
35.2%
N/A
N/A
N/A
N/A
N/A
-20.0%

Dec-15F
6,764.0
N/A
N/A
N/A
35.2%
N/A
N/A
N/A
N/A
N/A
-20.0%

Dec-16F
6,734.0
N/A
N/A
N/A
35.2%
N/A
N/A
N/A
N/A
N/A
-20.0%

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

0.0
Jan-10

Dec-13A
2,309

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

SOURCE: CIMB, COMPANY REPORTS

75

Property DevelopmentTHAILAND
December 12, 2014

AP (Thailand) PCL
AP TB / AP.BK

Market Cap

Avg Daily Turnover

Free Float

US$594.5m

US$3.42m

64.2%

THB19,505m

THB111.6m

2,868 m shares

Current

THB6.20

Target

THB9.72

Prev. Target

THB9.72

Up/Downside

56.8%
Conviction|

Even brighter outlook

CIMB Analyst(s)

We continue to rate AP an Add as we like the clearer plans for its JV


contribution and new launches as well as its stronger growth of
18-20% in FY15-16. We roll forward our target price, which raises it to
THB9.72, based on 9x CY16 P/E (0.5 s.d above 5-year mean).

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-4.0

-5.7

28.8

Absolute

-6.8

-9.1

Major shareholders

40.3
% held

Anuphong Asavabhokhin
Thai NVDR
Pichet vipavasuphakorn

23.6
10.8
9.3

Show Style "View Doc Map"

We think that AP deserves a re-rating


due to its more compelling EPS
growth, ongoing JV projects with its
Japanese partner and stronger
balance sheet. Its valuation is
undemanding at 6-7x CY15-16 P/E
compared to the 9-10x peer average.

Promising growth outlook


Given APs new guidance and clearer
timeline for JV project contribution to
earnings, we recently raised our EPS
forecasts for FY14-16. We see higher
sales growth, thanks to (1) a recovery
in TH/SDH sales (back to normal
after
political
disruption),
(2)
continuously expanding condo sales,
(3) solid presales backlog worth
THB20bn and sizeable quality unsold
WIP condo inventory worth THB12bn
(additional support for revenue
booking up to FY16), (4) continuous
JV projects which will enhance shared
income, (5) sustainable gross margin

Price Close

151.2

6.40

135.7

5.40

120.1

4.40

104.6

3.40
80

89.0

60
Vol m

40
20
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

of around 34% and (6) improving


SG&A ratio. We project EPS growth of
20% in FY15 and 18% in FY16. Based
on the presales backlog, 13-34% of our
FY15-16 EPS estimates are in the bag.

Cheap with decent growth


APs efforts at rebranding and product
innovation in the past few years have
started to pay off. Stronger customer
confidence led to a higher take-up rate
over 90% of its new condominium
project launch. We expect AP to
record compelling earnings growth of
18-20% during FY15-16, thanks to its
JV contribution and a continuously
strengthening balance sheet with net
gearing falling from 0.8x in FY14 to
0.6x in FY16. APs cheap valuation
with upside over 50% and dividend
yield of 5-7% are more attractive than
its peers.

Financial Summary

Relative to SET (RHS)

7.40

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
17,310
3,080
2,186
0.76
40.4%
8.12
0.32
5.24%
4.62
30.12
80.9%
1.42
18.9%

Dec-13A
19,989
2,943
2,016
0.70
(7.8%)
8.82
0.25
4.08%
4.58
13.93
94.0%
1.27
15.2%

Dec-14F
21,619
3,262
2,197
0.77
9.0%
8.09
0.31
4.94%
4.27
NA
80.9%
1.07
14.4%
0%
1.01

Dec-15F
23,768
3,822
2,631
0.92
19.8%
6.76
0.37
5.92%
3.78
34.47
69.6%
0.97
15.0%
0%
1.12

Dec-16F
25,659
4,253
3,098
1.08
17.7%
5.74
0.43
6.97%
3.42
26.71
59.2%
0.87
16.0%
0%
1.25

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

AP (Thailand) PCLThailand
December 12, 2014

Profit & Loss

Balance Sheet

(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-13A
19,989
6,750
2,943
(169)
2,774
(298)
1
73
6,357
5
2,555
(539)

Dec-14F
21,619
7,316
3,262
(161)
3,101
(149)
(100)
(80)
6,826
0
2,771
(574)

Dec-15F
23,768
8,090
3,822
(177)
3,645
(151)
(100)
(80)
7,582
0
3,314
(683)

Dec-16F
25,659
8,732
4,253
(191)
4,062
(311)
45
65
8,340
0
3,861
(763)

2,016
0
0

2,197
0
0

2,631
0
0

3,098
0
0

2,016
2,016
2,016

2,197
2,197
2,197

2,631
2,631
2,631

3,098
3,098
3,098

Dec-13A
2,943

Dec-14F
3,262

Dec-15F
3,822

Dec-16F
4,253

(3,731)

(3,916)

(1,177)

(1,364)

(414)
0
(691)
(1,893)
(80)
0

1,542
0
(539)
348
(86)
0

(680)
0
(574)
1,391
(95)
0

(1,065)
0
(683)
1,141
(103)
0

0
103
23
3,147
0
0
(726)

0
(53)
(140)
(322)
0
0
(879)

0
(22)
(117)
(758)
0
0
(1,053)

0
(23)
(126)
(350)
0
0
(1,239)

582
(1,228)

582
(1,007)

Cash Flow

Dec-14F
1,666

Dec-15F
1,578

Dec-16F
1,922

110
30,784
0
33,158
129
0
0
1,123
1,252
5,059

80
34,001
0
35,746
165
0
0
722
888
5,100

84
35,174
0
36,835
174
0
0
751
925
4,300

88
36,534
0
38,543
182
0
0
782
965
3,500

1,291
3,318
9,668
10,371

562
4,102
9,764
10,008

563
4,235
9,098
10,050

563
4,287
8,350
10,500

364
10,735
0
20,403
14,007
0
14,007

254
10,262
0
20,026
16,609
0
16,609

254
10,304
0
19,402
18,362
0
18,362

254
10,754
0
19,104
20,407
0
20,407

Dec-13A
15.5%
11.8%
33.8%
(4.59)
4.88
22.50
21.1%
12.5%
2.00
789.6
28.49
(65.9%)
24.3%

Dec-14F
8.2%
8.4%
33.8%
(4.69)
5.79
28.70
20.7%
14.1%
1.60
826.7
23.61
(59.8%)
23.4%

Dec-15F
9.9%
10.6%
34.0%
(4.45)
6.40
31.51
20.6%
15.3%
1.25
805.2
13.04
(60.1%)
24.6%

Dec-16F
8.0%
7.9%
34.0%
(4.21)
7.12
32.11
19.8%
16.4%
1.22
775.2
12.11
(62.6%)
25.5%

Dec-13A
13,086.0
N/A
N/A
N/A
33.8%
N/A
N/A
N/A
N/A
N/A
19.9%

Dec-14F
8,330.0
N/A
N/A
N/A
33.8%
N/A
N/A
N/A
N/A
N/A
19.5%

Dec-15F
7,021.0
N/A
N/A
N/A
34.0%
N/A
N/A
N/A
N/A
N/A
18.7%

Dec-16F
7,021.0
N/A
N/A
N/A
34.0%
N/A
N/A
N/A
N/A
N/A
18.2%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

(406)
2,016

1,440
239

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)
SOURCE: CIMB, COMPANY REPORTS

35.0
30.0
25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Dec-13A
2,264

Jan-11

Jan-12

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

77

AirlinesThailand
December 12, 2014

Asia Aviation PCL


AAV TB / AAV.BK

Market Cap

Avg Daily Turnover

Free Float

US$688.4m

US$2.24m

40.0%

THB22,601m

THB72.97m

4,850 m shares

Current

THB4.66

Target

THB2.20

Prev. Target

THB2.20

Up/Downside

-52.8%
Conviction|

Worsening domestic competition

CIMB Analyst(s)

AAV is at the centre of what is expected to be rising competition in the


domestic aviation space that will likely depress ticket prices. But AAV
may be rescued by the unexpectedly sharp fall in oil prices, if the
current levels sustain for a longer period of time.

Raymond YAP, CFA


T (60) 3 2261 9072
E raymond.yap@cimb.com

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

9.1

-0.6

-9.1

Absolute

7.9

-2.1

5.0

Major shareholders

% held

Tassapon Bijleveld
Other management

33.0
27.0

Show Style "View Doc Map"

Still, we maintain our Reduce call and


recommend investors to look at other
regional names with better underlying
prospects apart from just the oil price,
such as AirAsia and Cebu Air. Our
target price is based on CY16 P/E of
14x. De-rating catalysts include rising
pressure on domestic ticket prices.

respond with attractive fares of their


own. This means that the price
environment in the domestic Thai
aviation market will probably worsen
in 2015. About 60% of Thai AirAsias
seat capacity is deployed within the
domestic markets.

Competition to increase

Partially offsetting the expected


weaker domestic pricing environment
is the likely but gradual recovery in
tourist traffic from the Asian region.
So far, the recovery has been slower
than expected, but should pick up
pace in 2015, in our view. This will
help AAV improve the financial
performance of its international
routes next year.

Domestic
capacity
ex-Bangkok
Suvarnabhumi (BKK) and ex-Don
Muang (DMK) airports is expected to
rise 17.4% yoy between January 2014
and January 2015, on top of the 34%
yoy increase during 2013 and the 13%
increase during 2012, mainly due to
expansion by Thai Lion Air. In
addition, Thai VietJet is expected to
launch flights in December 2014, and
its two A320s could contribute around
5,000 additional seats per week to the
domestic market. If we put this
additional 5,000 seats into the first
week of January 2015, domestic seat
capacity from Bangkok could rise a
staggering 19% yoy.
Thai Lion Air is also expected to
double its fleet in 2015 to 20 planes.
The new entrants are likely to offer
very attractive fares to entice
passengers to try their services, and in
the process, force the incumbents to
Price Close

105.0

4.70

97.5

4.20

90.0

3.70

82.5

3.20

75.0

Source: Bloomberg

52-week share price range


4.66
4.92

2.20
Current

Target

Tourist traffic to recover

Oil prices very helpful


We have assumed an average jet fuel
price of US$110/barrel for FY15-16 in
our forecasts, against the current
price of below US$90. A US$10/bbl
lower jet fuel price can lift AAVs
earnings by 75%. Clearly, if the jet fuel
prices sustain at present levels, there
will be upside to our numbers. Even
so, we prefer cleaner buy ideas from
our universe of airline picks in the
region.

Financial Summary

Relative to SET (RHS)

5.20

3.42

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
16,103
1,295
15,513
0.26
37%
17.66
0%
22.02
41.9
(7.5%)
1.23
14.0%

Dec-13A
23,485
2,357
1,043
0.28
6%
16.64
0%
15.32
NA
23.2%
1.17
7.2%

Dec-14F
25,691
(93)
(300)
(0.03)
(111%)
NA
0%
NA
NA
41.3%
1.19
(0.8%)
0%

Dec-15F
30,172
1,841
467
0.13
NA
36.62
0%
24.28
460.2
54.3%
1.16
3.2%
0%

Dec-16F
33,976
2,441
618
0.16
24%
29.43
0%
19.86
56.9
63.8%
1.12
3.9%
0%

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Asia Aviation PCLThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
23,485
2,357
2,357
(406)
1,951
(9)
0
671
2,612
(53)
2,559
(651)

Dec-14F
25,691
(93)
(93)
(667)
(760)
(138)
0
445
(453)
0
(453)
(92)

Dec-15F
30,172
1,841
1,841
(881)
960
(245)
0
508
1,223
0
1,223
(374)

Dec-16F
33,976
2,441
2,441
(1,119)
1,322
(337)
0
572
1,557
0
1,557
(434)

1,908
(865)

(545)
245

849
(382)

1,124
(506)

1,043
1,358
1,358

(300)
(150)
(150)

467
617
617

618
768
768

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow
Dec-13A
2,357

Dec-14F
(93)

Dec-15F
1,841

Dec-16F
2,441

(2,408)

(49)

(83)

(42)

4,202
(167)
(292)
3,692
(1,904)
(3,452)

847
(270)
(92)
343
(4,160)
0

967
(352)
(374)
1,999
(5,480)
0

1,116
(440)
(434)
2,641
(5,480)
0

118
(5,238)
(269)
0

(528)
(4,688)
3,084
0

0
(5,480)
3,530
0

0
(5,480)
3,236
0

0
(167)
(436)
(1,982)
(1,815)
(1,379)

0
(270)
2,814
(1,531)
(1,261)
(4,075)

0
(352)
3,179
(303)
49
(3,129)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Dec-15F
139
1,042
92
4,944
6,217
19,048
528
23,694
2,469
45,738
1,000

Dec-16F
95
1,173
103
4,944
6,315
23,409
528
23,694
2,469
50,100
1,000

784
5,873
7,272
7,546

805
5,873
7,678
10,245

885
5,873
7,757
13,775

985
5,873
7,857
17,011

3,443
10,988
0
18,260
19,346
7,329
26,675

3,443
13,688
0
21,365
19,046
7,084
26,130

3,443
17,218
0
24,975
19,513
7,466
26,980

3,443
20,454
0
28,311
20,131
7,972
28,103

Dec-13A
45.8%
82%
10.0%
(1.28)
3.99
11.41
25.4%
NA
8.57
1.28
3.92
6%
6.71%

Dec-14F
9.4%
(104%)
(0.4%)
(2.23)
3.93
(2.81)
0.0%
NA
10.76
1.23
3.28
(2%)
(1.74%)

Dec-15F
17.4%
NA
6.1%
(3.02)
4.02
2.73
30.6%
NA
10.41
1.14
2.52
2%
2.70%

Dec-16F
12.6%
33%
7.2%
(3.69)
4.15
3.00
27.8%
NA
10.64
1.13
2.51
2%
3.25%

Dec-13A
23.4%
25.7%
83.6%
2.2
1.8
16.9
7.3
6.6
35

Dec-14F
22.8%
17.4%
80.0%
2.0
1.6
17.0
7.6
6.3
122.0
40

Dec-15F
13.4%
14.2%
80.5%
2.1
1.7
16.6
7.2
6.4
115.0
45

Dec-16F
12.5%
12.4%
80.5%
2.1
1.7
16.5
7.2
6.4
115.0
50

0
(440)
2,796
(43)
397
(2,399)

12-month Forward Rolling FD P/E (x)

Key Drivers

50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0

Av. Seat Km (ASK, Yoy Chg %)


Rev. Psg Km (RPK, Yoy Chg %)
Passenger Load Factor (%)
Pax yld per RPK (THB)
Pax rev. per ASK (THB)
Total Cost Per ATK (THB)
Fuel Cost Per ATK (THB)
Non-fuel Cost Per ATK (THB)
Jet Fuel Price (US$/barrel)
Fleet Size (no. Of Planes)

AirAsia Bhd

Dec-14F
441
887
84
4,944
6,356
14,449
528
23,694
2,469
41,140
1,000

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Jan-10

Dec-13A
1,972
811
90
4,944
7,817
10,956
0
23,694
2,469
37,118
615

Jan-11

Jan-12
AirAsia X Bhd

Jan-13

Jan-14

Asia Aviation PCL

Cebu Air

SOURCE: CIMB, COMPANY REPORTS

79

BanksThailand
December 12, 2014

Bangkok Bank
BBL TB / BBL.BK

Market Cap

Avg Daily Turnover

Free Float

US$11,600m

US$31.49m

95.0%

THB380,814m

THB1,024m

1,909 m shares

Current

THB199.5

Target

THB203.0

Prev. Target

THB200.0

Up/Downside

1.8%
Conviction|

Cheap for a reason

CIMB Analyst(s)

Weerapat WONK-URAI
T (66) 2 657 9224
E weerapat.wo@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

1.2

-5.3

-6.3

Absolute

0.0

-6.8

7.8

Major shareholders

% held

Sophonpanich family

4.2

Show Style "View Doc Map"

We believe that BBLs undemanding valuation will persist with its


conventional banking platform. Its share price has also consistently
underperformed that of the other large banks. The reverse trend could
have emerged if BBL had transitioned to become a more aggressive
financial institution.
Upon transfer of coverage, we project
BBLs loan growth for 2015 to be on
par with that of sector. Its lending
business is mainly driven by large
corporate and large-sized SME loans.
Our GGM-based target price is
derived from 1.13x FY15 P/BV,
assuming 12% long-term-ROE and
11.2% COE. Our Hold rating is
premised on its cheap valuation and
attractive dividends.

No exceptional growth
Its credit growth over the last two
years has been slower than its large
bank peers, and we believe this trend
will continue. We forecast an FY15
loan growth of 8%. Growth drivers
will mainly come from wholesale
banking which should benefit from
government spending in FY15. Going
forward, we believe BBLs top line
growth will not deviate from the past
trend due to its rather dated business
model. For example, BBL does not
focus
on
the
private
wealth
management of its retail customers.
As such, the bank loses the
opportunity tap on the rising wealth

Price Close

107.0

210.0

104.0

200.0

101.0

190.0

98.0

180.0

95.0

170.0

92.0

160.0
30

89.0

Vol m

20
10
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

of these customers. We forecast an


FY15 non-NII growth of 7.4% for BBL,
lower than that of its peers at 10%.

Outlook
Although it is perceived that BBL will
be one of the key beneficiaries of
public and private investments in
2015, we think that the bank is losing
market share in business lending to
its peers. In addition, BBLs
cross-selling efforts have not been
improved to reap the benefits of its
full-scale banking services. This is a
result of its conservative management
style that includes BBLs high
provisioning policy. On the flip side,
BBLs good asset quality and highest
NPL coverage ratio (LLR/NPL ratio of
244%) are the banks strong points.
Its NPL ratio has not been materially
impacted from the rising household
debt of retail customers as it does not
participate in auto hire purchase
lending.

Worth a Hold rating


BBLs undemanding valuation of 10x
P/E and 1.11x P/BV for FY15 reflects
its lower-than-peer ROE of 11.5%.

Financial Summary

Relative to SET (RHS)

220.0

Dec-13

Net Interest Income (THBm)


Total Non-Interest Income (THBm)
Operating Revenue (THBm)
Total Provision Charges (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
BVPS (THB)
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
54,953
30,458
85,411
(7,248)
31,848
16.68
16.5%
11.96
6.50
3.26%
143.3
1.39
12.3%

Dec-13A
55,879
35,579
91,457
(8,593)
35,906
18.81
12.7%
10.61
6.50
3.26%
155.0
1.29
12.6%

Dec-14F
58,138
38,152
96,290
(10,000)
35,589
18.64
(0.9%)
10.70
7.46
3.74%
166.8
1.20
11.6%
(2.04%)
0.96

Dec-15F
59,300
40,973
100,273
(8,500)
38,115
19.97
7.1%
9.99
7.99
4.00%
179.5
1.11
11.5%
(5.13%)
0.93

Dec-16F
63,387
45,255
108,642
(8,850)
41,818
21.91
9.7%
9.11
8.76
4.39%
193.3
1.03
11.8%
(5.72%)
0.91

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Bangkok BankThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Net Interest Income
Total Non-Interest Income
Operating Revenue
Total Non-Interest Expenses
Pre-provision Operating Profit
Total Provision Charges
Operating Profit After Provisions
Pretax Income/(Loss) from Assoc.
Operating EBIT (incl Associates)
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Consolidation Adjustments & Others
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX And Other Adj.
Net Profit
Recurring Net Profit

Dec-13A
55,879
35,579
91,457
(37,947)
53,510
(8,593)
44,917
0
44,917
0
44,917

Dec-14F
58,138
38,152
96,290
(41,490)
54,800
(10,000)
44,800
0
44,800
0
44,800

Dec-15F
59,300
40,973
100,273
(43,794)
56,480
(8,500)
47,980
0
47,980
0
47,980

Dec-16F
63,387
45,255
108,642
(47,150)
61,491
(8,850)
52,641
0
52,641
0
52,641

44,917
(8,882)

44,800
(8,960)

47,980
(9,596)

52,641
(10,528)

36,035
(130)
0
0
35,906
35,906

35,840
(251)
0
0
35,589
35,589

38,384
(269)
0
0
38,115
38,115

42,113
(295)
0
0
41,818
41,818

(THBm)
Total Gross Loans
Liquid Assets & Invst. (Current)
Other Int. Earning Assets
Total Gross Int. Earning Assets
Total Provisions/Loan Loss Reserve
Total Net Interest Earning Assets
Intangible Assets
Other Non-Interest Earning Assets
Total Non-Interest Earning Assets
Cash And Marketable Securities
Long-term Investments
Total Assets
Customer Interest-Bearing Liabilities
Bank Deposits
Interest Bearing Liabilities: Others
Total Interest-Bearing Liabilities
Bank's Liabilities Under Acceptances
Total Non-Interest Bearing Liabilities
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Balance Sheet Employment


Dec-13A
90.8%
89.3%
32.9%
33.6%
64.1%
80.8%
22.1%
72.8%
0.51%
0.343%
0.143%

Dec-14F
91.8%
91.3%
32.4%
33.0%
63.9%
81.3%
23.7%
72.8%
0.57%
0.385%
0.151%

Dec-15F
92.7%
92.2%
31.9%
32.4%
65.1%
82.1%
23.5%
74.1%
0.47%
0.318%
0.124%

Dec-16F
91.8%
92.2%
31.0%
31.5%
65.9%
82.2%
23.2%
74.9%
0.45%
0.310%
0.121%

Total Income Growth


Operating Profit Growth
Pretax Profit Growth
Net Interest To Total Income
Cost Of Funds
Return On Interest Earning Assets
Net Interest Spread
Net Interest Margin (Avg Deposits)
Net Interest Margin (Avg RWA)
Provisions to Pre Prov. Operating Profit
Interest Return On Average Assets
Effective Tax Rate
Net Dividend Payout Ratio

Dec-15F
2,317,624
396,244
7
2,713,875
(103,829)
2,610,046
0
97,195
97,195
47,239
0
2,754,480
2,047,963
136,924
143,215
2,328,102
2,134
81,538
2,411,775
342,584
121
342,705

Dec-16F
2,497,824
406,150
7
2,903,981
(109,215)
2,794,766
0
98,924
98,924
63,035
0
2,956,726
2,242,520
130,078
139,486
2,512,084
2,177
73,398
2,587,658
368,943
123
369,066

Dec-13A
7.08%
10.9%
9.5%
61.1%
2.08%
4.08%
2.01%
2.96%
3.10%
16.1%
2.23%
19.8%
27.7%

Dec-14F
5.28%
2.4%
(0.3%)
60.4%
2.10%
4.08%
1.99%
3.02%
3.08%
18.2%
2.24%
20.0%
32.0%

Dec-15F
4.14%
3.1%
7.1%
59.1%
2.14%
4.08%
1.94%
2.99%
3.02%
15.0%
2.22%
20.0%
32.0%

Dec-16F
8.35%
8.9%
9.7%
58.3%
2.14%
4.10%
1.96%
2.95%
2.98%
14.4%
2.22%
20.0%
32.0%

Dec-13A
9.2%
2.3%
16.8%
41.5%
2.4%
217.1%
0.0%
14.4%
16.9%
5.5%
86.0%
2.4%
11.1%

Dec-14F
0.0%
2.3%
7.2%
43.1%
2.3%
244.4%
0.0%
15.6%
18.0%
-1.1%
86.6%
2.3%
6.9%

Dec-15F
8.0%
2.2%
7.4%
43.7%
2.2%
248.5%
0.0%
15.6%
17.8%
7.0%
87.6%
2.2%
14.6%

Dec-16F
8.5%
2.3%
10.5%
43.4%
2.2%
246.5%
0.0%
15.6%
17.6%
9.5%
86.9%
2.2%
15.1%

Key Drivers

12-month Forward Rolling FD P/E (x)


14.00

Loan Growth (%)


Net Interest Margin (%)
Non Interest Income Growth (%)
Cost-income Ratio (%)
Net NPL Ratio (%)
Loan Loss Reserve (%)
GP Ratio (%)
Tier 1 Ratio (%)
Total CAR (%)
Deposit Growth (%)
Loan-deposit Ratio (%)
Gross NPL Ratio (%)
Fee Income Growth (%)

12.00

10.00
8.00
6.00
4.00
2.00

Jan-11

Dec-14F
2,172,897
392,321
7
2,565,224
(98,655)
2,466,570
0
93,009
93,009
37,679
0
2,597,258
1,913,984
126,782
147,071
2,187,837
2,092
88,726
2,278,655
318,484
118
318,602

Key Ratios

Gross Loans/Cust Deposits


Avg Loans/Avg Deposits
Avg Liquid Assets/Avg Assets
Avg Liquid Assets/Avg IEAs
Net Cust Loans/Assets
Net Cust Loans/Broad Deposits
Equity & Provns/Gross Cust Loans
Asset Risk Weighting
Provision Charge/Avg Cust Loans
Provision Charge/Avg Assets
Total Write Offs/Average Assets

0.00
Jan-10

Dec-13A
2,164,871
377,413
7
2,542,290
(92,583)
2,449,707
0
93,249
93,249
53,550
0
2,596,507
1,935,272
124,296
151,057
2,210,625
2,051
87,779
2,300,456
295,936
116
296,052

Jan-12

Jan-13

Jan-14

Bangkok Bank

Kasikornbank

Krung Thai Bank

Siam Commercial Bank

SOURCE: CIMB, COMPANY REPORTS

81

HospitalsThailand
December 12, 2014

Bangkok Chain Hospital


BCH TB / BCH.BK

Market Cap

Avg Daily Turnover

Free Float

US$676.0m

US$1.03m

38.4%

THB22,194m

THB33.56m

2,494 m shares

Current

THB8.90

Target

THB9.30

Prev. Target

THB9.30

Up/Downside

4.5%
Conviction|

No pain, no gain

CIMB Analyst(s)

The opening of Karunvej Hospital may stir some concern over start-up
losses. We believe that a further improvement at BCHs World Medical
Centre (WMC) will more than offset Karunvejs start-up loss. This is the
price BCH has to pay to grow its network.

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-2.1

-12.9

23.9

Absolute

-3.3

-14.4

38.0

Major shareholders

% held

Harnphanich family
BGH

49.8
1.5

Show Style "View Doc Map"

There may be no catalysts in the near


future but we believe that investors
will look for a turnaround at WMC in
2H15 as it is expected to be close to
breakeven in FY16. We maintain our
Hold rating for now with an
unchanged target price of THB9.30,
based on 31x CY16 P/E, still 1 s.d.
above its 5-year historical average.

Loss at WMC to decline


We believe that WMC will reduce its
losses from about THB220m in FY14
to THB130m in FY15 and approach
breakeven in FY16. If our expectation
materialises, the market will feel relief
as losses at WMC have been a big drag
on BCHs earnings over the past
couple of years. The hospital was
opened at the end of 1Q13.
Admittedly, the take-off of WMC has
been slower than expected as it is the
first high-end medical facility for BCH
whose strength lies in the mid- and
low-end. While cost control is the key
success factor for the low-end,
especially for those servicing Social
Security Scheme (SSS) patients, the
number of well-known doctors,
service quality and high-tech medical

Vol m

Price Close

158

10.1

146

9.1

135

8.1

123

7.1

111

6.1

100

5.1
50
40
30
20
10

88

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


8.90
10.80

5.65

9.30
Current

Target

equipment are more important for the


high-end ones.

Concern at new Karunvej


Hospital?
BCH
will
open
Karunvej
Ratanathibeth in the western part of
Bangkok in 1H15. This low-end,
100-bed hospital is expected to incur
THB100m loss in FY15 and approach
breakeven in late 2016. The new
hospital will cater mainly to SSS
patients. As the loss in its first year
should be more than offset by the
improvement at WMC, we are not too
worried about this.

Strong balance sheet


BCH has a strong balance sheet with a
net gearing of about 65%. It is
expected to generate about THB1.2bn
operational cashflow in FY15 and
THB1.4bn in FY16. There are,
therefore, more than sufficient funds
for its expansion programme if it
decides to grow more quickly.

Financial Summary

Relative to SET (RHS)

11.1

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
4,466
1,352
908.3
0.46
23.7%
19.55
0.43
4.83%
14.30
86.1
28.5%
4.88
26.5%

Dec-13A
4,702
1,005
585.2
0.26
(42.7%)
34.13
0.16
1.80%
23.11
141.8
59.0%
5.60
15.4%

Dec-14F
5,002
961
501.6
0.20
(22.9%)
44.25
0.12
1.36%
27.02
NA
63.4%
5.33
12.3%
0%

Dec-15F
5,502
1,186
645.1
0.26
28.6%
34.40
0.13
1.45%
22.34
106.9
65.5%
4.94
14.9%
0%

Dec-16F
6,052
1,361
748.1
0.30
16.0%
29.67
0.15
1.69%
20.51
112.2
80.7%
4.56
16.0%
0%

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Bangkok Chain HospitalThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
4,796
1,605
1,005
0
1,005
(106)
0
0
899
0
899
(178)

Dec-14F
5,095
1,643
961
0
961
(153)
0
0
808
0
808
(162)

Dec-15F
5,599
1,858
1,186
0
1,186
(177)
0
0
1,009
0
1,009
(202)

Dec-16F
6,155
2,100
1,361
0
1,361
(207)
0
0
1,154
0
1,154
(231)

721
(136)

647
(145)

807
(162)

923
(175)

585
585
585

502
502
502

645
645
645

748
748
748

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
1,345
722
164
43
2,274
7,427
2
274
47
7,750
725

Dec-14F
960
830
167
45
2,002
8,169
0
225
35
8,429
738

Dec-15F
1,103
955
170
46
2,274
8,986
0
225
35
9,246
782

Dec-16F
1,096
1,050
174
47
2,368
10,784
0
200
40
11,024
821

523
568
1,815
3,300

559
573
1,870
3,300

598
579
1,959
3,800

640
585
2,046
5,000

369
3,669
0
5,484
3,966
574
4,539

406
3,706
0
5,576
4,166
688
4,855

447
4,247
0
6,206
4,489
826
5,315

492
5,492
0
7,537
4,863
991
5,854

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
1,005

Dec-14F
961

Dec-15F
1,186

Dec-16F
1,361

(35)

(58)

(28)

(106)
(178)
1,232
(2,457)

(153)
(162)
611
(663)

(177)
(202)
749
(818)

(207)
(231)
895
(1,771)

(536)
(54)
(3,047)
1,957
499

(92)
(1)
(756)
25
(0)

(283)
1
(1,099)
558
(0)

(179)
(1)
(1,951)
1,254
(0)

(399)

(301)

(323)

(374)

150
2,206
391
141
(1,709)

115
(161)
(306)
(119)
8

138
373
23
208
(173)

165
1,045
(11)
198
(849)

510

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Dec-13A
5.3%
(25.7%)
21.4%
(1.07)
1.59
9.5
19.8%
52.3%
59.19
17.43
38.66
15.0%
13.7%

Dec-14F
6.4%
(4.4%)
19.2%
(1.23)
1.67
6.3
20.0%
45.4%
56.65
17.49
43.48
10.1%
11.0%

Dec-15F
10.0%
23.5%
21.6%
(1.40)
1.80
6.7
20.0%
38.1%
59.22
16.46
42.51
11.4%
12.6%

Dec-16F
10.0%
14.7%
22.5%
(1.89)
1.95
6.6
20.0%
38.2%
60.64
15.53
41.69
11.8%
12.6%

Dec-13A
3.3
30,649.5
46.4%
2.5
1,086.0
217.1
4.0%

Dec-14F
3.7
32,182.0
51.1%
2.5
1,391.0
186.5
6.0%

Dec-15F
4.1
33,791.1
56.2%
2.5
1,391.0
205.1
6.0%

Dec-16F
4.5
35,480.6
61.8%
2.5
1,391.0
225.6
6.0%

Key Drivers

12-month Forward Rolling FD P/E (x)


45.0
40.0

No. Of Patient Admissions (m P.a.)


Revenue Per Patient Bed (THB)
Occupancy Rate Of Beds (%)
Average Length Of Stay (days)
Beds Opened (units)
Bed Turnover A Year (x)
% of fgn patients to patient load

35.0
30.0

25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Bangkok Chain Hospital

Bangkok Dusit Med Service

Bumrungrad Hospital

Chularat Hospital

SOURCE: CIMB, COMPANY REPORTS

83

HospitalsThailand
December 12, 2014

Bangkok Dusit Med Service


BGH TB / BGH.BK

Market Cap

Avg Daily Turnover

Free Float

US$8,588m

US$11.07m

47.6%

THB281,935m

THB359.6m

15,491 m shares

Current

THB18.20

Target

THB23.80

Prev. Target

THB23.80

Up/Downside

30.8%
Conviction|

Big is beautiful

CIMB Analyst(s)

Aggressive hub-and-spoke expansion with stringent cost control on the


back of a large hospital network will allow BGH to deliver solid
earnings growth over the next several years without much concern
over the drag from greenfield hospitals.

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

0.6

-0.7

27.5

Absolute

-0.6

-2.2

41.6

Major shareholders

% held

Prasartthongorsoth family
Thongtang family

30.5
15.2

Show Style "View Doc Map"

We reiterate our Add call on BGH


with an unchanged target price of
THB23.8 based on 34x FY16 P/E (1.5
s.d. above 5-year historical mean).
BGH is our top pick in the sector on
the back of its clear growth strategy
and strong execution track record. It
should be the prime beneficiary of the
Asean Economic Community (AEC).

Hub-and-spoke expansion
The six new hospitals slated for
opening over the next couple of years
are in Thailands upcountry and are
secondary care hospitals with only
one basic tertiary care hospital in
Chonburi province. As a result, capex
per bed is not high, at about THB4.5m
(US$140k).
These new hospitals will give BGH
better upcountry reach and should
help refer more serious cases to its
hub hospitals. This will also improve
its traffic and margins at the hubs. As
such, new hospitals will continue to be
one of key earnings drivers for the
next few years.

No dent from new hospitals


With stringent cost control and an
already large network of 37 hospitals,
BGH should be able to absorb start-up
losses from the new greenfield
Price Close

150.0

19.9

140.0

17.9

130.0

15.9

120.0

13.9

110.0

11.9

100.0

9.9
200

90.0

150

Vol m

100
50
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


18.20
19.70

10.85

23.80
Current

Target

hospitals without a dent in its


earnings growth. We expect its
EBITDA margins to be stable over the
next few years.
BGH has already added three
greenfield and four brownfield
hospitals in 2014. Its earnings are
expected to grow 23%, with EBITDA
margin rising by about 100bp to 22%
in 2014.

Prime beneficiary of AEC


With strong brand names and a large
hospital network that covers all
segments, BGH should be the prime
beneficiary of AEC, which will be
become effective at the end of 2015.
We expect more patients from
neighbouring countries, especially
Cambodia, Laos, Myanmar and
Vietnam (CLMV), to cross the borders
to seek medical treatment in Thailand.
Therefore, BGHs organic volume
growth is expected to be 7-8% over
the next few years, outperforming the
5% peer average. Healthcare inflation
is expected to add about 3% growth,
case mix index another 0.5% and
inorganic growth 3%.

Financial Summary

Relative to SET (RHS)

21.9

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
45,478
10,221
7,849
0.39
39.8%
44.26
0.18
0.99%
29.24
113.0
41.8%
7.63
17.6%

Dec-13A
50,615
10,334
6,261
0.40
3.4%
44.95
0.20
1.10%
29.24
105.1
43.7%
6.93
16.2%

Dec-14F
56,922
11,748
7,732
0.50
23.3%
36.44
0.20
1.11%
25.96
89.5
44.3%
6.23
18.0%
0%
1.06

Dec-15F
64,580
13,403
9,184
0.59
18.8%
30.70
0.25
1.37%
22.86
76.5
42.6%
5.57
19.2%
0%
1.05

Dec-16F
73,072
15,290
10,768
0.70
17.2%
26.18
0.30
1.63%
20.11
57.2
39.8%
4.97
20.1%
0%
1.06

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Bangkok Dusit Med ServiceThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
50,615
17,638
10,334
(3,244)
7,090
(894)
988
728
7,912
0
7,912
(1,392)

Dec-14F
56,922
20,057
11,748
(3,406)
8,341
(901)
1,186
696
9,322
0
9,322
(1,383)

Dec-15F
64,580
22,926
13,403
(3,577)
9,826
(988)
1,352
836
11,025
0
11,025
(1,645)

Dec-16F
73,072
26,216
15,290
(3,756)
11,535
(1,176)
1,595
936
12,889
0
12,889
(1,920)

6,520
(259)
0

7,939
(207)
0

9,381
(196)
0

10,969
(200)
0

6,261
6,261
6,261

7,732
7,732
7,732

9,184
9,184
9,184

10,768
10,768
10,768

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
4,182
4,931
919
198
10,229
39,136
13,593
11,600
1,842
66,170
4,072

Dec-14F
4,203
5,910
1,194
217
11,525
43,832
14,952
12,212
2,088
73,084
4,200

Dec-15F
4,023
6,974
1,517
239
12,753
48,215
16,447
12,895
2,368
79,925
4,220

Dec-16F
4,360
7,880
1,972
263
14,475
53,037
18,092
13,623
2,687
87,438
4,242

4,494
3,195
11,761
18,729

5,121
3,514
12,835
20,976

6,070
3,866
14,156
22,235

7,206
4,253
15,701
23,569

3,265
21,994
0
33,755
40,680
1,963
42,643

3,429
24,405
0
37,240
45,282
2,087
47,369

3,600
25,835
0
39,991
50,600
2,087
52,687

3,780
27,349
0
43,049
56,776
2,087
58,863

Dec-13A
11.3%
1.1%
20.4%
(1.20)
2.63
7.41
17.6%
36.4%
33.22
9.40
42.25
11.3%
11.6%

Dec-14F
12.5%
13.7%
20.6%
(1.35)
2.92
8.61
14.8%
30.9%
34.74
10.46
42.79
11.5%
12.2%

Dec-15F
13.5%
14.1%
20.8%
(1.45)
3.27
9.29
14.9%
32.1%
36.41
11.88
44.57
12.1%
13.0%

Dec-16F
13.2%
14.1%
20.9%
(1.51)
3.67
9.22
14.9%
32.6%
37.20
13.62
47.67
13.0%
14.0%

Dec-13A
9.2
5.7
70.0%
3.0
4,652.0
241.2
27.0%

Dec-14F
9.5
6.2
66.0%
3.0
5,777.0
209.8
28.0%

Dec-15F
10.3
6.8
69.0%
3.1
5,977.0
223.0
29.0%

Dec-16F
11.1
7.3
69.0%
3.1
6,177.0
237.4
30.0%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
10,334

Dec-14F
11,748

Dec-15F
13,403

Dec-16F
15,290

(824)

(1,024)

(898)

(729)

0
(957)
(1,392)
7,161
(7,041)
0
(327)
0
(7,369)
2,885
463
0
(3,098)

0
(969)
(1,383)
8,371
(7,338)
0
(261)
0
(7,599)
2,375
0
0
(3,131)

0
(1,058)
(1,645)
9,802
(7,056)
0
(339)
0
(7,395)
1,279
0
0
(3,866)

0
(1,251)
(1,920)
11,389
(7,566)
0
(250)
0
(7,816)
1,356
0
0
(4,592)

429
679
472
2,678
749

124
(632)
141
3,148
1,742

0
(2,587)
(180)
3,686
3,466

0
(3,236)
337
4,929
4,825

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


45.0
40.0

No. Of Patient Admissions (m P.a.)


Revenue Per Patient Bed (THB)
Occupancy Rate Of Beds (%)
Average Length Of Stay (days)
Beds Opened (units)
Bed Turnover A Year (x)
% of fgn patients to patient load

35.0
30.0

25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Bangkok Chain Hospital

Bangkok Dusit Med Service

Bumrungrad Hospital

Chularat Hospital

SOURCE: CIMB, COMPANY REPORTS

85

TransportTHAILAND
December 12, 2014

Bangkok Metro
BMCL TB / BMCL.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,161m

US$12.18m

28.4%

THB38,130m

THB395.8m

20,500 m shares

Current

THB1.86

Target

THB1.14

Prev. Target

THB1.14

Up/Downside

-38.7%
Conviction|

Still too early to get in

CIMB Analyst(s)

Praphan YUKHUNTHORNTHAM
T (66) 2 657 9239
E praphan.yu@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-0.4

-5.5

68.3

Absolute

-1.6

-7.0

82.4

Major shareholders

% held

Ch. Kanchang
MRTA
BECL

30.2
14.6
10.0

Show Style "View Doc Map"

BMCL has been operating 20km of underground trains for over 10


years and it started paying a sizeable revenue share to MRTA in 3Q14
despite incurring net losses. But its operations are improving and it
has just won another 22km with 16 elevated stations (purple line) that
will start service in 2016. This is factored in its current share price.
We maintain our Reduce call in view
of the lack of dividends in the next few
years, high financial cost and
revenues that are not matched with
expenses in the short term. We note
that management is optimistic about
the future of its trains business and
commercial revenues. Our DCF target
price of THB1.14 is intact. BMCL not
only pays interest expenses but it is
also obliged to pay a revenue share of
c.THB43bn to MRTA until 2028.

Purple line to start in 2016


BMCL has guided that it can run the
purple line (Bang Yai-Bang Sue) 3-4
months ahead of the initial schedule
(in late-2016) which will bode well for
its earnings outlook, thanks to more
revenues booked via the feeding of
passengers from its existing blue line.
Service revenues from the purple line
should come in at around THB1.7bn
in the first year of operation. Besides,
the opening of the AIA and Stock
Exchange of Thailand (SET) buildings
in 2015 will support more riders in the
system. BMCL won the concession for

Vol b

Price Close

159

1.20

116

0.70
3
2
2
1
1

73

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range

 


Current

Target

the purple line that covers 16 stations,


22km and 21 trains over 2013-2043.

Consolidation mode
Besides clinching the deal to operate
the purple line until 2043, BMCL is
also interested to operate the blue line
extension (Tao Poon-Tha Phra & Hua
Lamphon-Bang Khae) whose civil
works are 60% completed. To enable
the commencement of the operations
of the blue line in late-2017, the
government must choose an operator
by 1H15. We think that BMCL is most
likely to clinch this contract. However,
the delayed listing of Bangkok Metro
Network (BMN) could dent its
earnings outlook. BMN's 9M14 net
profit came in at THB23.4m vs.
THB29.7m for 9M13.

Maintain Reduce
We see limited upside over the next 12
months as BMCLs share price has
outperformed the market and its
peers YTD. We think that this could
lead to share price downside risks in
the short term. We reiterate our
Reduce rating and target price of
THB1.14/share.

Financial Summary

Relative to SET (RHS)

1.70

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
1,979
543
(978.9)
(0.082)
(15%)
NA
0%
70.81
55.4
1664%
24.51
(70.3%)

Dec-13A
2,106
828
(774.0)
(0.048)
(42%)
NA
0%
46.87
NA
98%
4.39
(16.1%)

Dec-14F
2,314
1,036
(421.3)
(0.021)
(57%)
NA
0%
45.33
398.4
105%
4.62
(5.0%)
0%
0.82

Dec-15F
2,565
1,289
(975.8)
(0.048)
132%
NA
0%
37.10
125.3
131%
5.23
(12.6%)
0%
1.40

Dec-16F
3,133
1,833
(355.0)
(0.017)
(64%)
NA
0%
26.70
NA
153%
5.50
(5.0%)
0%
1.02

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Bangkok MetroThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
2,528
1,068
828
-371
457
-1,229
0
9
-763

Dec-14F
2,772
1,298
1,036
-343
692
-1,123
0
9
-421

Dec-15F
3,067
1,578
1,289
-367
922
-1,908
0
10
-976

Dec-16F
3,683
2,179
1,833
-340
1,493
-1,858
0
10
-355

-763
-2

-421
0

-976
0

-355
0

-765
-9

-421
0

-976
0

-355
0

-774
-774
-774

-421
-421
-421

-976
-976
-976

-355
-355
-355

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
2,195
161

Dec-14F
1,996
151

Dec-15F
1,085
159

Dec-16F
422
175

55
2,411
17,905
0
7
36
17,948
0
33
557
117
707
10,740

60
2,207
17,767
0
1
36
17,804
0
40
568
102
710
10,700

65
1,309
17,600
0
1
36
17,637
6
48
569
102
724
10,652

76
674
18,360
0
1
36
18,397
505
481
569
102
1,657
10,171

101
10,841
55
11,603
8,683
73
8,756

224
10,924
43
11,677
8,261
73
8,335

163
10,815
49
11,588
7,286
73
7,359

193
10,364
46
12,067
6,931
73
7,004

Dec-13A
6.4%
53%
39.3%
-0.42
0.42
0.37
0%
NA
12.48
7.82
2.60%
2.48%

Dec-14F
9.8%
25%
44.8%
-0.43
0.40
0.92
0%
NA
12.28
8.40
3.97%
3.58%

Dec-15F
10.9%
24%
50.2%
-0.47
0.36
1.19
0%
NA
10.94
8.75
5.32%
4.95%

Dec-16F
22.1%
42%
58.5%
-0.52
0.34
1.93
0%
NA
10.38
8.78
8.68%
8.22%

Dec-15F
9.0%
2,565.2
334.6
81.6
36.4
39.5
9.7

Dec-16F
20.0%
3,133.0
371.4
88.2
37.1
42.3
10.6

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
828

Dec-14F
1,036

Dec-15F
1,289

Dec-16F
1,833

-19

13

-7

-16

-2,604
-1,229
2
-3,021
-216
0
0
180
-36

0
-753
0
296
-200
0
0
0
-200

0
-777
0
504
-200
0
0
0
-200

0
-774
0
1,043
-1,100
0
0
0
-1,100

8,550

-5,500
3,050
-7
-3,057
-1,828

-45
-45
51
96
849

-34
-34
271
304
1,082

-51
-51
-108
-57
717

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

Ridership growth
Farebox reveues
Advertising media services
Telecommunication services
Retail space leases
ATM and public telephone services
Commercial Development

45.0
40.0
35.0

30.0
25.0
20.0

Dec-12A
16.3%
1,979.3
188.1
58.3
16.6
25.5
2.2

Dec-13A
7.6%
2,106.4
274.0
70.0
35.0
34.5
8.0

Dec-14F
8.5%
2,313.6
301.4
75.6
35.7
36.9
8.8

15.0
10.0
5.0
0.0
Jan-10

Jan-11

Bangkok Metro

Jan-12
BTS Group

Jan-13
ComfortDelGro

Jan-14
SMRT Corporation

SOURCE: CIMB, COMPANY REPORTS

87

Coal MiningThailand
December 12, 2014

Banpu
BANPU TB / BANP.BK

Market Cap

Avg Daily Turnover

Free Float

US$2,005m

US$7.55m

49.0%

THB65,838m

THB245.0m

2,650 m shares

Current

THB25.50

Target

THB35.00

Prev. Target

THB35.00

Up/Downside

37.3%
Conviction|

Coal vs Power

CIMB Analyst(s)

While Banpu will face earnings pressure from weak coal prices, we
believe earnings will be strengthened by its power business that would
account for over 50% its profits in 2015-16. This should not only boost
but also sustain its earnings quality from secured power earnings.

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-6.1

-19.4

-32.5

Absolute

-7.3

-20.9

-18.4

Major shareholders

% held

Thai NVDR Co., Ltd.


Somer (U.K.) Ltd.
TME Capital

8.3
4.4
3.6

Show Style "View Doc Map"

We expect Banpus earnings to bottom


in 2014 and start to recover in
2015-16, driven by the earnings from
its Hongsa coal-fired power plant that
will start up in 2H15-2016. Its coal
earnings should remain profitable
despite the lower coal price
environment thanks to its cost control
capabilities at its coal mines. We
maintain Add and our SOP-based
target price of THB35.

Power drive
We believe that over the next three
years, Banpu will transform itself
from a coal-driven company to
power-driven company. Its three
drivers include the power plants in
Laos (COD in 2015-16), China (2017),
and the BLCP expansion in Thailand
(2018). When these three power
plants are completed, we estimate
that they could add THB6.1bn equity
income to Banpu by 2018 and
contribute THB6.5/shr in value to
Banpu from the total value of Banpus
assets of THB19/shr.

Near-term growth from coal


capacity expansion

from Gaohe mine (40% stake) and the


capacity expansion for its two power
plants in China.

Investment in power
near-term
Banpu has announced that it plans to
take up a 30% stake in a 1,200MW
coal-fired power plant, which will
consume the coal produced from its
own Gaohes mine. We believe this is
the right strategic move to strengthen
its earnings portfolio in order to
balance the downside risk for its coal
earnings amid the weak coal price
environment.

Limited downside, with power


upside
We believe Banpu has limited
downside at its current price backed
by a THB28/shr value, comprising its
power value of THB17.3/shr and the
coal reserve value of THB11/shr,
based on the value of coal reserves at
US$5/tonne for Banpus equity
reserve of 638mt as of Sep 14. We
project Banpus earnings from power
to account for 38-55% of its total
earnings in 2015-17.

Banpus earnings growth in 2015-17


will come from the capacity expansion

Price Close

Financial Summary

Relative to SET (RHS)

36.0

111.0

34.0

102.7

32.0

94.3

30.0

86.0

28.0

77.7

26.0

69.3

24.0
80

61.0

60
Vol m

40
20
Dec-13

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

Revenue (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
EV/Reserve (USD/tonne)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
117,314
8,441
3.30
(35.3%)
7.72
1.62
6.35%
6.09
4.89
7.6
77%
0.85
11.4%

Dec-13A
102,944
3,151
0.89
(72.9%)
28.87
1.08
4.24%
10.56
5.62
NA
112%
0.92
3.0%

Dec-14F
89,288
3,368
1.33
48.7%
19.42
0.97
3.82%
7.59
4.36
689.7
103%
0.89
4.7%
0%
0.97

Dec-15F
89,068
5,396
2.09
57.1%
12.20
1.23
4.81%
7.07
4.40
NA
94%
0.86
7.2%
0%
1.30

Dec-16F
94,413
9,755
3.78
80.8%
6.75
2.14
8.40%
4.94
3.94
5.5
72%
0.81
12.4%
0%
1.60

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

BanpuThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
102,944
30,033
14,768
(6,948)
7,820
(3,526)
2,909
1,334
8,537
0
8,537
(2,787)

Dec-14F
89,288
31,619
19,757
(10,914)
8,843
(4,169)
3,202
(374)
7,842
0
7,503
(664)

Dec-15F
89,068
32,405
20,697
(11,433)
9,264
(3,399)
3,983
(391)
9,797
0
9,458
(1,202)

Dec-16F
94,413
38,940
26,505
(12,146)
14,359
(2,817)
5,305
(342)
16,844
0
16,504
(2,636)

5,750
(2,599)
0

6,838
(3,471)
0

8,256
(2,859)
0

13,868
(4,113)
0

3,151
2,371
2,371

3,368
3,436
3,436

5,396
5,396
5,396

9,755
9,755
9,755

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
10,282
9,209
5,271
25,032
49,793
47,769
19,338
1,799
117,971
186,878
16,382

Dec-14F
7,359
10,653
2,917
25,032
45,961
47,224
22,540
1,460
116,237
187,460
8,000

Dec-15F
940
10,627
2,910
25,032
39,509
46,143
26,523
1,120
116,237
190,024
8,000

Dec-16F
8,351
11,264
3,085
24,909
47,609
44,912
31,828
781
108,026
185,547
2,000

2,309
22,053
40,745
89,574

2,683
22,053
32,736
90,514

2,677
22,053
32,730
81,474

2,837
22,053
26,890
80,754

21,293
110,867
0
151,612
73,557
11,503
85,059

21,293
111,807
0
144,543
73,905
14,973
88,878

21,293
102,767
0
135,496
76,204
17,832
94,036

22,225
102,978
0
129,869
81,342
21,945
103,287

Dec-13A
(12.2%)
(33.9%)
14.3%
(36.11)
27.76
2.01
32.6%
90.8%
33.62
28.80
13.26
3.69%
4.30%

Dec-14F
(13.3%)
33.8%
22.1%
(35.30)
28.62
1.95
8.9%
67.8%
40.60
25.91
15.80
4.02%
5.14%

Dec-15F
(0.2%)
4.8%
23.2%
(34.28)
29.51
2.38
12.7%
55.3%
43.60
18.77
17.26
4.30%
5.52%

Dec-16F
6.0%
28.1%
28.1%
(28.81)
31.50
4.25
16.0%
54.8%
42.43
19.78
18.19
6.63%
8.30%

Dec-13A
71.9
1.0%
N/A
N/A
N/A

Dec-14F
66.2
-0.1%
N/A
N/A
N/A

Dec-15F
66.1
-1.7%
N/A
N/A
N/A

Dec-16F
69.4
0.7%
N/A
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
14,768
(2,909)
(246)

Dec-14F
19,757
(3,202)
1,283

Dec-15F
20,697
(3,983)
27

Dec-16F
26,505
(5,305)
(652)

7,278
(9,266)
(3,526)
(2,787)
3,312
(11,157)
0
(1,981)
504
(12,634)
6,129
0
0
(3,771)

(1,838)
970
(4,169)
(664)
12,137
(6,400)
0
0
0
(6,400)
(5,640)
0
0
(3,019)

(915)
879
(3,399)
(1,202)
12,103
(6,384)
0
0
0
(6,384)
(9,040)
0
0
(3,098)

11,376
(956)
(2,817)
(2,636)
25,515
(6,767)
0
0
0
(6,767)
(6,720)
0
0
(4,616)

(7,885)
(5,527)
(14,849)
(3,193)
(5,425)

0
(8,659)
(2,923)
97
10,453

0
(12,138)
(6,419)
(3,321)
9,756

0
(11,336)
7,411
12,028
22,204

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

45.0

ASP (US$/tonne)
Volume Growth (%)
Mining Cost (US$/tonne)
Fuel Cost (US$/tonne)
Total Cash Cost (US$/tonne)

40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11
Adaro Energy

Jan-12
Banpu

Jan-13

Jan-14
Indo Tambangraya Megah

SOURCE: CIMB, COMPANY REPORTS

89

RetailThailand
December 12, 2014

Beauty Community
BEAUTY TB / BEAU.BK

Market Cap

Avg Daily Turnover

Free Float

US$308.4m

US$1.29m

35.1%

THB10,125m

THB41.97m

300.0 m shares

Current

THB33.75

Target

THB37.50

Prev. Target

THB37.50

Up/Downside

11.1%
Conviction|

Beautiful to Thais and Chinese

CIMB Analyst(s)

Kitichan SIRISUKARCHA, CFP


T (66) 2 657 9232
E kitichan.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

13.7

24.2

44.4

Absolute

12.5

22.7

58.5

Major shareholders

% held

Mr.Suwin Kraiphubeth
Mrs.Thanyaporn Kraiphubeth
Mr.Pracha Damrongsuthipong

32.3
12.9
4.2

Show Style "View Doc Map"

BEAUTY posted impressive 3Q14 SSSG, prompting us to raise our


FY14-16 EPS forecasts by 4-7%. Our DCF-based target price rises from
THB34.9 to THB37.5 (WACC: 10%, long-term growth: 3.5%), as we
roll over to an end-FY15 valuation. We expect BEAUTYs EPS growth to
gain momentum in 4Q14-FY15. Its share price is attractive at 26x FY15
P/E and 0.8x PEG, with solid financials and high ROE of 36%. We
maintain our Add rating on the stock. Key catalyst is EPS is strong
growth in 1H15, given the low base.
Investors should Add the stock. Our
DCF-based target price rises from
THB34.9 to THB37.5 (WACC: 10%,
long-term growth: 3.5%), as we roll
over to FY15 valuation. We project
BEAUTY EPS growth of 38% yoy in
FY14 and 32% yoy in FY15. The
companys EPS growth is expected to
be remarkable in 1H15, given the low
base.

Strong SSSG amid slow


economy
BEAUTY reported strong SSSG of
39.6% in 3Q14 (vs. retail sector
average of -1.9%), thanks to its
affordably-priced products attracting
low-to middle-income customers. A
cosmetic product is a relatively small
luxury, which is the reason that
cosmetic sales rise during periods of
economic downturn, in contrast to the
sales decline of other consumer
products. Furthermore, BEAUTYs
Beauty Buffet is incredibly popular
with Chinese tourists to Thailand.
This supported SSSG during the weak

Price Close

151.0

32.0

133.5

27.0

116.0

22.0

98.5

17.0
15

81.0

Vol m

10
5
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

periods of
FY14-15.

local

consumption

in

Raising our FY14-16 EPS


forecasts
After incorporating BEAUTYs strong
SSSG of 19% yoy in 9M14, we raise
our SSSG assumptions from 9% to
19% for FY14 and introduce our 6%
SSSG forecast for FY15. However, we
lower our new branch estimate from
65 branches p.a. (Beauty Buffet: 30,
Beauty Cottage: 20 and Beauty
Market: 15) to 55 branches. The net
impact of our revisions lifts our
FY14-16 EPS forecasts by 4-7%.

Long term strategy


BEAUTYs sales in the long term could
be boosted by: 1) modern trade
channels 2) the launch of new
products, as the company targets to
increase the number of new products
by 20-30% p.a., 3) online channels.
The company also intends to build
another warehouse and install a new
IT system to improve inventory
turnover (expected to be completed in
late-2015).

Financial Summary

Relative to SET (RHS)

37.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)

Dec-12A
770
233.9
173.4
0.58
0.0%
58.39
0.72
2.13%
40.08
NA
(76.2%)
10.26

Dec-13A
976
270.6
211.6
0.71
22.0%
47.85
0.65
1.93%
34.86
105.9
(69.0%)
10.09
21.3%

Dec-14F
1,372
374.2
291.5
0.97
37.7%
34.74
0.83
2.45%
25.38
55.5
(59.8%)
9.67
28.4%
1.03

Dec-15F
1,811
506.6
385.6
1.29
32.3%
26.26
1.09
3.24%
18.86
37.6
(51.5%)
9.16
35.8%
1.09

Dec-16F
2,250
661.1
481.8
1.61
25.0%
21.02
1.36
4.04%
14.79
28.3
(29.5%)
8.60
42.2%
1.10

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Beauty CommunityThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Dec-12A Dec-13A
Total Net Revenues
770
976
Gross Profit
549
688
Operating EBITDA
234
271
Depreciation And Amortisation
(23)
(32)
Operating EBIT
211
238
Financial Income/(Expense)
0
0
Pretax Income/(Loss) from Assoc.
0
0
Non-Operating Income/(Expense)
8
26
Profit Before Tax (pre-EI)
219
265
Exceptional Items
Pre-tax Profit
219
265
Taxation
(46)
(53)
Exceptional Income - post-tax
Profit After Tax
173
212
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
173
212
Recurring Net Profit
173
212
Fully Diluted Recurring Net Profit
173
212

Dec-14F
1,372
926
374
(45)
329
0
0
26
355

Dec-15F
1,811
1,208
507
(63)
443
0
0
26
470

Dec-16F
2,250
1,485
661
(101)
561
0
0
26
587

355
(64)

470
(84)

587
(105)

291

386

482

291
291
291

386
386
386

482
482
482

(THBm)
Dec-12A
Total Cash And Equivalents
758
Total Debtors
12
Inventories
124
Total Other Current Assets
0
Total Current Assets
894
Fixed Assets
122
Total Investments
0
Intangible Assets
14
Total Other Non-Current Assets
49
Total Non-current Assets
185
Short-term Debt
0
Current Portion of Long-Term Debt
1
Total Creditors
69
Other Current Liabilities
0
Total Current Liabilities
70
Total Long-term Debt
5
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
3
Total Non-current Liabilities
8
Total Provisions
14
Total Liabilities
92
Shareholders' Equity
987
Minority Interests
Total Equity
987

Cash Flow

Dec-14F
627
26
232
0
885
237
0
17
65
320
0
0
135
0
135
0

Dec-15F
569
35
314
0
917
311
0
20
65
396
0
0
182
0
182
0

Dec-16F
347
43
398
0
788
561
0
19
65
645
0
0
231
0
231
0

3
3
27
135
1,003

2
2
21
158
1,047

2
2
24
209
1,105

2
2
22
256
1,177

1,003

1,047

1,105

1,177

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


233.9
270.6
374.2
506.6
661.1
(30.8)

(30.2)

(27.1)

(42.6)

(43.7)

(55.7)
4.2
(45.6)
106.0
(50.1)
(469.7)

(16.6)
21.6
(53.2)
192.1
(67.1)
(64.1)

13.5
12.9
(63.7)
309.7
(125.5)
4.5

9.2
17.2
(84.3)
406.1
(137.5)
(2.2)

11.4
15.0
(105.3)
538.5
(350.0)
171.1

23.5
(496.3)

34.7
(96.5)

(6.3)
(127.3)

3.1
(136.6)

(1.6)
(180.5)

801.4

0.0

0.0

0.0

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

(195.0)

(247.8)

(327.7)

(409.5)

(2.4)
583.2
193.0
(390.2)
(390.2)

(6.8)
(201.8)
(106.2)
95.6
95.6

(0.3)
(248.1)
(65.7)
182.4
182.4

0.2
(327.6)
(58.0)
269.6
269.6

(0.1)
(409.6)
(51.5)
358.1
358.1

ASP (% chg, main prod./serv.)


Unit sales grth (%, main prod./serv.)
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)

30.0

25.0
20.0
15.0
10.0
5.0

Jan-12

Dec-14F
40.5%
38.3%
27.3%
2.09
3.49
N/A
17.9%
85%
6.95
166.8
98.2
96.5%
31.3%

Dec-15F
32.0%
35.4%
28.0%
1.90
3.68
N/A
17.9%
85%
6.18
165.1
96.0
100.0%
40.4%

Dec-16F
24.3%
30.5%
29.4%
1.16
3.92
N/A
17.9%
85%
6.36
170.1
98.9
99.6%
48.2%

Key Drivers

12-month Forward Rolling FD P/E (x)

Jan-11

Dec-13A
26.8%
15.7%
27.7%
2.31
3.34
N/A
20.1%
92%
7.03
189.8
110.3
94.7%
23.4%

0.0

(215.8)

35.0

0.0
Jan-10

Dec-13A
692
26
176
0
894
157
0
22
65
244
0
0
105
0
105
0

Jan-13

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
148
179
210
240
270
6.0%
5.5% 19.0%
6.0%
5.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
31
50
70
85
100
0.0%
4.2%
2.0%
3.0%
3.0%

Jan-14

Beauty Community

SOURCE: CIMB, COMPANY REPORTS

91

TV - FTATHAILAND
December 12, 2014

BEC World
BEC TB / BEC.BK

Market Cap

Avg Daily Turnover

Free Float

US$3,335m

US$2.97m

60.0%

THB109,500m

THB96.68m

2,000 m shares

Current

THB54.75

Target

THB52.00

Prev. Target

THB49.00

Up/Downside

-5.0%
Conviction|

A dead cat bounce?

CIMB Analyst(s)

BECs recent share price rally offers a profit-taking opportunity for


investors on the back of the expected intensifying price competition in
FY15 and viewership rating coming under pressure from the presence
of new players. We see a lack of re-rating catalysts in the near term.

Pisut NGAMVIJITVONG
T (66) 2 657 9226
E pisut.ng@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

12.9

18.0

-8.8

Absolute

11.7

16.5

5.3

Major shareholders

% held

Maleenont Group
Nortrust Nominees Ltd.

51.0
8.8

Show Style "View Doc Map"

We revise down our FY14-16 core EPS


by 7-11% due to intensifying
competition in digital terrestrial TV
market, but raise our target price,
based on a blend of P/E and DCF, by
6% as we roll it forward to FY15. We
maintain our Hold rating. Our
suggestion to bottom-fish the stock at
THB45 and take profit at above
THB52 worked out well. At THB55,
we think that it is demanding, and its
business outlook seems bleak due to
intensifying competition in the digital
terrestrial TV market.

A mild recovery
We expect BEC to recover its TV ad
revenue in FY15 on the back of the
economic recovery. We still believe
that BEC should be in a good position
to maintain its leadership in the TV
adex market vs. new players such as
RS, Work, etc. The viewership ratings
still suggest that BEC holds the mass
medium proposition, and should
therefore be able to maintain its TV ad
rate.

Cost management is key


Management guides that BEC plans to
launch a full programme line-up for
its SD variety digital terrestrial TV

Price Close

102.5

53.0

90.0

48.0

77.5

43.0
8

65.0

6
Vol m

4
2
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

channel in Mar-Apr 15. We suspect


that it would position this channel as
a fighting brand to compete with the
cheap ad rate of new players like RS,
Work, etc. However, we would be
concerned about the content cost
management and profitability of its
new channel, which could drag down
profitability in the initial phase.

Regulatory uncertainties
Although we believe that the NBTC
should waive additional regulatory
fees (4% of ad revenue) for BECs
simulcast of the analogue terrestrial
TV channel on the HD variety channel,
the legal dispute between BBTV and
the NBTC over BECs simulcast
exercise could be an overhang to the
NBTCs ability to waive the regulatory
fee charges for BEC.

Not attractive
BECs share price is trading at 19.5x
FY15 core P/E, which is on par with
its historical average core P/E of 20x.
We believe that BECs share price
could come under de-rating pressure
as the digital terrestrial TV landscape
has undermined BECs oligopolistic
privilege, its pricing power to raise its
ad rate and high profitability.

Financial Summary

Relative to SET (RHS)

58.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
14,866
8,096
4,777
2.26
34.2%
24.25
2.39
4.36%
12.85
28.03
(68.2%)
13.55
58.8%

Dec-13A
16,339
8,770
5,589
2.62
15.9%
20.93
2.79
5.10%
11.87
31.63
(61.2%)
12.41
61.9%

Dec-14F
15,502
8,694
5,075
2.39
(8.5%)
22.87
2.54
4.63%
11.93
NA
(62.5%)
11.68
52.6%
(10.5%)
1.07

Dec-15F
17,052
9,715
5,807
2.79
16.5%
19.63
2.90
5.30%
10.66
20.06
(60.4%)
10.91
57.5%
(7.7%)
1.16

Dec-16F
17,693
9,359
5,482
2.65
(5.0%)
20.66
2.74
5.01%
11.05
29.33
(59.4%)
10.29
51.2%
(6.7%)
0.99

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

BEC WorldThailand
December 12, 2014

Profit & Loss

Balance Sheet

(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
16,339
10,716
8,770
(1,922)
6,847
(2)
0
358
7,203
0
7,203
(1,449)

Dec-14F
15,502
10,106
8,694
(2,488)
6,206
0
0
286
6,492
0
6,492
(1,277)

Dec-15F
17,052
10,896
9,715
(2,550)
7,164
0
0
229
7,394
0
7,394
(1,474)

Dec-16F
17,693
11,123
9,359
(2,574)
6,785
0
0
183
6,969
0
6,969
(1,396)

5,754
(165)
0
0
0
5,589
5,231
5,231

5,215
(140)
0
0
0
5,075
4,788
4,788

5,919
(112)
0
0
0
5,807
5,578
5,578

5,572
(90)
0
0
0
5,482
5,299
5,299

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-13A
5,789
1,575
5
262
7,630
3,347
448
71
700
4,566
210
0
2,117
280
2,607
0
0
475
475
0
3,081
8,827
288
9,115

Dec-14F
6,192
1,177
1
262
7,631
8,994
448
71
700
10,213
0
0
7,183
280
7,463
0
0
475
475
0
7,938
9,376
530
9,906

Dec-15F
6,450
1,405
1
262
8,117
8,535
448
71
700
9,754
0
0
6,433
280
6,713
0
0
475
475
0
7,188
10,041
642
10,683

Dec-16F
6,755
1,238
1
262
8,256
7,856
448
71
700
9,074
0
0
5,199
280
5,478
0
0
475
475
0
5,953
10,645
732
11,377

Dec-13A
9.9%
8.3%
53.7%
2.79
4.41
2,899
20.1%
100.0%
29.89
0.20
44.67
173%
77.7%

Dec-14F
(5.1%)
(0.9%)
56.1%
3.10
4.69
N/A
19.7%
100.0%
30.24
0.19
49.53
122%
64.5%

Dec-15F
10.0%
11.7%
57.0%
3.22
5.02
N/A
19.9%
100.0%
25.67
0.05
35.08
134%
69.6%

Dec-16F
3.8%
(3.7%)
52.9%
3.38
5.32
N/A
20.0%
100.0%
25.44
0.05
34.28
111%
61.5%

Dec-13A
16.9%
N/A
N/A
91.5%
N/A

Dec-14F
-8.5%
N/A
N/A
94.4%
N/A

Dec-15F
10.3%
N/A
N/A
94.6%
N/A

Dec-16F
3.6%
N/A
N/A
94.4%
N/A

Key Ratios

Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
8,770
0
(415)
0
0
(482)
0
(1,563)
6,309
(2,475)
67
(649)
0
(3,057)
209
25
0
(4,900)
0
1,119
(3,547)
(295)
3,462
3,252

Dec-14F
8,694
0
344
0
0
(5,685)
0
(1,277)
2,076
(3,169)
0
0
0
(3,169)
0
0
0
(4,471)
0
(2,135)
(6,606)
(7,700)
(1,094)
(1,094)

Dec-15F
9,715
0
97
0
0
293
0
(1,474)
8,630
(3,172)
0
0
0
(3,172)
0
0
0
(5,142)
0
12
(5,130)
328
5,457
5,457

Dec-16F
9,359
0
17
0
0
(1,271)
0
(1,396)
6,709
(2,976)
0
0
0
(2,976)
0
0
0
(4,879)
0
1,740
(3,139)
594
3,733
3,733

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


45.0
40.0

Adex Revenue Growth (%)


ARPU (% Change)
No. Of Subscribers (% Change)
Adex/total Revenue (%)
Programming Costs Change (%)

35.0
30.0

25.0
20.0
15.0

10.0
5.0
0.0
Jan-10
BEC World

Jan-11

Jan-12
Major Cineplex Group

Jan-13
MCOT

Jan-14
VGI Global Media PCL

SOURCE: CIMB, COMPANY REPORTS

93

RetailThailand
December 12, 2014

Big C Supercentre
BIGC TB / BIGC.BK

Market Cap

Avg Daily Turnover

Free Float

US$6,358m

US$1.49m

41.4%

THB208,725m

THB48.41m

825.0 m shares

Current

THB253.0

Target

THB212.0

Prev. Target

THB212.0

Up/Downside

-16.2%
Conviction|

Focus on cost, not topline

CIMB Analyst(s)

BIGC has been focusing mostly on its supply chain developments and
cost-saving initiatives. Its expansion has been slow with sluggish
topline growth due to softer domestic demand. In our view, cost
savings alone will not be sufficient to generate long-term growth.

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

11.7

7.8

20.5

Absolute

10.5

6.3

34.6

Major shareholders

% held

Casino group
Thai NVDR
Chirathivat Family

58.6
7.6
8.0

Show Style "View Doc Map"

We remain negative on BIGCs longterm earnings outlook, and maintain


our forecasts, Reduce call and DCFbased target price of THB212 (WACC
10.5%, LTG 2%). Its 3-year EPS CAGR
stands at 13%. Until its small store
formats are proven to be successful,
we still question the companys ability
to generate growth to justify its
current valuation of 25.6x CY15 P/E.

Continued developments in
supply chain
With sluggish sales growth and the
shift of consumers preference away
from hypermarkets to convenient
stores, BIGC has focused on its supply
chain developments to reduce costs
and improve efficiency. This has paid
off with the achievement of margin
improvement in 2014, thus boosting
its earnings during a sales downturn.
After Mini Big C DC stores opened in
May and with fresh food DC stores to
open in 1Q15, we believe that BIGC
will benefit from margin uplifts in the
short term due to rebates received
from suppliers.

Shift towards small store


formats

hypermarket expansion, BIGC has


shifted its expansion plans to focus on
small store formats, i.e. Mini Big C
that targets top-up shopping and
competes neck-and-neck with Tesco
Lotus Express and 7-Eleven that has
also expanded its food product shelves
to serve the busier lifestyle of Thais.

Slowdown in expansion
BIGC continues to be cautious with its
expansion plans. The company has
not yet revealed its expansion plans
for 2015 and its target to achieve 950
Mini Big C stores by 2016 has been
postponed indefinitely. As at end3Q14, there were 316 Mini Big C
stores and we reckon that this is yet to
reach the level required to attain
economies of scale to generate
positive EBIT.

Pure cost savings will not be


enough
With the lack of clarity on its
expansion plans and questions over
the success rate of its small format
stores, we believe that the benefits
from its cost savings are already
priced in and hence, we reiterate our
Reduce rating.

With 123 hypermarket stores as at


end-3Q14 and limited potential for
Price Close

136.0

260

128.5

240

121.0

220

113.5

200

106.0

180

98.5

160
3

91.0

Vol m

Financial Summary

Relative to SET (RHS)

280

1
Dec-13

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
123,733
12,547
6,074
7.47
14.2%
33.87
2.21
0.87%
18.01
NA
63.4%
6.55
21.9%

Dec-13A
130,971
13,161
6,976
8.46
13.2%
29.92
2.55
1.01%
17.35
404.2
52.9%
5.64
20.3%

Dec-14F
137,095
13,862
7,122
8.63
2.1%
29.31
2.59
1.02%
16.23
NA
38.7%
4.97
18.0%
0%
0.98

Dec-15F
149,284
15,141
8,156
9.89
14.5%
25.59
2.97
1.17%
14.55
38.0
24.2%
4.37
18.2%
0%
0.97

Dec-16F
163,411
16,703
9,166
11.11
12.4%
22.77
3.33
1.32%
12.92
37.2
12.9%
3.86
18.0%
0%
0.96

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Big C SupercentreThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
130,971
30,481
13,161
-3,616
9,545
-1,053
0
0
8,492
0
8,492
-1,502

Dec-14F
137,095
32,536
13,862
-3,867
9,995
-1,074
0
0
8,921
0
8,921
-1,784

Dec-15F
149,284
35,286
15,141
-4,132
11,008
-793
0
0
10,215
0
10,215
-2,043

Dec-16F
163,411
38,448
16,703
-4,454
12,250
-770
0
0
11,480
0
11,480
-2,296

6,989
-14

7,137
-14

8,172
-16

9,184
-18

6,976
6,976
6,976

7,122
7,122
7,122

8,156
8,156
8,156

9,166
9,166
9,166

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
7,175
3,581
9,535
1,491
21,782
42,479
0
31,890
1,013
75,383
6,000
1,675
26,998
2,483
37,156
19,084

Dec-14F
2,826
3,707
10,026
1,491
18,050
44,981
0
31,521
1,013
77,515
0
1,675
28,073
2,483
32,231
17,409

Dec-15F
5,865
4,042
9,370
1,491
20,767
49,213
0
31,157
1,013
81,383
0
1,675
30,608
2,483
34,766
15,734

Dec-16F
8,731
4,431
10,271
1,491
24,924
53,120
0
30,796
1,013
84,929
0
1,675
33,552
2,483
37,710
14,059

3,886
22,970
0
60,126
37,019
19
37,038

3,886
21,295
0
53,527
42,005
34
42,038

3,886
19,620
0
54,386
47,714
50
47,764

3,886
17,945
0
55,655
54,130
67
54,198

Dec-13A
5.85%
4.9%
10.0%
-23.74
44.87
9.06
17.7%
30.2%
7.77
34.02
97.96
13.1%
15.3%

Dec-14F
4.68%
5.3%
10.1%
-19.71
50.91
8.72
20.0%
30.0%
9.70
34.14
96.12
13.2%
16.1%

Dec-15F
8.89%
9.2%
10.1%
-13.99
57.84
13.41
20.0%
30.0%
9.47
31.05
93.94
14.2%
17.5%

Dec-16F
9.46%
10.3%
10.2%
-8.49
65.61
14.78
20.0%
30.0%
9.49
28.76
93.96
15.5%
18.2%

Dec-13A
N/A
N/A
119
0.0%
N/A
N/A
278
N/A

Dec-14F
N/A
N/A
123
0.0%
N/A
N/A
318
N/A

Dec-15F
N/A
N/A
128
3.0%
N/A
N/A
568
N/A

Dec-16F
N/A
N/A
133
2.0%
N/A
N/A
818
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
13,161

Dec-14F
13,862

Dec-15F
15,141

Dec-16F
16,703

-801

459

2,856

1,654

-1,053
-1,502
9,804
-7,363
0
0
316
-7,046
-2,241
0

-1,074
-1,784
11,463
-6,000
0
0
0
-6,000
-7,675
0

-793
-2,043
15,161
-8,000
0
0
0
-8,000
-1,675
0

-770
-2,296
15,292
-8,000
0
0
0
-8,000
-1,675
0

-2,104

-2,137

-2,447

-2,750

-18
-4,363
-1,606
516
3,811

0
-9,812
-4,349
-2,212
6,609

0
-4,122
3,039
5,486
7,982

-0
-4,425
2,867
5,617
8,120

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

45.0

ASP (% chg, main prod./serv.)


Unit sales grth (%, main prod./serv.)
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)

40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11
Big C Supercentre

Jan-12
CP All

Jan-13

Jan-14
Robinson Department Store

SOURCE: CIMB, COMPANY REPORTS

95

Public TransportationThailand
December 12, 2014

BTS Group
BTS TB / BTS.BK

Market Cap

Avg Daily Turnover

Free Float

US$3,637m

US$14.10m

58.1%

THB119,416m

THB458.7m

11,919 m shares

Current

THB10.10

Target

THB11.00

Prev. Target

THB11.00

Up/Downside

8.9%
Conviction|

Unlocking property assets

CIMB Analyst(s)

Besides benefiting from the nations mass rail transit (MRT) expansion,
BTS has also started to unlock its property assets i.e. JVs with Natural
Park (NPARK) and Sansiri (SIRI) which we think are positive moves.

Praphan YUKHUNTHORNTHAM
T (66) 2 657 9239
E praphan.yu@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-0.8

7.3

-1.3

Absolute

-2.0

5.8

Major shareholders

12.8
% held

Mr. Keeree Kanjanapas & Group


Thai NVDR
Bangkok Bank

41.7
6.5
4.6

Show Style "View Doc Map"

BTS has financial strength, with over


THB26bn in cash and current
investments as at Sep 14. We keep our
Add rating and SOP-based target
price. Potential re-rating catalysts are:
1) clinching more O&M contracts, 2)
improved property earnings, 3) higher
contribution from subsidiary VGI
after its M&A deals, and 4) better
revenues from its services business
(cards and restaurants).

Good news for 1H15

BST has two major developments next


year. 1) Its 50:50 JV with Sansiri (SIRI
TB) is developing a 43-floor
condominium tower on 8,000 sq m of
land adjacent to the BTS Mo Chit
station. Presales for the project will
commence in Mar 15 and the
condominium units are expected to be
transferred to buyers in Mar 18. 2) BTS
has proposed to acquire via share swap
some 37% stake in NPARK, which is
developing commercial property in
Phaholyothin Road and Phayathai
Road worth THB8bn-10bn. The deal is
awaiting shareholder approval and is
likely to be completed in 1QCY15. We
think it is a win-win strategy through
which BTS will enhance its financial
position and earnings.

Price Close

103.4

9.60

96.3

8.60

89.1

7.60
300

82.0

Vol m

200
100
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

More good news to come

The current government is speeding up


the expansion of the nations MRT
network, with the aim of completing the
expansion by 2029. There will be 10
new lines. It is likely that there will be
direct negotiations with BTS for the
operation of two of the lines (northern
and southern extensions to the Green
Line). Civil works for the southern
extension
of
the
Green
Line
(Bearing-Samutprakarn) is progressing
well and the operator of the line should
be appointed by 1H15 in order to enable
the prompt commencement of its
operations in 2017. As for the northern
extension (Mo Chit-Khu Khot), bidding
for civil works is underway. The line
operator should be selected by late-2015
and it is expected to start operations in
2020. We believe BTS will most likely
clinch the two concessions.

Accumulate

We advocate that investors add BTS


before the abovementioned projects
materialise to get the most out of the
companys increased revenues from
property and O&M. Our model has
not factored in these projects, which
we believe will trigger a re-rating of
the stock. We maintain our Add call,
with a target price of THB11, based on
SOP valuation plus secured 6-8%
dividend yield in FY2015-6.

Financial Summary

Relative to SET (RHS)

10.60

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Mar-13A
5,585
3,164
1,719
0.14
48.6%
67.86
0.39
3.84%
41.17
NA
15.8%
2.48
4.04%

Mar-14A
8,115
2,698
12,645
0.15
6.6%
66.68
0.60
5.94%
36.46
3.88
(39.9%)
2.08
3.39%

Mar-15F
8,284
3,288
2,438
0.20
35.0%
49.39
0.62
6.18%
30.50
31.18
(38.2%)
2.11
4.24%
0%
0.96

Mar-16F
9,232
3,910
2,598
0.22
6.6%
46.34
0.67
6.65%
26.44
25.81
(36.1%)
2.23
4.68%
0%
0.96

Mar-17F
9,991
4,317
2,790
0.23
7.4%
43.14
0.29
2.87%
23.85
23.81
(38.1%)
2.24
5.18%
0%
0.93

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

BTS GroupThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Mar-14A
8,115
4,537
2,698
-511
2,187
582
619
13,972
17,361
0
17,361
-3,806

Mar-15F
8,284
4,945
3,288
-418
2,870
706
632
0
4,208
0
4,208
-842

Mar-16F
9,232
5,572
3,910
-463
3,447
390
704
0
4,541
0
4,541
-908

Mar-17F
9,991
6,115
4,317
-463
3,853
272
762
0
4,888
0
4,888
-978

13,555
-910
0

3,366
-929
0

3,633
-1,035
0

3,910
-1,120
0

12,645
1,805
1,805

2,438
2,438
2,438

2,598
2,598
2,598

2,790
2,790
2,790

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Mar-14A
32,165
1,074
2,581
1,407
37,227
15,085
20,182
79
4,185
39,530
3,618

Mar-15F
28,730
1,021
915
797
31,462
16,667
20,182
79
2,000
38,927
4,390

Mar-16F
26,176
1,064
1,003
888
29,131
16,903
20,182
79
2,000
39,164
4,004

Mar-17F
26,573
1,055
1,062
961
29,651
16,640
20,182
79
2,000
38,901
4,197

2,222
2,790
8,630
4,682

1,829
2,848
9,068
1,469

2,006
3,174
9,184
1,348

2,124
3,435
9,756
0

3,682
8,365
0
16,995
57,901
1,862
59,762

0
1,469
0
10,537
57,062
2,790
59,852

0
1,348
0
10,532
53,937
3,825
57,763

0
0
0
9,756
53,850
4,946
58,795

Mar-14A
45.3%
(14.7%)
33.3%
2.00
4.86
3.47
21.9%
33%
45.43
312
212.7
2.9%
5.19%

Mar-15F
2.1%
21.9%
39.7%
1.92
4.79
11.07
20.0%
171%
46.16
191
221.5
11.8%
5.73%

Mar-16F
11.4%
18.9%
42.4%
1.75
4.53
19.08
20.0%
183%
41.33
96
191.7
16.4%
6.24%

Mar-17F
8.2%
10.4%
43.2%
1.88
4.52
12.91
20.0%
73%
38.71
97
194.4
18.4%
7.02%

Mar-14A
6.5%
8.9%
N/A
N/A

Mar-15F
0.0%
8.0%
N/A
N/A

Mar-16F
0.0%
12.0%
N/A
N/A

Mar-17F
2.0%
9.0%
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Mar-14A
2,698

Mar-15F
3,288

Mar-16F
3,910

Mar-17F
4,317

43,803

1,995

280

256

89
-631
-3,806
42,153
-2,983
0
-19,804
15,823
-6,965
-4,194
3,542
0
-7,137

0
-259
-842
4,182
-418
0
0
2,538
2,120
-2,441
47
0
-6,726

0
-181
-908
3,101
-463
0
2,534
2,070
-507
5
0
-7,557

0
-298
-978
3,296
-463
0
0
3,378
2,915
-1,155
7
0
-5,500

-1,615
-9,404
25,784
30,994
35,819

-2,704
-11,825
-5,522
3,861
6,562

-9,832
-17,891
-12,720
4,664
5,352

-2,915
-9,563
-3,352
5,056
6,510

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

45.0

Avg fare/trip (%chg,main prod/serv)


Ridership grth (%,main prod/serv)
Avg fare/trip (%chg,2ndary prod/serv)
Ridership grth (%,2ndary prod/serv)

40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-11

Jan-12
BTS Group

Jan-13

Jan-14

ComfortDelGro

Jan-15
SMRT Corporation

SOURCE: CIMB, COMPANY REPORTS

97

HospitalsThailand
December 12, 2014

Bumrungrad Hospital
BH TB / BH.BK

Market Cap

Avg Daily Turnover

Free Float

US$3,163m

US$2.77m

39.2%

THB103,826m

THB90.19m

730.1 m shares

Current

THB142.5

Target

THB125.0

Prev. Target

THB125.0

Up/Downside

-12.3%
Conviction|

Painfully expensive

CIMB Analyst(s)

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

5.6

7.8

44.2

Absolute

4.4

6.3

58.3

Major shareholders

% held

Bangkok Dusit Medical


Bangkok Insurance
Sinsapthawee

23.9
14.7
8.7

Show Style "View Doc Map"

BH is a well-run, high-end hospital with elevated profit margins,


driven by the higher volume, favourable case mix index and decent
price hikes. Given its strong brand name, we expect BH to continue to
attract strong influx of foreign patients. Its new campus will not be
up-and-running until 2018.
The above factors should not come as
a surprise to the market, as
Bumrungrad Hospital (BH) trades at
above 40x CY15 P/E. However, we
believe that this is difficult to justify,
given its 11-16% EPS growth in
CY15-16. We reiterate our Reduce call,
with an unchanged target price of
THB125.0, based on 30x forward P/E
(1 s.d. above its 5-year mean).
De-rating catalysts could come from
weaker-than-expected recovery in
foreign patients.

Medical tourism magnet


BH is the medical tourism pioneer in
Thailand and foreign patients account
for over 60% of its revenue. We
believe that the ratio of foreign
patients will continue to rise gradually
as more patients from neighbouring
countries come to Thailand for
medical treatment. We expect foreign
patient volume growth to outpace that
of Thai patients.
However, BH may not benefit as
much from rising medical tourism as
its peers like BGH, as it only has one
campus.

Greater economies of scale,


higher margins

in patient volume, 5% healthcare


inflation and 2% increase in case mix
index, we believe that BHs revenue
will increase by 10% pa in FY14-16.
We believe that BHs profit margin
will continue to trend upwards in the
next few years. However, this should
not come as a surprise to the market,
as this has been the trend for the past
few years.

Petchburi campus likely to


open in 2018
BHs Petchburi campus is undergoing
redesign and Environment Impact
Assessment resubmission to obtain
maximum usable area of 78,200 sq m
from land measuring 8,200 sq m.
Petchburi is expected to be a 240-bed
tertiary
care
hospital.
The
construction is expected to start in
Sep 2015.
The land cost for the Petchburi
campus was around THB900m, while
the building and construction cost is
estimated at THB7bn. This translates
into
capex/bed
of
around
THB33m/bed (US$1m/bed). We do
not expect any earnings drag from its
new campus over the next few years.

Based on our estimates of 3% increase


Price Close

Financial Summary

Relative to SET (RHS)

154

153.2

134

137.7

114

122.1

94

106.6

74
30

91.0

Vol m

20

10
Dec-13

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


142.5
152.5

82.00

125.0
Current

Target

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
12,856
3,028
2,558
2.70
24.1%
62.64
1.80
1.26%
34.00
21
(12.6%)
12.22
25.9%

Dec-13A
14,251
3,770
2,521
3.45
27.9%
48.98
1.90
1.33%
27.41
102
(7.4%)
10.84
27.8%

Dec-14F
15,391
4,167
2,817
3.86
11.8%
43.83
1.93
1.35%
24.68
64
(14.2%)
9.45
27.3%
0%
1.07

Dec-15F
16,930
4,585
3,124
4.28
10.9%
39.52
2.14
1.50%
22.53
NA
(8.8%)
8.28
26.5%
0%
1.01

Dec-16F
18,623
5,228
3,612
4.95
15.6%
34.19
2.47
1.74%
19.80
1,056
(6.6%)
7.24
26.8%
0%
1.01

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Bumrungrad HospitalThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
14,251
6,297
3,770
(882)
2,887
6
6
247
3,146
0
3,146
(625)
0
2,521
0
0

Dec-14F
15,391
6,938
4,167
(935)
3,231
(70)
6
268
3,436
0
3,436
(618)
0
2,817
0
0

2,521
2,521
2,521

2,817
2,817
2,817

Dec-15F
16,930
7,585
4,585
(982)
3,603
(84)
7
284
3,810
0
3,810
(686)
0
3,124
0
0

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
18,623
8,250
5,228
(1,080)
4,148
(53)
8
302
4,405
0
4,405
(793)
0
3,612
0
0

3,124
3,124
3,124

3,612
3,612
3,612

Cash Flow

Dec-13A
5,857
1,307
305
83
7,551
9,096
236
189
180
9,701
0

Dec-14F
6,764
1,398
335
92
8,589
10,005
279
200
54
10,538
0

Dec-15F
4,646
1,496
368
92
6,603
12,006
329
200
54
12,589
0

Dec-16F
2,978
1,601
405
92
5,076
14,408
388
200
54
15,050
0

1,347
778
2,125
5,142

1,422
802
2,224
5,142

1,502
846
2,348
3,500

2,062
894
2,956
2,000

387
5,529
0
7,654
9,598
0
9,598

355
5,497
0
7,721
11,006
400
11,406

355
3,855
0
6,203
12,568
420
12,988

355
2,355
0
5,311
14,374
441
14,815

Dec-13A
10.8%
24.5%
26.5%
0.98
13.15
19.52
19.9%
39.7%
33.83
12.35
38.06
30.5%
21.6%

Dec-14F
8.0%
10.5%
27.1%
2.22
15.08
13.54
18.0%
36.9%
32.08
13.81
37.64
28.6%
21.7%

Dec-15F
10.0%
10.0%
27.1%
1.57
17.21
17.96
18.0%
36.9%
31.21
13.74
35.07
29.2%
22.5%

Dec-16F
10.0%
14.0%
28.1%
1.34
19.69
32.49
18.0%
36.9%
30.44
13.65
40.99
28.0%
25.4%

Dec-13A
1.2
13.1
65.7%
4.4
563.0
84.0
61.1%

Dec-14F
1.2
14.6
67.7%
4.5
563.0
84.8
60.0%

Dec-15F
1.2
16.2
69.7%
4.6
563.0
85.7
60.0%

Dec-16F
1.2
18.0
71.8%
4.7
563.0
86.5
59.0%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
3,770

Dec-14F
4,167

Dec-15F
4,585

Dec-16F
5,228

(87)

39

(7)

466

0
(148)
(625)
2,910
(1,727)
0
(158)
0
(1,885)
185
(0)
0
(1,387)

0
(239)
(618)
3,349
(474)
0
(982)
0
(1,456)
22
(0)
0
(1,409)

0
(201)
(686)
3,692
(1,600)
0
(1,025)
0
(2,625)
(1,642)
(0)
0
(1,562)

0
(128)
(793)
4,774
(2,026)
0
(1,131)
0
(3,157)
(1,500)
(0)
0
(1,806)

0
(1,202)
(177)
1,210
1,173

400
(986)
907
1,915
2,132

20
(3,185)
(2,118)
(576)
1,267

21
(3,285)
(1,668)
117
1,745

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


45.0
40.0

No. Of Patient Admissions (m P.a.)


Revenue Per Patient Bed (THB)
Occupancy Rate Of Beds (%)
Average Length Of Stay (days)
Beds Opened (units)
Bed Turnover A Year (x)
% of fgn patients to patient load

35.0
30.0

25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Bangkok Chain Hospital

Bangkok Dusit Med Service

Bumrungrad Hospital

Chularat Hospital

SOURCE: CIMB, COMPANY REPORTS

99

Property DevelopmentThailand
December 12, 2014

Central Pattana
CPN TB / CPN.BK

Market Cap

Avg Daily Turnover

Free Float

US$6,288m

US$5.85m

45.0%

THB206,448m

THB193.7m

4,488 m shares

Current

THB46.00

Target

THB61.00

Prev. Target

THB61.00

Up/Downside

32.6%
Conviction|

Resilient urbanised growth

CIMB Analyst(s)

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

0.7

0.2

-3.9

Absolute

-2.1

-3.2

7.6

Major shareholders

% held

Central Holdings Co.,Ltd.


HSBC (SINGAPORE) NOMINEES PTE
LTDHSBC (SINGAPORE) NOMINEES PTE LTD
STATE STREET BANK EUROPE LIMITED

26.2
5.75.7
4.5

We expect CPNs EPS to rise at a CAGR of 15% over FY14-16, driven by


continued domestic expansion, rising rental rates, high OR and
effective costs controls. We maintain Add rating and an SOP-based
target price of THB61. Overseas expansion and unlocking value of its
promising assets would boost its longer-term returns.
A dominant retail space developer in
Thailand (20% market share in BMA
and 50% in upcountry), CPN is well
positioned to benefit from the lifestyle
changes, urbanisation trend and a
favourable
demographic
profile.
Along with the improving growth
outlook and a stronger balance sheet,
CPNs valuation has become less
demanding, at 22x CY16 P/E (0.5 s.d.
below its 5-year mean of 30x).

Solid growth

We expect its EPS to rise 13-18% over


FY14-16, mainly driven by continued
new mall openings (nine new malls by
2016; up to 20 new malls by 2018)
expanding leasable area, continued
rental rate hikes (still above inflation),
contract renewals with higher rentals,
high occupancy rate (OR), first-mover
advantage in upcountry, and more
effective cost controls backed by
economies of scale. Meanwhile, plans
to expand to Malaysia would add a
revenue source in the near future.

Vol m

Price Close

111.4

45.0

103.6

40.0

95.8

35.0
25
20
15
10
5

88.0

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range




 
Current

Target

Strong balance sheet

CPNs
gearing
has
improved
significantly over the past few years,
falling from 1x in FY12 to 0.5x in 3Q14,
thanks to its successful fund raising
through property funds, lower
funding costs and improved core
business fundamentals. Undoubtedly,
CPNs 5-year business plan for
sustainable growth of 15% p.a. should
be well supported by its healthier
balance sheet and cash position.

Protected by potential
unlocking of value

There is intrinsic value in CPNs


existing assets (mainly shopping malls)
that has not been monetised yet. We
estimate this value to be at
THB45/share, based on the income
approach. This could be perceived as
downside protection for the share
price in the worst case scenario (share
price falls to no value; very unlikely),
while it also provides upside in the
best case scenario which could send
the share price up by around THB45.

Financial Summary

Relative to SET (RHS)

50.0

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
16,762
7,845
6,189
2.03
114%
22.71
0.37
0.80%
15.50
NA
82.5%
3.87
19.0%

Dec-13A
19,913
9,610
6,293
1.40
(31%)
32.81
0.46
1.00%
23.35
NA
48.8%
5.61
20.1%

Dec-14F
22,663
11,126
7,252
1.58
13%
29.07
0.66
1.43%
20.25
119.6
45.8%
5.01
18.2%
0.127%
1.00

Dec-15F
26,884
13,289
8,534
1.87
18%
24.62
0.77
1.68%
17.10
20.0
44.8%
4.46
19.2%
0.109%
1.00

Dec-16F
31,228
15,377
9,644
2.12
13%
21.74
0.87
1.90%
14.89
20.5
43.3%
3.96
19.3%
0.095%
0.97

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Central PattanaThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
19,913
9,372
9,610
(3,684)
5,926
(813)
686
1,796
7,595

Dec-14F
22,663
10,830
11,126
(4,179)
6,947
(799)
789
1,879
8,815

Dec-15F
26,884
12,974
13,289
(4,927)
8,362
(921)
868
2,113
10,422

Dec-16F
31,228
15,084
15,377
(5,733)
9,643
(1,128)
955
2,339
11,810

7,595
(1,206)

8,815
(1,605)

10,422
(1,911)

11,810
(2,171)

6,389
(97)
0

7,210
(108)
0

8,512
(128)
0

9,639
(145)
0

0
6,293
6,293
6,293

150
7,252
7,102
7,102

150
8,534
8,384
8,384

150
9,644
9,494
9,494

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-14F
733

Dec-15F
4,845

Dec-16F
7,533

3,630
0
0
5,499
2,353
56,932
11,584
1,171
72,040
900
5,154
9,083
322
15,458
13,788

4,759
0
0
5,492
2,706
60,381
17,037
1,825
81,949
400
3,924
9,593
483
14,399
15,288

5,646
0
0
10,491
3,112
64,040
18,059
1,880
87,091
400
4,424
10,170
580
15,573
20,788

6,558
0
0
14,091
3,547
67,921
19,143
1,932
92,543
400
5,424
10,773
696
17,292
24,288

11,313
25,101
155
40,715
36,824

16,407
31,695
156
46,250
41,191

14,789
35,577
105
51,256
46,326

12,816
37,104
111
54,507
52,128

36,824

41,191

46,326

52,128

Key Ratios

Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
9,610

Dec-14F
11,126

Dec-15F
13,289

Dec-16F
15,377

995

957

994

1,669

471
4,960
(813)
(1,188)
14,709
(9,629)
(180)

(114)
6,758
(799)
(1,763)
16,202
(14,396)
150

(202)
7,740
(921)
(2,084)
18,778
(14,586)
150

(267)
8,772
(1,128)
(2,362)
21,386
(15,971)
150

(9,809)
(8,304)
6,616

(14,246)
(230)
0

(14,436)
6,000
0

(15,821)
4,500
0

(2,070)

(2,944)

(3,465)

(3,915)

1,400
(2,357)

4,243
1,069

2,097
4,632

2,241
2,826

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0

Jan-11

Jan-12

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


40.3%
18.8%
13.8%
18.6%
16.2%
66.7%
22.5%
15.8%
19.4%
15.7%
46.8%
48.3%
49.1%
49.4%
49.2%
(9.80)
(4.00)
(4.21)
(4.63)
(5.03)
11.89
8.20
9.18
10.32
11.61
4.34
7.29
8.69
9.08
8.55
12.5%
15.9%
18.2%
18.3%
18.4%
13.0%
32.9%
40.6%
40.6%
40.6%
16.46
17.01
20.85
20.18
20.43
12.98
21.83
19.78
19.68
20.03
40.7%
64.4%
74.4%
51.5%
53.7%
9.5%
11.1%
12.0%
12.9%
12.8%

Key Ratios

12-month Forward Rolling FD P/E (x)


40.0

0.0
Jan-10

Dec-13A
1,869

Jan-13

Jan-14

Central Pattana

Dec-13A
18.8%
22.5%
48.3%
(4.00)
8.20
7.29
15.9%
32.9%
17.01
21.83
64.4%
11.1%

Dec-14F
13.8%
15.8%
49.1%
(4.21)
9.18
8.69
18.2%
40.6%
20.85
19.78
74.4%
12.0%

Dec-15F
18.6%
19.4%
49.4%
(4.63)
10.32
9.08
18.3%
40.6%
20.18
19.68
51.5%
12.9%

Dec-16F
16.2%
15.7%
49.2%
(5.03)
11.61
8.55
18.4%
40.6%
20.43
20.03
53.7%
12.8%

SOURCE: CIMB, COMPANY REPORTS

101

HotelsThailand
December 12, 2014

Central Plaza Hotel


CENTEL TB / CENT.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,439m

US$2.22m

45.0%

THB47,250m

THB72.60m

1,350 m shares

Current

THB35.00

Target

THB38.50

Prev. Target

THB38.50

Up/Downside

10.0%
Conviction|

Turnaround in tourism and food

CIMB Analyst(s)

CENTEL is poised to ride the recovery in tourism and consumer


consumption next year. With that, coupled with a low base, we expect
the company to post strong earnings growth in 2015. Its aggressive
expansion programmes will drive its earnings growth thereafter.

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

1.2

-12.1

-12.7

Absolute

0.0

-13.6

1.4

Major shareholders

% held

Chirathivat family

45.0

Show Style "View Doc Map"

We reiterate our recently upgraded


Add call, with an unchanged target
price of THB38.50, based on 24x
CY16 P/E, its 4-year historical average.
We believe that a strong rebound in
tourist arrivals and a jump in
quarterly earnings will catalyse its
share price.

An 8% increase in Revpar in
2015
Recovery in its Bangkok hotels should
help improve its overall occupancy
rate. About 28% of its hotel rooms are
in Bangkok, another 65% in the
upcountry and the remaining 7%
overseas.
We expect CENTELs hotel occupancy
rate to improve from about 73% in
2014 to 75% next year and its Revenue
per available room (Revpar) to rise to
8% next year from -6% in 2014.
Its gross margin on the hotel business
is also expected to increase from
about 34% in 2014 to 36% in 2015.

Aggressive expansion on the


hotel business
CENTEL currently has 45 hotels in its
portfolio, with 15 either owned or via
JVs, and 30 under management
contracts. It plans to add another 32
Price Close

111.0

42.0

104.0

37.0

97.0

32.0

90.0

27.0

83.0

22.0
15

76.0

Vol m

10

5
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


35.00
41.25

24.10

38.50
Current

Target

hotels over the next few years, most of


which will be under management
contracts. 40% of the hotels in the
pipeline will be in Thailand and the
remaining 60% will be in other Asian
countries. This should lower the
concentration risk of its hotel
business.
As such, its hotel expansion plan will
not put much burden on its balance
sheet. We expect its net gearing to
decline to 75% by the end of next year
from about 90% currently.

Rationalisation of the food


business
After closing down 43 non-performing
food outlets in 2014, Centel plans to
close an additional 24 branches next
year, most of which are in the light
food category. Its network of food
outlets totalled 773 at end-2014 and
we expect the company to add about
80 outlets next year.
With the closure of non-performing
outlets,
CENTEL
expects
its
same-strong-sales growth (SSSG) to
increase from 1% this year to 3-4%
next year. Our estimates are more
conservative, at -1% and 0%,
respectively.

Financial Summary

Relative to SET (RHS)

47.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
14,504
3,732
1,596
0.85
108%
41.37
0.15
0.43%
15.88
191.4
120%
5.27
15.5%

Dec-13A
17,096
3,892
1,322
0.98
16%
35.74
0.59
1.69%
14.94
40.1
98%
4.57
13.7%

Dec-14F
17,616
3,486
1,145
0.85
(13%)
41.26
0.49
1.40%
16.58
185.6
90%
4.36
10.8%
0%

Dec-15F
19,231
4,239
1,773
1.31
55%
26.64
0.42
1.21%
13.47
70.1
75%
3.93
15.5%
0%

Dec-16F
21,142
4,734
2,144
1.59
21%
22.04
0.66
1.88%
12.09
55.8
70%
3.56
16.9%
0%

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Central Plaza HotelThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
17,557
8,183
3,892
(1,578)
2,314
(507)
22
0
1,829

Dec-14F
18,109
8,068
3,486
(1,426)
2,060
(483)
63
0
1,640

Dec-15F
19,759
9,020
4,239
(1,458)
2,781
(455)
66
0
2,393

Dec-16F
21,707
9,966
4,734
(1,486)
3,248
(462)
69
0
2,855

1,829
(453)

1,640
(410)

2,393
(574)

2,855
(657)

1,377
(55)

1,230
(85)

1,818
(45)

2,199
(55)

1,322
1,322
1,322

1,145
1,145
1,145

1,773
1,773
1,773

2,144
2,144
2,144

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
742
978
615
129
2,463
24,339
899
774
737
26,748
2,262
1,433
2,401
323
6,418
7,943
0
3,489
11,431
210
18,060
10,344
807
11,152

Dec-14F
335
886
676
142
2,040
24,259
1,751
770
782
27,561
2,524
1,140
2,928
429
7,021
7,200
0
3,417
10,617
256
17,894
10,829
878
11,707

Dec-15F
436
897
744
149
2,226
24,868
1,836
768
831
28,303
2,901
1,340
3,194
446
7,881
6,000
0
3,347
9,347
287
17,515
12,029
985
13,014

Dec-16F
396
925
819
164
2,303
26,466
1,930
768
886
30,050
3,075
1,354
3,575
464
8,468
6,000
0
3,279
9,279
320
18,067
13,286
1,000
14,286

Dec-13A
17.9%
4.3%
22.8%
(8.07)
7.66
4.57
24.7%
54.3%
19.15
21.19
84.27
7.6%
10.2%

Dec-14F
3.0%
(10.4%)
19.8%
(7.80)
8.02
4.27
25.0%
51.9%
18.43
23.47
90.69
6.6%
9.0%

Dec-15F
9.2%
21.6%
22.0%
(7.26)
8.91
6.12
24.0%
29.1%
16.07
24.14
94.87
9.2%
12.1%

Dec-16F
9.9%
11.7%
22.4%
(7.43)
9.84
7.03
23.0%
37.2%
14.96
24.35
96.61
10.6%
13.4%

Dec-13A
80.0%
4,360.0
8,717
743
66

Dec-14F
73.0%
4,490.8
10,663
800
57

Dec-15F
75.0%
4,715.3
11,764
860
60

Dec-16F
76.0%
4,951.1
12,084
930
70

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
3,892
25
276
(48)
14
800
(507)
(453)
3,999
(2,063)

Dec-14F
3,486
(853)
360
116
4
(14)
(483)
(410)
2,207
(1,120)

Dec-15F
4,239
(85)
197
8
2
(84)
(455)
(574)
3,248
(1,809)

Dec-16F
4,734
(94)
252
8
(0)
(36)
(462)
(657)
3,744
(2,799)

(157)
(2,220)
(600)
0

(187)
(1,307)
(646)
0

(143)
(1,952)
(623)
0

(272)
(3,071)
174
0

(798)

(661)

(573)

(887)

(1,398)
381
1,179
2,286

(1,307)
(406)
255
1,383

(1,195)
101
674
1,751

(713)
(40)
847
1,135

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

45.0

Average Occupancy Rate (%)


Avg room rate (night) (THB)
No. Of Rooms
No. Of Food Outlets
No. Of New Outlets

40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11
Central Plaza Hotel

Jan-12

Jan-13
Hotel Shilla

Jan-14
Minor International

SOURCE: CIMB, COMPANY REPORTS

103

ConstructionThailand
December 12, 2014

CH. Karnchang
CK TB / CK.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,341m

US$14.68m

60.3%

THB44,041m

THB477.3m

1,653 m shares

Current

THB26.00

Target

THB30.00

Prev. Target

THB30.00

Up/Downside

15.4%
Conviction|

Strong military ties

CIMB Analyst(s)

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

0.2

-5.7

30.3

Absolute

-1.0

-7.2

44.4

Major shareholders

% held

Trivisvavet family
Bangkok Bank

39.9
2.3

Show Style "View Doc Map"

CK has grown through its involvement in many military projects and


we would not be surprised if it were awarded a larger slice of
government infrastructure projects than others. Its decent order
backlog should also alleviate concern over the slow progress of public
infrastructure launches.
We maintain our Add call and THB30
SOP target price. Although the
progress of government infrastructure
spending seems slow, we believe that
CK has the highest chance of winning
bigger contracts than others as it is
close to the current government.
Success in securing big contracts is
likely to catalyse its share price.

Comfortable order backlog of


THB92bn
CKs order backlog stands at
THB92bn, which is equivalent to 2.6
years of revenues. Given its close ties
with the current government, we are
not too concerned about its revenue
and backlog at this stage even though
its chairman recently guided for flat
revenue growth next year.
CK has secured only THB7.3bn
contracts in 9M14 due to political
problems in 1H14. We expect it to win
THB40bn p.a. in 2015 and 2016.
Half of its current backlog is in Laos,
i.e. the Xayaburi hydroelectric dam
project and the other half is in
Thailand. As CK has already handled a

Price Close

139.3

22.0

119.9

17.0

100.4

12.0
200

81.0

150

Vol m

100
50
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


26.00
28.25

13.90

30.00
Current

Target

number of projects in Laos, it is more


likely than others to get other large
hydroelectric dam projects there.

Improving earnings
visibility
Over the past five years or 20 quarters,
CK was in the red for five quarters. It
was largely due to volatile gross
margins and a high debt burden. We
believe that with benign building
material prices in 2015 and decent
margins, especially for overseas
projects, CK will be able to maintain
its double-digit gross margins over the
next couple of years.

1.8x net gearing


CKs net gearing is still high, at 1.8x at
the end of 3Q14. We note that the
market value of its investment in its
affiliates is in excess of THB23bn,
more than enough for CK to divest to
pay off its debt if the need arises.

Financial Summary

Relative to SET (RHS)

27.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
20,685
1,107
568
0.34
NA
75.60
0.35
1.35%
46.56
80.7
269%
5.23
7.8%

Dec-13A
32,570
2,529
7,674
0.57
66%
45.42
0.03
0.10%
20.74
NA
190%
2.60
7.6%

Dec-14F
32,896
2,529
2,194
1.31
129%
19.83
0.25
0.96%
20.88
37.1
183%
2.40
12.6%
0%
1.37

Dec-15F
31,251
2,491
2,139
1.26
(4%)
20.59
0.30
1.15%
21.92
211.6
180%
2.20
11.2%
0%
1.53

Dec-16F
34,376
2,713
2,330
1.38
9%
18.90
0.50
1.92%
20.72
124.1
188%
2.05
11.2%
0%
1.33

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

CH. KarnchangThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
32,570
3,337
2,529
(697)
1,832
(1,538)
5,357
444
6,095
3,150
9,245
(1,533)
0
7,712
(38)
0

Dec-14F
32,896
3,234
2,529
(550)
1,979
(2,131)
2,398
225
2,471
0
2,471
(247)

Dec-15F
31,251
3,064
2,491
(620)
1,871
(2,214)
2,513
240
2,410
0
2,410
(241)

Dec-16F
34,376
3,370
2,713
(620)
2,093
(2,415)
2,689
256
2,622
0
2,622
(262)

2,224
(30)
0

2,169
(30)
0

2,360
(30)
0

2,194
2,194
2,194

2,139
2,139
2,139

2,330
2,330
2,330

7,674
946
946

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-14F
5,258
19,233
17,928
984
43,403
8,270
25,004
0
714
33,987
13,286

Dec-15F
4,403
21,156
19,698
1,034
46,291
9,097
26,251
0
790
36,137
12,358

Dec-16F
3,911
23,811
21,646
1,085
50,453
10,006
28,873
0
873
39,752
13,244

15,414
441
29,551
23,636

16,796
464
30,546
26,000

18,303
487
31,148
28,600

20,599
511
34,353
31,460

2,006
25,643
0
55,194
16,551
290
16,841

2,207
28,207
0
58,753
18,363
275
18,637

2,428
31,027
0
62,175
19,994
260
20,253

2,670
34,130
0
68,483
21,477
245
21,722

Dec-13A
57.5%
128%
7.77%
(19.33)
10.02
1.19
16.6%
0.6%
53.86
182.2
173.8
8.44%
4.02%

Dec-14F
1.0%
(0%)
7.69%
(20.09)
10.84
0.93
10.0%
15.6%
49.96
220.4
190.5
5.64%
3.53%

Dec-15F
(5.0%)
(2%)
7.97%
(21.58)
11.80
0.85
10.0%
19.2%
57.85
243.6
218.3
5.01%
3.14%

Dec-16F
10.0%
9%
7.89%
(24.08)
12.68
0.87
10.0%
29.4%
56.62
244.0
220.7
5.08%
3.28%

Dec-13A
107,050
32,781
22,900
N/A
N/A
N/A
N/A
N/A
N/A

Dec-14F
83,929
33,121
30,000
N/A
N/A
N/A
N/A
N/A
N/A

Dec-15F
92,438
31,491
40,000
N/A
N/A
N/A
N/A
N/A
N/A

Dec-16F
97,806
34,632
40,000
N/A
N/A
N/A
N/A
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
2,529

Dec-14F
2,529

Dec-15F
2,491

Dec-16F
2,713

(6,714)

(579)

(2,201)

(3,570)

0
(1,538)
(1,533)
(7,256)
(3,515)
8,454
(7,200)
0
(2,261)
9,499
0
0
(41)

0
(2,131)
(247)
(427)
(1,302)
671
(1,779)
0
(2,410)
4,009
41
0
(423)

0
(2,214)
(241)
(2,165)
(1,447)
703
(795)
0
(1,538)
3,911
0
0
(508)

0
(2,415)
(262)
(3,535)
(1,530)
738
(2,117)
0
(2,909)
6,798
0
0
(847)

0
9,457
(60)
(19)
(7,979)

0
3,627
790
1,172
(706)

0
3,403
(300)
208
(1,489)

0
5,951
(492)
355
(4,028)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

(THBm)
Outstanding Orderbook
Order Book Depletion
Orderbook Replenishment
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)

45.0
40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Dec-13A
5,393
16,911
17,894
937
41,136
7,518
22,734
0
646
30,899
13,696

Jan-11

CH. Karnchang

Jan-12

Jan-13

Italian-Thai Development

Jan-14
Sino-Thai Eng & Construction

SOURCE: CIMB, COMPANY REPORTS

105

HospitalsTHAILAND
December 12, 2014

Chularat Hospital
CHG TB / CHG.BK

Market Cap

Avg Daily Turnover

Free Float

US$623.2m

US$1.30m

35.4%

THB20,460m

THB42.09m

1,100 m shares

Current

THB18.60

Target

THB17.70

Prev. Target

THB17.70

Up/Downside

-4.8%
Conviction|

Strong growth but fully valued

CIMB Analyst(s)

Kitichan SIRISUKARCHA, CFP


T (66) 2 657 9232
E kitichan.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-4.4

12.2

71.9

Absolute

-5.6

10.7

86.0

Major shareholders

% held

Ms.Kannika Plussind
Mrs.Kobkul Panyapol
Mr.Abhirum Panyapol

18.1
11.2
10.3

Show Style "View Doc Map"

CHG operates the largest hospital chain in the eastern part of Bangkok
and has the highest profit margin. This strongly reflects its competitive
strength while the recent amendments to Thailands Social Security
benefits should further boost its profitability. Moreover, it has the most
aggressive expansion plan, supported by its abundant cash in hand.
Despite our positive view on CHGs
growth in the long term, we believe its
share price is now demanding at 37x
FY15 P/E. As such, we maintain our
Reduce rating and DCF-based target
price of THB17.70 (WACC 7.40%,
LTG 3%). We prefer BGH, which
trades at a lower FY15 P/E of 31x, and
has comparable profit growth of
17-18% yoy.

Largest hospital chain in the


eastern part of Bangkok
CHG was established in 1986 and
currently operates 10 medical
facilities including three mid-size
hospitals (Chularat 3, 9 and 11) and
seven clinics. The CHG network has a
total of 386 beds (inpatient
department, IPD) and 87 medical
examination
rooms
(outpatient
department, OPD). CHG is a key
player in the low- to middle-income
market. All CHG medical facilities are
located near factories and industrial
estates. Therefore, its main target
groups are low- and middle-income

Price Close

18.3

176

13.3

133

8.3
20

90

Vol m

10
5
Dec-13

Mar-14

Jun-14

Sep-14

Source: Bloomberg

EFAPChartPriceVolRelDaily|

52-week share price range




Current

Target

Ongoing expansion
Given CHGs high IPD and OPD
occupancy rate of 70% (vs. 50-60% of
its peers), we have a positive view on
its expansion plan for future growth.
The company plans to expand its IPD
and OPD capacities by increasing the
number of beds from 386 at end-2013
to 687 by end-2017 (+78%) and OPD
examination rooms (+82%) from 87
rooms to 159 rooms by 2017.

Strong balance sheet


CHG has a strong balance sheet, with
more than THB1bn cash in hand, no
debt and generates THB400m-600m
cashflow per year, ample to support
its future M&As and expansion plans.
Management is guiding a capex of
THB1.89bn (construction cost of
THB1.54bn and renovation cost of
THB350m) for the next 3 years. We
believe CHG will not need to raise
capital.

Financial Summary

Relative to SET (RHS)

15

families,
factory
workers
and
employees of companies in industrial
estates.

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)

Dec-12A
1,863
530.0
336.1
0.51
(32.2%)
36.47
0.19
1.01%
22.84
47.8
(13.4%)
14.53
35.8%

Dec-13A
2,221
598.7
414.4
0.42
(17.9%)
44.43
0.23
1.25%
28.89
NA
(42.5%)
7.75
22.0%

Dec-14F
2,677
732.9
507.3
0.46
10.2%
40.33
0.26
1.42%
26.63
136.5
(33.1%)
7.16
18.5%
1.00

Dec-15F
3,130
857.0
591.4
0.54
16.6%
34.59
0.32
1.74%
23.56
32.2
(8.8%)
6.62
19.9%
1.01

Dec-16F
3,554
955.3
633.5
0.58
7.1%
32.30
0.38
2.02%
20.05
NA
(39.4%)
6.18
19.8%
0.93

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Chularat HospitalThailand
December 12, 2014

Profit & Loss

Balance Sheet

(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
2,221
886
599
(111)
488
19
0
13
519

Dec-14F
2,677
1,081
733
(120)
613
10
0
12
634

Dec-15F
3,130
1,264
857
(140)
717
10
0
12
739

Dec-16F
3,554
1,435
955
(189)
766
14
0
12
792

519
(105)

634
(127)

739
(148)

792
(158)

414

507

591

633

414
414
414

507
507
507

591
591
591

633
633
633

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-13A
1,126
563
75
4
1,767
1,082
0
11
135
1,228
0
1
269
71
341
4

Dec-14F
990
670
84
5
1,748
1,449
0
10
135
1,594
41
3
300
81
424
1

Dec-15F
294
784
98
5
1,181
1,409
0
10
955
2,374
21
1
350
79
451
0

Dec-16F
1,337
890
111
6
2,344
2,120
0
10
135
2,265
31
0
398
84
513
0

0
4
11
356
2,639

47
48
15
487
2,856

0
0
13
465
3,092

773
773
14
1,300
3,312

2,639

2,856

3,092

3,312

Dec-13A
19.2%
13.0%
26.9%
1.02
2.40
256
20.2%
61.6%
23.85
19.17
68.54
39.4%
26.2%

Dec-14F
20.5%
22.4%
27.4%
0.86
2.60
2,111
20.0%
57.2%
22.25
18.16
65.02
32.1%
22.4%

Dec-15F
16.9%
16.9%
27.4%
0.25
2.81
4,347
20.0%
60.0%
22.12
17.78
63.58
29.1%
24.1%

Dec-16F
13.6%
11.5%
26.9%
1.19
3.01
15,491
20.0%
65.4%
22.48
18.08
64.62
21.7%
24.1%

Dec-13A
100,678.0
4,855.8
76.0%
N/A
386.0
N/A
N/A

Dec-14F
125,573.9
5,584.4
75.0%
N/A
462.0
N/A
N/A

Dec-15F
143,317.1
6,142.8
75.9%
N/A
517.0
N/A
N/A

Dec-16F
158,475.3
6,450.0
74.0%
N/A
587.0
N/A
N/A

Key Ratios

Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
599

Dec-14F
733

Dec-15F
857

Dec-16F
955

(1)

14

(197)
(2)
(105)
309
(431)
0
4
16
(411)

22
(0)
(127)
626
(486)
0
0
10
(476)

1,353

23
(0)
(148)
738
(101)
0
0
(1)
(102)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

25
(0)
(158)
829
(900)
0
0
4
(895)
0

(255)

(290)

(355)

(414)

(103)
994
892
(102)
(100)

2
(288)
(138)
150
150

(4)
(360)
277
636
637

0
(414)
(481)
(67)
(67)

Key Drivers

12-month Forward Rolling FD P/E (x)


45.0
40.0

No. Of Patient Admissions (m P.a.)


Revenue Per Patient Bed (THB)
Occupancy Rate Of Beds (%)
Average Length Of Stay (days)
Beds Opened (units)
Bed Turnover A Year (x)
% of fgn patients to patient load

35.0
30.0

25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Chularat Hospital

SOURCE: CIMB, COMPANY REPORTS

107

RetailThailand
December 12, 2014

CP All
CPALL TB / CPAL.BK

Market Cap

Avg Daily Turnover

Free Float

US$11,561m

US$16.28m

58.6%

THB379,536m

THB529.6m

8,983 m shares

Current

THB42.25

Target

THB54.50

Prev. Target

THB54.50

Up/Downside

29.0%
Conviction|

Conveniently rising profits

CIMB Analyst(s)

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

0.6

-5.7

-13.5

Absolute

-0.6

-7.2

0.6

Major shareholders

% held

Charoen Pokphand Group


Thai NVDR
State Street Bank Europe Limited

41.5
4.4
3.1

Show Style "View Doc Map"

Although CPALL was once believed to be economically resilient, it has


also been affected by weak domestic demand in 2014. Nevertheless,
long-term growth is still promising, supported by the companys
ability to cater to the rapid changes in its customers lifestyles that are
gravitating towards convenience in food, products and services.
We maintain our forecast and our
DCF-based target price of THB54.50
(WACC 8.79%, LTG 3%). We believe
in CPALLs long-term growth story,
fuelled by its expansion to cater to the
busier Thai lifestyle and its potential
margin improvements as it gears up
towards becoming the convenience
food store for Thais.

opened in 2014. Management aims to


add at least 600 7-Eleven stores p.a.
to reach its target of 10,000 stores by
2018. Meanwhile, Makro will continue
ramping up its expansion to at least 8
stores p.a., making it the largest retail
operator in Thailand.

Short-term turbulence

CPALLs earnings should be on the


uptrend starting from 3Q14. SG&A
expenses are set to decline as all of
Makros acquisition and financial fees
will be behind it. Both 7-Eleven and
Makro are leaders in their own
segments and we believe they could
ride through these stagnant periods
and emerge once again when
domestic demand picks up.

While SSSG is expected to remain


weak through 9M14 and continue to
face challenges in 4Q14, we believe in
the ability of CPALL to turn its SSSG
around to positive based on the
shifting of its product mix towards
ready-to-eat foods which also yield
higher margins. With its new
marketing campaigns and products
expected to swing SSSG to a positive
in 2015 and all its Makro-related
acquisition
expenses
already
accounted for in 3Q14, we expect
3Q14 to have been the bottom for
CPALLs earnings.

Twin earnings generators


CPALL continues its aggressive
expansion with more than 650
7-Eleven stores and 13 Makro stores

Vol m

Price Close

101.4

41.0

90.7

36.0
50
40
30
20
10

80.0

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

Earnings to rise in 2015

Stay invested
CPALL continues to be our favourite
retail stock due to its undeniable
leadership position within Thailands
retail industry. The stock is trading at
24.4x FY15 P/E, below its 5-year
average forward P/E of 30x. The
recent share price weakness presents
an opportunity to buy. We maintain
our Add rating.

Financial Summary

Relative to SET (RHS)

46.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
197,045
16,586
11,049
1.64
(8.0%)
25.77
0.90
2.13%
14.93
23
(128%)
14.00
45.5%

Dec-13A
284,120
19,779
10,537
1.17
(28.5%)
36.02
0.90
2.13%
27.46
60
483%
13.19
37.7%

Dec-14F
378,555
27,124
10,617
1.18
0.8%
35.75
0.59
1.40%
20.30
NA
434%
11.13
33.8%
0%
0.96

Dec-15F
431,209
34,302
15,572
1.73
46.7%
24.37
0.87
2.05%
15.88
67
347%
9.06
41.0%
0%
1.07

Dec-16F
487,693
41,308
18,697
2.08
20.1%
20.30
1.04
2.46%
13.00
1,171
274%
7.41
40.2%
0%
1.02

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

CP AllThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
284,120
74,275
19,779
-4,625
15,154
-1,736
0
-498
12,921
0
12,921
-2,292

Dec-14F
378,555
90,437
27,124
-6,346
20,778
-7,373
0
0
13,406
0
13,406
-2,681

Dec-15F
431,209
104,328
34,302
-6,935
27,367
-7,742
0
0
19,626
0
19,626
-3,925

Dec-16F
487,693
119,714
41,308
-7,401
33,907
-6,982
0
0
26,925
0
26,925
-8,077

10,628
-91

10,724
-107

15,700
-129

18,847
-151

10,537
10,537
10,537

10,617
10,617
10,617

15,572
15,572
15,572

18,697
18,697
18,697

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
25,682
848
19,916
7,516
53,963
71,606
125
161,013
1,959
234,703
135,143

Dec-14F
13,815
983
19,734
7,516
42,048
80,521
125
160,752
1,959
243,357
0

Dec-15F
11,675
1,117
22,389
7,516
42,698
86,827
125
160,511
1,959
249,422
0

Dec-16F
2,651
1,261
25,204
7,516
36,632
92,648
125
160,289
1,959
255,021
0

54,734
10,921
200,798
50,000

50,519
10,921
61,441
180,682

57,316
10,921
68,237
172,685

64,522
10,921
75,444
155,513

4,860
54,860
0
255,658
28,781
4,226
33,007

4,860
185,541
0
246,982
34,090
4,334
38,423

4,860
177,545
0
245,782
41,875
4,462
46,338

4,860
160,373
0
235,816
51,224
4,613
55,837

Dec-13A
44.2%
19.3%
6.96%
-17.75
3.20
7
17.7%
76.7%
0.89
25.28
75.94
(190%)
12.7%

Dec-14F
33.2%
37.1%
7.17%
-18.58
3.79
3
20.0%
50.0%
0.88
25.12
66.67
8%
9.6%

Dec-15F
13.9%
26.5%
7.95%
-17.92
4.66
3
20.0%
50.0%
0.89
23.52
60.21
10%
12.6%

Dec-16F
13.1%
20.4%
8.47%
-17.02
5.70
5
30.0%
50.0%
0.89
23.67
60.59
11%
15.8%

Dec-13A
N/A
N/A
7,429
5.7%
N/A
N/A
64
7.2%

Dec-14F
N/A
N/A
8,079
-2.0%
N/A
N/A
76
5.0%

Dec-15F
N/A
N/A
8,679
5.0%
N/A
N/A
84
6.0%

Dec-16F
N/A
N/A
9,279
6.0%
N/A
N/A
92
6.0%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
19,779

Dec-14F
27,124

Dec-15F
34,302

Dec-16F
41,308

10,148

-4,168

4,008

4,247

-1,736
-2,292
25,900
-217,791
0

-7,373
-2,681
12,902
-15,000
0

-7,742
-3,925
26,643
-13,000
0

-6,982
-8,077
30,496
-13,000
0

13,052
-204,739
185,143
0

1,050
-13,950
-4,462
0

0
-13,000
-7,997
0

0
-13,000
-17,172
0

-8,085

-5,309

-7,786

-9,348

3,311
180,369
1,531
6,305
-176,625

-0
-9,770
-10,818
-5,509
6,571

0
-15,782
-2,140
5,646
21,523

0
-26,520
-9,024
324
24,595

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

45.0

ASP (% chg, main prod./serv.)


Unit sales grth (%, main prod./serv.)
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)

40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11
Big C Supercentre

Jan-12
CP All

Jan-13

Jan-14
Robinson Department Store

SOURCE: CIMB, COMPANY REPORTS

109

Technology ComponentsTHAILAND
December 12, 2014

Delta Electronics (Thailand)


DELTA TB / DELT.BK

Market Cap

Avg Daily Turnover

Free Float

US$2,926m

US$4.76m

36.9%

THB96,048m

THB155.6m

1,247 m shares

Current

THB77.00

Target

THB80.00

Prev. Target

THB80.00

Up/Downside

3.9%
Conviction|

Valuations not attractive yet

CIMB Analyst(s)

Although we like Deltas healthy balance sheet and ability to generate


stable positive FCF, we think the current valuation is not attractive
given the large price rally due to its inclusion in the MSCI Global
Standard Indices.

Thanakorn CHONGSUKSIRICHOK
T (66) 2 657 9227
E thanakorn.ch@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

4.2

20.0

42.2

Absolute

3.0

18.5

56.3

Major shareholders

% held

Deltron Holding Ltd


Delta Electronics Taiwan

27.7
20.0

Show Style "View Doc Map"

We maintain our Hold rating as the


stock is trading at 13.6x FY16 P/E or
1.7 s.d. above its 5-year mean, which
is not cheap. Our target price stays at
THB80 as we roll it forward to FY16
while keeping it pegged to 14x P/E, 2
s.d. above its mean.

Adjusting business mix


As Delta has experienced a slowdown
in the sales of certain products in the
ODM business, it is targeting to adjust
its ODM/regional business mix from
75:25 to 60:40 by 2023 in order to
diversify its product and geographical
risks. Given the potential demand for
telecom power and alternative energy
from the developing countries covered
by its regional business, we believe
Delta can capture growth in these
countries by integrating its knowledge
of power solutions with the provision
of after-sales service, helping to boost
its margins. The main markets for its
regional business are India (12%),
Slovakia (10%) and Brazil (4%).

Price Close

137.9

66.0

123.6

56.0

109.3

46.0
40

95.0

30
Vol m

20
10
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

Solid strong cash flow and


balance sheet
Deltas cash flow and balance sheet
are strong and we forecast the
company will be FCF positive. This
should enhance Deltas net cash
position and allow it to maintain its
decent dividend payments.

Potential acquisition to
support growth
Given Deltas strong net cash position,
we believe it will continue to seek
M&A opportunities to improve its
regional business, especially in the
alternative energy segment (2% of
revenue in 2013 to 10% in 2023). It
hopes to acquire an alternative energy
company with its own distribution
centre.

Not cheap
We think its recent price rally was due
to its surprise inclusion in the MSCI
Global Standard Indices. Delta is now
trading at 13.6x FY16 P/E or 1.7 s.d.
above its 5-year mean, which is not
cheap. Thus we maintain our Hold
rating.

Financial Summary

Relative to SET (RHS)

76.0

Dec-13

Revenue (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
Price To Sales (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
40,779
4,347
3.57
51.8%
21.54
2.36
1.20
1.56%
16.47
20.07
(53.9%)
4.27
21.1%

Dec-13A
41,201
5,416
4.41
23.4%
17.46
2.33
2.40
3.12%
14.49
20.93
(56.4%)
3.79
23.0%

Dec-14F
46,712
5,652
4.72
7.1%
16.31
2.06
2.70
3.50%
12.29
20.62
(56.9%)
3.48
22.3%
(0%)
0.96

Dec-15F
49,873
6,529
5.30
12.3%
14.52
1.93
2.93
3.81%
10.84
17.50
(58.3%)
3.17
22.8%
(0%)
1.01

Dec-16F
52,580
7,078
5.74
8.3%
13.41
1.83
3.18
4.13%
9.90
15.81
(59.8%)
2.89
22.6%
0%
1.00

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Delta Electronics (Thailand)Thailand


December 12, 2014

Profit & Loss

Balance Sheet

(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
41,201
11,752
5,642
(918)
4,724
131
18
610
5,569

Dec-14F
46,712
13,356
6,536
(976)
5,560
143
9
164
5,962

Dec-15F
49,873
14,561
7,230
(996)
6,234
163
6
205
6,694

Dec-16F
52,580
15,423
7,693
(1,016)
6,678
202
8
276
7,249

5,483
(67)
0
5,416
0

5,876
(71)
(153)
5,652
0

6,608
(79)
0
6,529
0

7,164
(86)
0
7,078
0

5,416
5,500
5,500

5,652
5,890
5,890

6,529
6,614
6,614

7,078
7,162
7,162

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-13A
14,953
8,254
5,949
1,018
30,174
4,767
0
951
973
6,691
667
0
8,969
684
10,320

Dec-14F
16,245
8,384
6,259
852
31,739
5,520
0
951
489
6,960
533
0
9,041
389
9,963

Dec-15F
18,078
8,951
6,619
852
34,500
5,807
0
951
489
7,247
427
0
9,496
378
10,301

Dec-16F
20,189
9,437
6,959
852
37,436
6,094
0
951
489
7,534
341
0
9,895
365
10,601

1,183
1,183
36
11,539
25,326

1,133
1,133
0
11,097
27,601

1,150
1,150
0
11,451
30,294

1,155
1,155
0
11,756
33,210

25,326

27,601

30,294

33,210

Dec-13A
1.0%
10.7%
13.7%
11.45
20.30
76.52
1.23%
54.4%
67.69
70.74
106.1
43.0%
20.3%

Dec-14F
13.4%
15.9%
14.0%
12.60
22.13
66.45
1.20%
57.1%
65.00
66.79
98.5
46.1%
21.7%

Dec-15F
6.8%
10.6%
14.5%
14.15
24.29
78.22
1.20%
55.3%
63.44
66.55
95.8
48.5%
22.3%

Dec-16F
5.4%
6.4%
14.6%
15.91
26.62
88.75
1.20%
55.3%
64.00
66.87
95.5
49.0%
21.9%

Dec-13A
N/A
3.3%
N/A
N/A
N/A
3.6%
N/A
N/A

Dec-14F
N/A
7.5%
N/A
N/A
N/A
3.8%
N/A
N/A

Dec-15F
N/A
9.0%
N/A
N/A
N/A
4.3%
N/A
N/A

Dec-16F
N/A
7.3%
N/A
N/A
N/A
2.9%
N/A
N/A

Key Ratios

Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
5,642
(18)
(885)
156
(1,346)
1,599
(131)
(67)
4,949
(571)

Dec-14F
6,536
(9)
(367)
0
1,118
(773)
(143)
(71)
6,292
(1,643)

Dec-15F
7,230
(6)
(473)
0
603
(568)
(163)
(79)
6,543
(1,198)

Dec-16F
7,693
(8)
(427)
0
632
(511)
(202)
(86)
7,091
(1,218)

206
(365)
5

143
(1,500)
(133)

250
(947)
(107)

286
(931)
(85)

(2,994)

(3,366)

(3,656)

(3,964)

0
(2,989)
1,596
4,589
4,522

0
(3,499)
1,292
4,658
4,706

0
(3,763)
1,833
5,490
5,515

0
(4,049)
2,111
6,074
6,084

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


30.0

ASP Change (%, Main Product)


Unit sales growth (%, main prod)
No. Of Lines (main Product)
Rev per line (US$, main prod)
ASP chg (%, 2ndary prod)
Unit sales grth (%, 2ndary prod)
No. Of Lines (secondary Product)
Rev per line (US$, 2ndary prod)

25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11

Delta Electronics (Thailand)

Jan-12

Jan-13

KCE Electronics

Jan-14
SVI Public Company Limited

SOURCE: CIMB, COMPANY REPORTS

111

PowerThailand
December 12, 2014

Demco PCL
DEMCO TB / DEMC.BK

Market Cap

Avg Daily Turnover

Free Float

US$303.9m

US$18.09m

70.5%

THB9,977m

THB589.9m

692.8 m shares

Current

THB14.40

Target

THB21.50

Prev. Target

THB21.50

Up/Downside

49.3%
Conviction|

Strong fundamentals

CIMB Analyst(s)

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-9.9

-6.2

68.2

Absolute

-11.1

-7.7

82.3

Major shareholders

% held

Mrs.Praphee Puipunthavong
Thai NVDR
Mr.Swart Puipunthavong

15.6
5.7
4.5

Show Style "View Doc Map"

News that WEH's major shareholder could be involved in a kidnapping


scam has sparked share price corrections across the Thai solar sector.
Demco, which owns 4% of WEH and is a major beneficiary of Demco,
saw the largest correction of 16%, which we think prices in the impact
of the cancellation of WEH's remaining wind farm projects.
However, Demco is one of Thailand's
leading EPC contractors for solar and
wind farms so there is a high
possibility that it will receive a 10%
market share of EPC work from
1.3GW of solar and 500MW of wind
farm projects. We maintain our Add
rating and SOP-based target price.
Near-term catalysts include earnings
from WEH's two highly-secure new
projects, Khaokor and Watabak.

Upside could turn into


downside from WEH
We previously calculated that based
on WEHs private placement (PP) of
3.2m shares at THB570/shr in Aug-14,
there is THB1.6bn upside to the value
of Demcos 4% stake, tripling the
value of Demcos stake in WEH from
THB800m to THB2.4bn. This could
translate into THB2.3/shr based on
the current outstanding shares of
692m or THB1.9/shr upside to
Demcos share price after factoring in
the PP.

Limited valuation downside


from WEH
Given the events surrounding WEH's
founder and major shareholder, we

Price Close

192

10.2

135

5.2
400

78

300
Vol m

200
100
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

now believe that Demco could see


downside of up to THB6.8/shr,
comprising THB2.9/shr from Demco's
holdings in WEH's remaining wind
projects and THB3.8/shr from the
cancellation of WEH's wind farm
projects. We recommend investors
accumulate Demcos stock ahead of its
estimated strong earnings momentum
in 2015, which will not be affected by
the outcome for WEH. We believe
that the market has already penalised
Demco for losses from WEH's
remaining wind farm projects, which
we estimate to be THB2.9/shr.

Secured mid-term growth


We believe that Demco remains
attractive as a leading EPC contractor
for substations and transmission lines
for the solar and wind farms which
targeted for commercial operating
dates (COD) in 2015. In our view,
recurring income from its four wind
farm projects will continue to
generate
earnings
for
Demco,
regardless of the outcome of this
episode involving WEH's major
shareholder.

Financial Summary

Relative to SET (RHS)

15.2

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
5,940
567.3
396.0
0.72
169%
18.16
0.25
1.70%
16.02
NA
62.1%
4.66
28.6%

Dec-13A
5,487
290.6
357.3
0.52
(28%)
25.10
0.08
0.53%
36.06
NA
16.1%
3.18
14.8%

Dec-14F
5,081
360.8
485.9
0.70
36%
20.53
0.16
1.11%
29.65
13.48
20.3%
2.81
14.5%
0%
1.07

Dec-15F
7,869
556.0
661.3
0.95
36%
15.09
0.20
1.39%
18.64
9.32
9.5%
2.45
17.3%
0%
1.01

Dec-16F
8,261
542.1
739.2
1.07
12%
13.50
0.24
1.67%
20.14
NA
20.2%
2.15
17.0%
0%
1.09

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Demco PCLThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
5,487
679
291
(22)
268
(78)
169
49
408
0
408
(53)

Dec-14F
5,081
1,020
361
(8)
353
(32)
221
10
552
0
552
(66)

Dec-15F
7,869
1,578
556
(24)
532
(52)
268
10
759
0
759
(98)

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
8,261
1,656
542
(67)
476
(38)
381
10
829
0
829
(89)

354
3
0

486
0
0

661
0
0

739
0
0

357
357
357

486
486
486

661
661
661

739
739
739

Cash Flow

Dec-13A
370
2,256
252
335
3,213
267
2,367
22
9
2,666
869

Dec-14F
1,048
2,256
211
311
3,826
431
2,367
22
9
2,830
400

Dec-15F
1,991
2,256
327
481
5,055
1,037
2,367
22
9
3,436
440

Dec-16F
1,160
2,421
344
505
4,430
2,051
2,367
22
9
4,449
484

1,273
547
2,689
5

779
506
1,685
1,368

1,206
784
2,431
1,936

1,267
823
2,574
1,615

50
55
0
2,744
3,134
1
3,135

50
1,418
0
3,104
3,551
1
3,552

50
1,986
0
4,417
4,074
1
4,074

50
1,665
0
4,239
4,640
1
4,640

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
291
169
226

Dec-14F
361
221
(469)

Dec-15F
556
268
419

Dec-16F
542
381
(106)

(11)
0
(78)
(69)
527
(70)
0
(1,070)
216
(925)
(415)
987
0
(69)

(210)
0
(32)
(73)
(204)
(172)
0
0
221
49
895
0
0
(69)

(258)
0
(52)
(109)
824
(630)
0
0
268
(362)
608
0
0
(139)

(371)
0
(38)
(99)
309
(1,080)
0
0
381
(699)
(277)
0
0
(173)

62
564
166
(813)
(320)

7
832
678
740
(115)

11
480
943
1,070
535

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Dec-13A
(7.6%)
(49%)
5.30%
(0.73)
4.52
3.45
13.1%
14.9%
146.5
17.36
82.80
13.0%
7.6%

Dec-14F
(7.4%)
24%
7.10%
(1.04)
5.13
8.91
12.0%
22.8%
162.1
20.82
92.22
21.4%
7.7%

Dec-15F
54.9%
54%
7.07%
(0.56)
5.88
7.34
12.9%
21.0%
104.6
15.63
57.59
21.8%
9.4%

Dec-16F
5.0%
(2%)
6.56%
(1.36)
6.70
6.07
10.8%
22.5%
103.6
18.60
68.53
17.8%
7.8%

Dec-13A
788.4
90.0
N/A
N/A
N/A
15.0%

Dec-14F
1,576.8
180.0
N/A
N/A
N/A
15.0%

Dec-15F
1,622.5
185.2
N/A
N/A
N/A
15.0%

Dec-16F
2,673.7
305.2
N/A
N/A
N/A
15.0%

10
(440)
(831)
(667)
(312)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

45.0

Power Despatched (GWh)


Capacity (MW)
Average Capacity Utilisation (%)
Avg tariff/ASP per kwh (% chg)
Fuel Cost Per Kwh (% Change)
Industry Reserve Margin (%)

40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11
Demco PCL

Jan-12

Jan-13

Energy Absolute

Jan-14
Gunkul Engineering

SOURCE: CIMB, COMPANY REPORTS

113

PowerThailand
December 12, 2014

Energy Absolute
EA TB / EA.BK

Market Cap

Avg Daily Turnover

Free Float

US$2,954m

US$6.43m

33.2%

THB96,980m

THB210.0m

3,730 m shares

Current

THB26.00

Target

THB25.00

Prev. Target

THB25.00

Up/Downside

-3.8%
Conviction|

Solid but priced in

CIMB Analyst(s)

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

5.2

9.4

210.9

Absolute

4.0

7.9

225.0

Major shareholders

% held

Mr. Sompoch Arhunai


First Asia Investment
Mrs. Mookda Boonsiang

40.5
12.6
3.5

Show Style "View Doc Map"

Although EAs 2014 results were undoubtedly solid, the 40% share
price run-up since our initiation in July leaves little room for upside.
Without additional growth from new solar capacity from the next
round of government bidding, we see greater downside risk given
potential project delays and its stretched valuation of 19x CY17 P/E.
We maintain our DCF-based target
price, which stays at THB25 (WACC
4.7%), our EPS forecasts and our
Reduce call given its rich valuation.
We believe its current price already
incorporates earnings growth from all
its solar and wind projects in its
pipeline. We also believe that EAs
chances of securing new solar and
wind farm capacities are low.

Financing risk

Strong outlook but priced in

Switch to Gunkul

We expect its earnings growth


momentum to continue in 2015 due to
seasonality
and
the
expected
completion of the 90MW solar farm in
Dec 14. This should drive earnings
growth of 80% in FY15. The expected
increase in gearing to fund its
aggressive capacity expansion will be
the key risk for the share price and
could limit its chances of securing the
new capacities for solar and wind
farms in 2015-16, scheduled to be
announced by the regulator by 1Q15.

Vol m

Price Close

372

25.2

312

20.2

252

15.2

192

10.2

132

5.2
100
80
60
40
20

72

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range




Current

Target

The company plans to construct two


90MW solar power plants in 2014 and
2015. The investment budget for the
project is THB8.5bn for each plant.
Since the total investment required is
substantially high, the company may
not be able to finance the solar farm
projects according to the scheduled
timeline.
We recommend investors switch to
Gunkul given EAs limited upside
potential in the EPC business while
Gunkul is a key EPC company that is
well positioned to benefit from the
upcoming solar and wind farm
projects. Also, as EA focuses on
Thailand, we believe it is missing out
on the growth potential that
Thailands neighbouring countries
offer. Moreover, EAs P/E valuation is
higher than Gunkuls.

Financial Summary

Relative to SET (RHS)

30.2

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
4,440
159
107
0.03
64%
761.8
0.01
0.03%
530.7
NA
99%
73.02
10.1%

Dec-13A
3,936
585
270
0.07
114%
335.6
0.02
0.06%
175.2
NA
103%
22.46
9.8%

Dec-14F
8,989
2,312
1,584
0.42
487%
61.8
0.06
0.21%
45.1
6.68
110%
16.68
31.0%
0%
1.03

Dec-15F
11,662
4,535
2,845
0.76
80%
34.4
0.20
0.76%
25.3
NA
191%
11.58
39.7%
0%
0.93

Dec-16F
14,723
6,939
4,228
1.13
49%
23.2
0.32
1.22%
16.8
6.73
150%
8.33
41.9%
0%
0.81

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Energy AbsoluteThailand
December 12, 2014

Profit & Loss

Balance Sheet

(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-13A
3,936
781
585
(302)
283
(62)
0
63
284
0
284
(15)

Dec-14F
8,989
2,537
2,312
(335)
1,977
(213)
0
94
1,858
0
1,858
(274)

Dec-15F
11,662
4,791
4,535
(808)
3,727
(453)
0
141
3,414
0
3,414
(388)

Dec-16F
14,723
7,234
6,939
(1,365)
5,574
(928)
0
211
4,857
0
4,857
(437)

269
1
0

1,584
0
0

3,027
(182)
0

4,420
(193)
0

270
270
270

1,584
1,584
1,584

2,845
2,845
2,845

4,228
4,228
4,228

Dec-13A
1,572
526
220
83
2,402
8,093
702
252
17
9,063
851

Dec-14F
16,207
526
212
191
17,136
12,857
702
0
17
13,576
1,200

Dec-15F
5,221
526
226
247
6,220
26,219
702
0
17
26,938
1,320

Dec-16F
19,024
526
246
312
20,108
32,034
702
0
17
32,753
1,452

151
874
1,877
5,225

177
1,996
3,372
21,466

188
2,589
4,097
20,422

205
3,268
4,926
35,809

2
5,226
0
7,103
4,360
3
4,363

2
21,468
0
24,840
5,869
3
5,872

2
20,424
0
24,521
8,452
185
8,637

2
35,810
0
40,736
11,747
377
12,125

Dec-13A
(11%)
268%
14.9%
(1.21)
1.17
4.59
5.2%
21.3%
32.10
22.06
12.58
10.1%
4.4%

Dec-14F
128%
295%
25.7%
(1.73)
1.57
8.09
14.7%
13.2%
21.37
12.23
9.28
19.4%
10.3%

Dec-15F
30%
96%
38.9%
(4.43)
2.27
4.80
11.4%
26.2%
16.47
11.64
9.70
25.6%
13.8%

Dec-16F
26%
53%
47.1%
(4.89)
3.15
5.40
9.0%
28.2%
13.08
11.54
9.61
18.2%
14.2%

Dec-13A
186.9
8.0
N/A
N/A
N/A
15.0%

Dec-14F
975.3
98.0
N/A
N/A
N/A
15.0%

Dec-15F
1,847.6
188.0
N/A
N/A
N/A
15.0%

Dec-16F
4,002.6
434.0
N/A
N/A
N/A
15.0%

Key Ratios

Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
585
0
389

Dec-14F
2,312
0
1,048

Dec-15F
4,535
0
534

Dec-16F
6,939
0
611

62
0
(62)
(27)
947
(6,498)
0
(590)
(164)
(7,252)
4,880
2,991
0
(75)

94
0
(213)
(318)
2,923
(5,100)
0
0
252
(4,848)
16,590
0
0
(75)

141
0
(453)
(495)
4,262
(14,170)
0
0
0
(14,170)
(924)
0
0
(261)

211
0
(928)
(628)
6,206
(7,180)
0
0
0
(7,180)
15,519
0
0
(933)

14
7,810
1,505
(1,425)
(6,244)

44
16,559
14,635
14,665
(1,680)

107
(1,078)
(10,986)
(10,832)
(9,131)

191
14,777
13,803
14,544
58

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

45.0

Power Despatched (GWh)


Capacity (MW)
Average Capacity Utilisation (%)
Avg tariff/ASP per kwh (% chg)
Fuel Cost Per Kwh (% Change)
Industry Reserve Margin (%)

40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11
Demco PCL

Jan-12

Jan-13

Energy Absolute

Jan-14
Gunkul Engineering

SOURCE: CIMB, COMPANY REPORTS

115

Food & BeveragesTHAILAND


December 12, 2014

GFPT Public Company Limited


GFPT TB / GFPT.BK

Market Cap

Avg Daily Turnover

Free Float

US$748.5m

US$1.51m

44.0%

THB24,575m

THB49.10m

1,254 m shares

Current

THB19.60

Target

THB22.80

Prev. Target

THB22.80

Up/Downside

16.3%
Conviction|

Flying with the industry

CIMB Analyst(s)

Strong chicken export demand from Japan and lower feed costs fuelled
GFPTs growth in 2014, allowing GFPT and its partners to export more
chicken. Higher exports, industry growth and low feed cost should
extend the positive trend for its earnings outlook.

Kitichan SIRISUKARCHA, CFP


T (66) 2 657 9232
E kitichan.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

Relative

3.3

4.1

85.9

Absolute

2.1

2.6

100.0

Major shareholders

12M

% held

Sirimongkolkasem Sujin
Sirimongkolkasem Prasit
Sirimongkolkasem Virach

17.8
17.6
14.4

Show Style "View Doc Map"

We keep our FY14-16 EPS forecasts,


THB22.80 target price (CY16 P/E of
12x, 5-year historical average) and
Add rating. The anticipated share
price catalysts are stronger gross
profit margins due to healthy chicken
selling prices and a drop in feed cost
given the glut in the soybean market.

Promising outlook
GFPT has reaped the benefits of
Japans lifting of its ban on Thai
frozen chicken imports. Its export
volumes grew by 21% in 9M14, while
its partners chicken processing plants
showed 60% growth. Given that
Japan used to import up to 200,000
tonnes of frozen chicken from
Thailand annually, Thai export
volumes are projected to rise by 7% in
FY14 or by approximately 40k tonnes.
The growth for the industry remains
positive. According to Thai Broiler
Processing Exporters Association,
Thai export volumes are expected to
continue rising by 7% in FY16. Also,
management
expects
Thailands
exports of frozen chicken to Japan

Price Close

176

13.8

133

8.8
30

90

Vol m

20
10
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range




Current

Target

return to the 200,000-tonne level


within three years. We expect the
chicken volume to increase by 5-10%,
helped by its debottlenecking plan for
the breeder farm.

Strong margin intact


While higher demand should sustain
chicken prices, the lower feed cost will
boost its profitability. The slowdown
in the price of corn, which accounts
for 40% of total chicken cost, will
drive up gross margin from 4Q14
onwards. Moreover, the dampened
soybean outlook due to the oversupply
in the US will lead to lower soybean
meal (SBM) prices, which dropped
10% mom in Oct 14. As SBM accounts
for 30% of total chicken cost, we
believe GFPTs gross profit margin
picked up from a low of 13% in 3Q14
and will remain healthy at around 15%
until 1H15.

Undemanding price
GFPT appears cheap at 10x FY16 P/E
compared to its historical mean of
12x.

Financial Summary

Relative to SET (RHS)

18.8

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
Recurring ROE
% Change in Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A

Dec-13A

Dec-14F

Dec-15F

Dec-16F

15,370
767
232
0.18
(81%)
107.18
0.00
0.00%
55.49
NA
0.00%
4.28
3.9%

16,699
2,018
1,503
1.20
549%
16.52
0.35
1.77%
14.77
13.96
0.00%
3.37
22.7%

18,136
2,290
1,933
1.54
29%
12.84
0.35
1.77%
12.50
25.61
0.00%
2.80
23.8%

19,580
2,696
2,226
1.78
15%
11.15
0.46
2.32%
10.42
14.33
0.00%
2.36
23.0%

21,156
2,877
2,382
1.90
7%
10.42
0.53
2.69%
9.36
13.57
0.00%
2.03
21.0%

1.01

1.03

1.07

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

GFPT Public Company LimitedThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
16,699
2,803
1,705
(523)
1,183
(186)
221
312
1,529
0
1,529
(13)

Dec-14F
18,136
3,202
2,010
(559)
1,451
(174)
372
280
1,930
0
1,930
16

Dec-15F
19,580
3,702
2,416
(581)
1,835
(178)
385
280
2,322
0
2,322
(77)

Dec-16F
21,156
3,987
2,597
(601)
1,996
(183)
413
280
2,506
0
2,506
(105)

1,517
(14)

1,946
(13)

2,244
(18)

2,401
(19)

1,503
1,503
1,503

1,933
1,933
1,933

2,226
2,226
2,226

2,382
2,382
2,382

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-13A
311
1,101
3,217
18
4,646
6,061
1,616
11
769
8,457
2,047
80
2,921
28
5,076
80
198
278
292
5,645
7,370
88
7,458

Dec-14F
256
1,142
3,992
12
5,402
6,302
1,616
41
698
8,657
2,000
0
1,050
1,526
4,576
80

Dec-15F
248
1,233
4,244
15
5,741
6,521
1,616
41
691
8,869
2,005
0
1,116
332
3,453
80

Dec-16F
1,132
1,332
4,590
13
7,068
6,720
1,616
41
676
9,053
2,012
0
1,207
26
3,246
80

170
250
281
5,107
8,851
101
8,952

173
253
287
3,994
10,497
119
10,616

161
241
284
3,771
12,212
138
12,350

Dec-15F
7.96%
20%
12.3%
(1.47)
8.37
10.29
3.34%
30.0%
22.14
94.67
24.90
18.3%
15.1%

Dec-16F
8.05%
8%
12.3%
(0.77)
9.74
10.90
4.18%
30.0%
22.19
94.16
24.76
16.8%
14.4%

Key Ratios

Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
1,705
221
786

Dec-14F
2,010
372
(688)

Dec-15F
2,416
385
(277)

Dec-16F
2,597
413
(354)

523
9
(186)
13
3,071
(1,031)

559
(633)
(174)
(16)
1,432
(800)

581
(859)
(178)
77
2,145
(800)

601
(963)
(183)
105
2,217
(800)

(261)
(1,292)

338
(462)

388
(412)

412
(388)

(451)

(580)

(668)

(572)
(1,022)
(53)
969
1,143

(1,160)
(1,740)
(7)
1,733
1,911

(277)
(945)
884
1,829
2,012

0
(1,752)
(1,752)
27
1,778
1,964

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Dec-13A
8.65%
251%
10.2%
(1.51)
5.88
6.37
0.82%
30.0%
22.99
97.57
25.66
11.2%
11.9%

Dec-14F
8.60%
18%
11.1%
(1.46)
7.06
8.36
0.00%
30.0%
22.57
88.10
24.09
17.8%
13.6%

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

Broiler price (THB/Kg.)


Maize price (THB/Kg.)
Soybean meal price (THB/Kg.)
Average export price (THB/ton)
Domestic sale volume (Ton)
Export sale volume (Ton)
Gross margin (%)

45.0
40.0
35.0
30.0
25.0
20.0

Dec-12A Dec-13A Dec-14F Dec-15F


35.52
40.96
42.50
42.50
10.51
9.32
9.10
9.20
17.90
17.64
19.50
19.20
4,400
4,500
4,400
4,400
83,000
74,500
78,000
81,900
19,000
22,500
28,800
31,800
6.5%
13.7%
14.6%
15.9%

15.0
10.0

5.0
0.0
Jan-10

Jan-11

Jan-12

GFPT Public Company Limited

Jan-13

Jan-14

MSM Malaysia Holdings

QL Resources

SOURCE: CIMB, COMPANY REPORTS

117

IPPThailand
December 12, 2014

Glow Energy
GLOW TB / GLOW.BK

Market Cap

Avg Daily Turnover

Free Float

US$4,044m

US$2.27m

30.0%

THB132,755m

THB73.83m

1,463 m shares

Current

THB90.75

Target

THB97.00

Prev. Target

THB97.00

Up/Downside

6.9%
Conviction|

Key loser from lower oil price

CIMB Analyst(s)

We believe GLOW remains an unattractive power play given that its


earnings growth momentum will slow after peaking in 2014, while
potential upside from the new coal-fired power plant bidding is remote
and unlikely to come anytime soon. Its earnings from SPP will also
decline following the sharp drop in oil prices.

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-8.1

-1.2

12.8

Absolute

-9.3

-2.7

26.9

Major shareholders

% held

IPR-GDF SUEZ (Thailand) Co., Ltd.


GDF SUEZ Energy Asia, Turkey & Southern
Africa B.V.
HSBC (Singapore) Nominees Pte. Ltd.

44.1
25.0
3.1

Show Style "View Doc Map"

We maintain our Reduce call and


DCF-based target price of THB97
(WACC 5.6%). While we think GLOW
should continue to post decent
earnings in 2015 on the back of the
better performance of Gheco-One, we
think its share price has already
priced in the possible upside. The only
potential surprise upside, in over view,
is a special dividend payment that
could lift its yield to 7% and expected
to be announced in 2H15.

Peaking growth in 2014


With Gheco-One resuming its normal
operations in 3Q14, GLOW is now
reverting to posting stronger annual
earnings of above THB9bn. However
its earnings growth will start to die
down in 2016-17, and we see little
chance of securing more growth
within the next three years.

Key loser from lower oil


price
Unlike its IPP-driven peer RATCH,
GLOW will start to see its earnings
growth from SPP slow due to the
lower tariff that is linked to the oil
price-driven industry tariff pool. This
alone could result in an earnings
downside of up to 10% if oil prices
stay below US$90/bbl for a long
Price Close

129.6

91.0

120.7

81.0

111.8

71.0

102.9

61.0
6

94.0

Vol m

4
2
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

period of time.

Special dividend is the only


share price supporter
Although GLOW generally lacks
catalysts due to its lacklustre earnings
growth, we believe share price
downside is also limited given that
there is a good chance it will pay a
high special dividend of up to a 100%
pay out that should lead to a 7%
dividend yield. This is made possible
by its strong cash flow generation
from existing facilities and the
investment slowdown without any
major expansion on the horizon.

Switch to RATCH
We recommend a switch from GLOW
to RATCH given that: 1) RATCH has
superior growth momentum over the
next two years from its Hongsa
coal-fired power plant vs. GLOWs
lack of new capacity; and 2) RATCH
has a higher chance of winning more
capacity overseas, particularly the
countries neighbouring Thailand,
thanks to its solid ties with the
Electricity Generation Authority of
Thailand (EGAT).

Financial Summary

Relative to SET (RHS)

101.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
57,204
11,838
5,559
2.99
0.6%
32.28
2.11
2.19%
17.67
30.46
144%
3.84
12.3%

Dec-13A
69,207
17,614
7,214
5.61
87.7%
17.20
2.85
2.95%
11.77
NA
126%
3.48
21.2%

Dec-14F
72,599
20,737
9,311
6.36
13.4%
15.16
4.18
4.33%
9.57
23.38
87%
3.09
21.6%
0%
1.02

Dec-15F
73,290
20,544
9,890
6.76
6.2%
14.27
6.76
7.01%
9.28
19.38
62%
2.85
20.8%
0%
1.09

Dec-16F
74,941
20,492
10,424
7.13
5.4%
13.54
7.13
7.38%
9.07
17.39
49%
2.82
20.9%
0%
1.12

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Glow EnergyThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
69,207
18,383
17,614
(4,869)
12,745
(3,321)
(0)
(506)
8,918
0
8,918
(1,031)

Dec-14F
72,599
21,826
20,737
(5,561)
15,176
(2,910)
(0)
1,169
13,435
0
13,435
(1,551)

Dec-15F
73,290
21,570
20,544
(5,561)
14,983
(2,475)
(0)
1,180
13,688
0
13,688
(1,589)

Dec-16F
74,941
21,541
20,492
(5,561)
14,931
(2,066)
(0)
1,207
14,072
0
14,072
(1,639)

7,887
(672)
0

11,884
(2,573)
0

12,100
(2,210)
0

12,433
(2,009)
0

7,214
8,209
8,209

9,311
9,311
9,311

9,890
9,890
9,890

10,424
10,424
10,424

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
5,760
12,999
5,522
1,166
25,446
97,301
2
0
2,257
99,560
10,711

Dec-14F
8,212
13,289
5,516
1,223
28,240
93,240
2
0
2,257
95,499
8,459

Dec-15F
9,875
13,289
5,619
1,234
30,017
89,179
2
0
2,257
91,438
8,099

Dec-16F
8,520
13,289
5,802
1,262
28,872
85,119
2
0
2,257
87,377
8,132

9,858
979
21,548
54,594

9,849
1,027
19,334
47,827

10,032
1,036
19,167
39,728

10,358
1,060
19,550
31,597

1,604
56,198
0
77,746
40,576
6,683
47,260

1,604
49,431
0
68,765
45,718
9,257
54,974

1,604
41,333
0
60,500
49,489
11,467
60,956

1,604
33,201
0
52,751
50,024
13,476
63,499

Dec-13A
21.0%
48.8%
25.5%
(40.70)
27.74
3.76
11.6%
57.8%
57.43
37.35
72.71
12.1%
11.1%

Dec-14F
4.9%
17.7%
28.6%
(32.86)
31.25
5.16
11.5%
65.7%
66.08
39.67
70.84
14.0%
13.6%

Dec-15F
1.0%
(0.9%)
28.0%
(25.94)
33.83
5.95
11.6%
100.0%
66.18
39.29
70.15
14.3%
13.7%

Dec-16F
2.3%
(0.3%)
27.3%
(21.33)
34.20
7.05
11.6%
100.0%
64.90
39.14
69.88
14.9%
14.1%

Dec-13A
21,357.9
3,187.6
76.5%
3.9%
14.1%

Dec-14F
22,589.5
3,187.6
80.9%
-0.6%
-2.8%

Dec-15F
22,185.2
3,187.6
79.5%
2.6%
5.2%

Dec-16F
22,185.2
3,187.6
79.5%
2.2%
3.3%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
17,614

Dec-14F
20,737

Dec-15F
20,544
79

Dec-16F
20,492

(5,801)

(303)

1,115
6,938
(3,321)
(2,038)
14,506
(8,338)
0
0
(661)
(8,999)
(9,516)
0
0
(3,148)

1,169
2,000
(2,910)
(2,135)
18,558
(2,500)
0
(1,000)
(0)
(3,500)
(9,020)
0
0
(4,169)

1,180
2,000
(2,475)
(2,086)
19,243
(2,500)
0
(1,000)
(0)
(3,500)
(8,459)
0
0
(6,118)

1,207
2,000
(2,066)
(2,055)
19,717
(2,500)
0
(1,000)
(0)
(3,500)
(8,099)
0
0
(9,890)

(80)
(12,744)
(7,236)
(4,008)
8,896

584
(12,605)
2,452
6,038
17,998

497
(14,080)
1,663
7,284
18,260

416
(17,572)
(1,355)
8,119
18,334

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

139

Key Drivers

12-month Forward Rolling FD P/E (x)


25.0

Power Despatched (GWh)


Capacity (MW)
Average Capacity Utilisation (%)
Avg tariff/ASP per kwh (% chg)
Fuel Cost Per Kwh (% Change)

20.0

15.0
10.0
5.0
0.0
Jan-10

Jan-11
Glow Energy

Jan-12

Jan-13

Jan-14

Ratchaburi Electricity

SOURCE: CIMB, COMPANY REPORTS

119

PowerThailand
December 12, 2014

Gunkul Engineering
GUNKUL TB / GUNK.BK

Market Cap

Avg Daily Turnover

Free Float

US$804.1m

US$4.87m

35.3%

THB26,400m

THB158.6m

880.0 m shares

Current

THB30.00

Target

THB32.00

Prev. Target

THB32.00

Up/Downside

6.7%
Conviction|

Great firm to invest in

CIMB Analyst(s)

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

27.3

43.0

170.8

Absolute

26.1

41.5

184.9

Major shareholders

% held

GUNKUL grp
UOB Kay Hian
Yamaichi Intl. (HK)

60.0
4.6
2.3

Show Style "View Doc Map"

Gunkul's earnings outlook remains attractive, with the 100MW solar


farm and 50MW wind farm projects that are expected to be secured
and announced by Feb 15 as re-rating catalysts. Even without this,
Gunkul is attractive for its earnings growth ahead on the back of
secured wind farm projects and EPC backlog for renewable energy.
The share prices of all stocks in the
Thai solar and wind sectors declined
following news that Wind Energy
Holding's (WEH) major shareholder
was accused by police of being
involved in a kidnapping. This offers a
great buying opportunity as Gunkul
has no relationship with WEH. We
reiterate our Add rating and target
price of THB32, based on the average
of our DCF and SOP valuations
(WACC 6.8%).

Gunkul's strong earnings growth


momentum will be driven by 1) solid
backlog for solar and wind farm
projects in 2015-16, including its own
two wind farms, which have total
capacity of 120MW, and a 10% market
share in a 1.3GW solar farm that is
expected to be completed by the end
of 2015, and 2) higher recurring
equity and dividend incomes from
solar farm and gas engine projects.

An outperforming firm

During our one-day NDR in Taiwan in


early Dec, Gunkul's management
clearly stated that there would be
significant potential earnings upside
from the upcoming 100MW solar
farm and 50MW wind farm. The new
solar and wind farms will raise
Gunkul's total capacity from 44MW in
2014 to 329MW in 2017.

Gunkul's earnings have not only met


our higher-than-consensus forecasts
for FY14-15 but should also surpass
our and consensus earnings forecasts
for FY16-17. The outperformance will
be driven by the completion of its
wind farm project, which is targeting
a commercial operating date (COD) of
4Q15, and the potential increase in
engineering,
procurement
and
construction (EPC) work from its core
equipment sales.

Strong earnings growth


momentum

Price Close

310

25.2

227

15.2

143

5.2
60

60

Vol m

40
20
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

More growth prospects

Buy on weakness
We believe that concerns about
possible negative reactions to WEH's
major shareholder have nothing to do
with Gunkul. So, we suggest investors
buy on weakness ahead of earnings
growth momentum in FY15-17.

Financial Summary

Relative to SET (RHS)

35.2

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
4,306
746
779.6
1.04
362%
27.49
0.07
0.23%
21.8
4,841
129%
6.63
28.9%

Dec-13A
2,025
131
882.9
0.36
(65%)
69.48
0.05
0.15%
156.0
NA
13%
6.95
9.8%

Dec-14F
3,121
508
601.9
0.68
88%
38.63
0.08
0.27%
52.1
6
(11%)
7.33
18.5%
0%
1.04

Dec-15F
4,653
800
728.8
0.82
21%
36.64
0.16
0.53%
37.7
NA
73%
6.24
18.4%
0%
1.00

Dec-16F
5,212
1,366
978.8
1.10
34%
27.28
0.28
0.93%
24.5
NA
127%
5.25
20.9%
0%
0.74

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Gunkul EngineeringThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
2,025
457
131
(18)
114
(47)
150
826
1,042
0
1,042
(174)

Dec-14F
3,121
808
508
(38)
470
(63)
207
9
623
0
623
(79)

Dec-15F
4,653
1,205
800
(132)
668
(87)
216
9
806
0
806
(112)

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
5,212
1,801
1,366
(357)
1,010
(203)
227
9
1,043
0
1,043
(125)

868
15
0

545
57
0

694
35
0

918
61
0

883
237
237

602
602
602

729
729
729

979
979
979

Dec-13A
225
532
351
215
1,323
658
1,270
1,058
272
3,257
405

Dec-14F
4,302
532
76
331
5,241
620
1,270
1,058
272
3,219
400

Dec-15F
2,753
532
113
494
3,892
4,988
1,270
1,058
272
7,587
440

Dec-16F
2,137
532
112
553
3,334
9,132
1,270
1,058
272
11,731
484

340
323
1,069
214

63
498
962
3,467

94
743
1,277
5,565

93
832
1,409
8,278

176
390
0
1,459
2,849
272
3,121

176
3,643
0
4,604
3,641
215
3,856

176
5,741
0
7,019
4,281
180
4,461

176
8,455
0
9,864
5,082
119
5,201

Key Ratios

Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
131
150
161

Dec-14F
508
207
57

Dec-15F
800
216
76

Dec-16F
1,366
227
30

4,862
(775)
(47)
(184)
4,298
(2,108)
0
(312)
337
(2,084)
(2,823)
220
0
(40)

(162)
0
(63)
(91)
456
(76)
0
0
207
131
3,247
230
0
(40)

12
0
(87)
(134)
883
(4,837)
0
0
216
(4,621)
2,139
0
0
(89)

(63)
0
(203)
(168)
1,189
(4,787)
0
0
227
(4,560)
2,757
0
0
(178)

71
(2,571)
(357)
(608)
2,262

13
3,450
4,037
3,834
654

22
2,071
(1,667)
(1,600)
(3,566)

43
2,623
(748)
(614)
(3,113)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Dec-13A
(53.0%)
(82%)
6.5%
(0.60)
4.32
2.40
16.7%
3.5%
162.3
88.82
142.1
2.0%
2.4%

Dec-14F
54.1%
287%
16.3%
0.49
4.09
6.98
12.6%
11.8%
62.2
33.68
31.8
15.5%
8.3%

Dec-15F
49.1%
58%
17.2%
(3.65)
4.81
3.87
13.9%
19.5%
41.7
10.02
8.4
23.0%
8.3%

Dec-16F
12.0%
71%
26.2%
(7.44)
5.71
3.91
12.0%
25.5%
37.3
12.10
10.1
12.2%
8.7%

Dec-13A
235.6
26.9
N/A
N/A
N/A
15.0%

Dec-14F
507.2
57.9
N/A
N/A
N/A
15.0%

Dec-15F
507.2
57.9
N/A
N/A
N/A
15.0%

Dec-16F
1,032.8
117.9
N/A
N/A
N/A
15.0%

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

Power Despatched (GWh)


Capacity (MW)
Average Capacity Utilisation (%)
Avg tariff/ASP per kwh (% chg)
Fuel Cost Per Kwh (% Change)
Industry Reserve Margin (%)

45.0
40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11
Demco PCL

Jan-12

Jan-13

Energy Absolute

Jan-14
Gunkul Engineering

SOURCE: CIMB, COMPANY REPORTS

121

Property DevelopmentThailand
December 12, 2014

Hemaraj
HEMRAJ TB / HEMR.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,265m

US$5.05m

78.0%

THB41,538m

THB164.3m

9,709 m shares

Current

THB4.28

Target

THB4.63

Prev. Target

THB4.63

Up/Downside

8.1%
Conviction|

Upside limited

CIMB Analyst(s)

Given its weak presales and backlog, HEMRAJs outlook over FY15-16
seems unexciting. Moreover, we believe WHA Corps acquisition of at
least 50% stake HEMRAJ it is more value-accretive for WHA than for
the company in the near and longer term.

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-6.6

-2.5

24.0

Absolute

-7.8

-4.0

38.1

Major shareholders

% held

Horrungruang family
Credit Agricole (Suisse) SA
Nomura Singapore Limited

14.3
8.8
6.7

Show Style "View Doc Map"

We keep our EPS estimates. As its


utilities business and contribution
from
GHECO
One
are
well
communicated to the market, we see
limited upside surprise for HEMRAJ.
Potential disposal of its non-core
assets after its merger with WHA
could dampen its NAV in the near
term. Given the limited upside, we
maintain our Hold rating and target
price, based on 12x CY16 P/E (close to
5-year mean).

In a transition

HEMRAJ is in process of being taken


over by WHA, a leading developer of
logistics warehouses in Thailand. WHA
will acquire at least 50% stake in
HEMRAJ at THB4.5 per share The
SPA for the 22.5% stake held by
HEMRAJs major shareholders should
be executed by 31 Dec. WHA plans to
conclude its capital increase by 28 Feb
2015 and launch tender offers to the
general public thereafter. The entire
acquisition should be completed by 31
Mar 2015. HEMRAJ will stay listed
with its existing management team
intact, while its key founder Mr. Sawad
Hua-Rungrueng, will retire.

Price Close

150.0

4.40

130.0

3.40

110.0

2.40
200

90.0

150
Vol m

100
50
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

Benefit uncertain, outlook


shaky

We see more value enhancement for


WHA than for HEMRAJ from the deal.
HEMRAJs business will remain the
same while some of its non-core
assets (office building MU Tower and
300-rai of land on Koh Lan Island)
are likely to be divested, shrinking its
NAV. Organic growth from leveraging
WHAs warehouse expertise will take
time, in our view. On the other hand,
WHA will benefit from the deal
immediately e.g. the booking of
shared
income
and
valuation
enhancement from the investment in
HEMRAJ from an SOP perspective.
Given HEMRAJs poor land sales this
year and weak backlog, its FY15
outlook looks lacklustre. It has cut its
FY14 land presales target to 800 rai
(the second quarter of cuts in a row)
from an initial target of 1,400 rai.

Not a place to be in

We still prefer residential property


stocks (lower valuation at 9x CY16 P/E
vs. HEMRAJs 11x CY16 P/E, higher
yields of 4-5%) to industrial estate
stocks. The 10M14 BOI/FDI trend has
not shown a sustainable recovery
which
suggests
for
HEMRAJs
challenging industrial land presales,
revenue and earnings outlook.

Financial Summary

Relative to SET (RHS)

5.40

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
6,399
2,583
2,285
0.24
326%
18.18
0.07
1.63%
15.54
NA
81.7%
3.97
23.7%

Dec-13A
8,770
4,637
2,938
0.30
29%
14.14
0.17
3.97%
10.72
8.77
62.4%
3.07
24.5%

Dec-14F
7,406
3,322
3,066
0.32
4%
13.55
0.11
2.64%
12.64
NA
62.1%
2.68
21.1%
0%
0.93

Dec-15F
8,473
3,524
3,256
0.34
6%
12.76
0.14
3.22%
11.48
34.81
55.6%
2.39
19.8%
0%
0.94

Dec-16F
9,498
3,897
3,745
0.39
15%
11.10
0.17
3.86%
10.11
15.15
48.3%
2.12
20.3%
0%
0.97

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

HemarajThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
8,770
4,188
4,637
(353)
4,283
(332)
559
2,480
6,541
(1,400)
5,590
(504)

Dec-14F
7,406
3,636
3,322
(364)
2,958
(1,106)
1,350
220
3,736
0
3,423
(127)

Dec-15F
8,473
3,978
3,524
(375)
3,150
(1,128)
1,350
227
4,052
0
3,598
(122)

Dec-16F
9,498
4,457
3,897
(386)
3,511
(1,147)
1,500
233
4,657
0
4,097
(133)

5,086
(748)
0

3,296
(230)
0

3,476
(220)
0

3,965
(220)
0

(1,400)
2,938
2,938
2,938

3,066
3,066
3,066

3,256
3,256
3,256

3,745
3,745
3,745

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-14F
2,289

Dec-15F
1,643

Dec-16F
1,333

169
11,138
1,660
17,748
1,494
13,875
0
318
15,686
1,509

178
12,059
93
14,618
1,780
14,908
0
594
17,283
855

186
13,393
93
15,314
2,076
15,266
0
594
17,936
812

195
14,622
93
16,243
2,380
15,641
0
594
18,616
771

408
3,138
5,055
12,419

327
1,750
2,932
11,798

327
1,750
2,889
11,208

327
1,750
2,848
10,648

1,303
13,722
0
18,778
13,532
1,125
14,657

476
12,274
0
15,206
15,501
1,194
16,695

476
11,684
0
14,573
17,417
1,260
18,677

476
11,124
0
13,972
19,560
1,326
20,886

Dec-13A
37.0%
42.3%
47.8%
(0.94)
1.39
5.88
9.02%
44.6%
7.03
819
71.88
43.6%
15.2%

Dec-14F
(15.5%)
(13.2%)
49.1%
(1.07)
1.60
3.69
3.71%
35.8%
8.55
1,123
35.57
29.1%
11.3%

Dec-15F
14.4%
9.4%
46.9%
(1.07)
1.79
4.00
3.39%
39.1%
7.83
1,033
26.54
28.5%
12.0%

Dec-16F
12.1%
12.0%
46.9%
(1.04)
2.01
4.46
3.24%
39.1%
7.34
1,017
23.73
28.5%
12.9%

Dec-13A
3,500.0
N/A
N/A
N/A
41.0%
N/A
N/A
N/A
N/A
N/A
13.0%

Dec-14F
3,500.0
N/A
N/A
N/A
41.0%
N/A
N/A
N/A
N/A
N/A
13.0%

Dec-15F
3,500.0
N/A
N/A
N/A
41.0%
N/A
N/A
N/A
N/A
N/A
13.0%

Dec-16F
3,500.0
N/A
N/A
N/A
41.0%
N/A
N/A
N/A
N/A
N/A
13.0%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
4,637

Dec-14F
3,322

Dec-15F
3,524

Dec-16F
3,897

(990)

(89)

(9)

(9)

966
(652)
(504)
3,456
(601)
0

(2,094)
(886)
(127)
126
(1,251)
0

(1,335)
(902)
(122)
1,158
(948)
0

1,118
(914)
(133)
3,960
(690)
0

(2,679)
1,373
(1,906)
3,187
0
0
(1,651)

725
1,373
847
(1,276)
0
0
(1,097)

244
1,373
669
(633)
0
0
(1,340)

(1,300)
1,373
(617)
(601)
0
0
(1,602)

0
1,537

(1,092)
(3,465)

(500)
(2,472)

(1,450)
(3,653)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Dec-13A
4,780

Jan-11

Jan-12

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

SOURCE: CIMB, COMPANY REPORTS

123

Food & BeveragesThailand


December 12, 2014

Ichitan Group
ICHI TB / ICHI.BK

Market Cap

Avg Daily Turnover

Free Float

US$835.5m

US$4.89m

32.7%

THB27,430m

THB158.9m

1,000.0 m shares

Current

THB21.10

Target

THB26.70

Prev. Target

THB26.70

Up/Downside

26.5%
Conviction|

Bridging the future with Ichitan

CIMB Analyst(s)

ICHItan (ICHI) is the leader in the ready-to-drink (RTD) green tea market in
Thailand, thanks to its fast-growing sales. Now ICHI is ready for larger-scale
production, increase productivity and overseas expansion. We believe it will
achieve 22.2% revenue CAGR and 18.0% net profit CAGR in FY15-17.

Kitichan SIRISUKARCHA, CFP


T (66) 2 657 9232
E kitichan.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

Relative

-1.1

-13.4

Absolute

-2.3

-14.9

12M

Major shareholders

% held

Paskrontee Tan
Paskrontee Ing
Sukapantavorn Jaruvo

13.9
9.2
7.6

Show Style "View Doc Map"

We raise EPS by 2% in FY16 but lower


EPS by 17% in FY15 to reflect the
mixed results of developments over
the next two years. On the positive
side, revenue will be driven by: 1)
capacity expansion, 2) Bireley brand
relaunch, and 3) business expansion
in Indonesia. On the negative side,
there are key risks from: 1) possible
imposition of 20% excise tax on RTD
green tea in 2Q15 onwards, and 2)
initial losses from its operations in
Indonesia. We call Add with
THB26.70 target price based on 20.7x
CY16 P/E.

Raise FY15-16 revenue


estimates for bright outlook
ICHIs expansion plan for 2015-16
comprises three aspects: 1) 40%
increase in production capacity. It
aims to expand its customer base for
Ichitan ready-to-drink (RTD) green
tea and Yen Yen herbal drink, 2)
market expansion by relaunching
Bireley drinks brand in 1Q15, and 3)
overseas expansion, with operations
in Indonesia slated to begin in 2Q15.
As such, we raise our FY15-16 revenue
forecasts by 16-19%.

Factor in excise tax

(of 10-20%) on green tea drinks. As


the new tax is likely to take effect in
FY15, we have imputed the negative
impact of the 20% levy on ICHIs
costs in 2Q15 onwards. In order to
cope with the tax, ICHI has adjusted
its green tea formula to comply with
the requirements for tax exemption,
increased
Yen
Yen
sales
contribution (45% of total revenue in
9M14), and implemented strict cost
controls. Based on our estimates, the
higher tax expense will lower net
profit by 16.5% in FY15. However, net
profit is expected to improve in FY16,
driven by stronger sales and better
operations.

Bright future opportunities


ICHI is still our preferred stock due to
its outstanding growth as well as
additional upside from selling
Bireley products and we believe the
Indonesian market offers ample
opportunity for ICHI to boost both
sales and profit and is also a good
platform to expand into other
countries and AEC. We project more
visible growth in the next few years
after the company successfully builds
brand awareness and a new factory in
Indonesia.

The biggest risk to ICHIs earnings is


the possible imposition of excise tax

Vol m

Price Close

Financial Summary

Relative to SET (RHS)

31.0

228

26.0

193

21.0

158

16.0

123

11.0
500
400
300
200
100

88

Apr-14

Jun-14

Aug-14

Oct-14

Source: Bloomberg

52-week share price range


Current

Target

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
3,907
532
693
0.87
NA
25.63
0.00
0.00%
37.80
NA
220%
20.67
158%

Dec-13A
6,484
1,265
884
0.88
2.0%
25.12
0.00
0.00%
19.81
NA
145%
11.28
58%

Dec-14F
7,040
1,506
1,178
1.02
15.9%
21.67
0.45
2.04%
17.65
NA
17%
4.51
28%
0%
1.12

Dec-15F
9,844
1,610
1,158
0.89
(13.1%)
24.93
0.45
2.01%
18.23
26.18
7%
4.13
17%
0%
0.81

Dec-16F
12,174
2,106
1,677
1.29
44.9%
17.21
0.64
2.91%
13.44
17.44
(7%)
3.69
23%
0%
1.05

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Ichitan GroupThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
6,484
2,326
1,265
(267)
998
(162)
0
47
884

Dec-14F
7,040
2,597
1,506
(299)
1,207
(81)
0
52
1,178

Dec-15F
9,844
2,988
1,610
(431)
1,179
(71)
0
50
1,158

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
12,174
3,445
2,106
(418)
1,688
(63)
0
51
1,677

884
0

1,178
0

1,158
0

1,677
0

884
0

1,178
0

1,158
0

1,677
0

884
884
884

1,178
1,178
1,178

1,158
1,158
1,158

1,677
1,677
1,677

Cash Flow

Dec-14F
1,650
805
423
101
2,980
7,353
0
3
566
7,922
356
233
400
497
1,486
2,118

Dec-15F
1,987
1,073
653
103
3,816
7,122
0
3
500
7,624
356
233
617
418
1,624
1,884

Dec-16F
2,801
1,306
832
102
5,040
6,904
0
3
278
7,185
356
233
785
457
1,832
1,651

1,008
3,359
0
4,573
1,968

897
3,014
0
4,500
6,401

952
2,836
0
4,460
6,980

924
2,575
0
4,407
7,819

1,968

6,401

6,980

7,819

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
1,265

Dec-14F
1,506

Dec-15F
1,610

Dec-16F
2,106

(399)

143

(288)

(239)

50
(71)
0
1,301
(200)
2
0
0
(198)

51
(63)
0
1,856
(200)
(1)
0
0
(201)

247
(162)
0
951
(1,370)
7
0
(129)
(1,493)

52
(81)
0
1,621
(2,550)
(3)
0
0
(2,553)

3,900

589
589
48
(542)
(380)

(1,401)
2,499
1,566
(933)
(852)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

(589)

(579)

(176)
(765)
337
1,102
1,173

(262)
(841)
814
1,655
1,717

ASP (% chg, main prod./serv.)


Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
ASP (% chg, tertiary prod/serv)
Unit sales grth (%,tertiary prod/serv)
Util. rate (%, tertiary prod/serv)
Unit raw mat ASP (%chg,main)
Total Export Sales Growth (%)
Export Sales/total Sales (%)

25.0
20.0
15.0
10.0
5.0

Jan-12

Dec-14F
9%
19%
21.4%
(0.81)
4.92
14.89
0.0%
50.0%
38.90
31.29
28.28
20.7%
17.2%

Dec-15F
40%
7%
16.4%
(0.37)
5.37
16.60
0.0%
50.0%
30.74
28.66
27.05
14.1%
12.7%

Dec-16F
24%
31%
17.3%
0.43
6.01
26.95
0.0%
50.0%
32.51
31.13
29.39
20.1%
17.3%

Dec-13A
N/A
89.2%
80.0%
N/A
28.0%
80.0%
N/A
N/A
N/A
N/A
N/A
N/A

Dec-14F
N/A
46.3%
80.0%
N/A
6.3%
85.0%
N/A
N/A
N/A
N/A
N/A
N/A

Dec-15F
N/A
65.3%
85.0%
N/A
5.9%
90.0%
N/A
N/A
N/A
N/A
N/A
N/A

Dec-16F
N/A
20.0%
85.0%
N/A
5.6%
95.0%
N/A
N/A
N/A
N/A
N/A
N/A

Key Drivers

12-month Forward Rolling FD P/E (x)

Jan-11

Dec-13A
66%
138%
19.5%
(2.85)
1.97
6.17
0.0%
NA
35.85
34.78
32.83
23.6%
23.8%

30.0

0.0
Jan-10

Dec-13A
84
907
338
104
1,434
5,102
0
3
2
5,107
356
231
289
339
1,214
2,351

Jan-13

Jan-14

Ichitan Group

SOURCE: CIMB, COMPANY REPORTS

125

PetrochemicalThailand
December 12, 2014

Indorama Ventures
IVL TB / IVL.BK

Market Cap

Avg Daily Turnover

Free Float

US$3,182m

US$4.73m

35.0%

THB104,469m

THB153.8m

4,814 m shares

Current

THB21.70

Target

THB33.00

Prev. Target

THB33.00

Up/Downside

52.1%
Conviction|

A 2-step growth engine

CIMB Analyst(s)

While IVLs margins will only recover meaningfully in 2016, M&As


should help drive up EBITDA by 20% and volume by 25% next year.
Volume growth and margin expansion are the key share price drivers
from 2016 onwards, in our view.

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-2.4

-20.3

-22.9

Absolute

-3.6

-21.8

-8.8

Major shareholders

% held

Indorama Resources
Public

66.0
34.0

Show Style "View Doc Map"

We expect IVLs share price to rerate


from its bottom at current level driven
by M&A, volume growth, and margin
expansion in 2014-16. Its near-term
M&A growth will be funded by its
recent perpetual bond that should
help reduce its debt burden and
sustain its growth target in the next
upcycle. We maintain Add and our
target price of THB33, based on 11x
CY16 EV/EBITDA (o.5 s.d. below its
5-year historical average) to reflect its
slow PTA margin recovery.

Growth strategy remains on


track
IVLs earnings growth strategy is
driven 1) in the near-term (2015) by
volume growth of 6% yoy, lower JV
losses and M&As, leading to core
earnings growth of 95% yoy; and 2) in
the medium-term (2016-17) by
margin expansion for PTA and PET.

M&A growth in 2015


The key driver will be earnings growth
of 20% from four M&A deals that
should be completed by 1Q15 and will
add volume growth of 25%. These four
M&A deals worth US$1bn fuelled
investor concerns over funding issues

Vol m

Price Close

117.0

28.0

109.5

26.0

102.0

24.0

94.5

22.0

87.0

20.0

79.5

18.0
100
80
60
40
20

72.0

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

Upside underestimated
We believe the earnings upside from
the
M&A
deals
remain
underestimated by the market and
should be a key driver for its share
price over the next six months. The
concerns over funding for M&As are
overdone given IVLs recent success in
raising perpetual bonds worth
THB15bn to reduce its net debt to
equity to 0.8x, down from 1.3x.

Buy ahead of growth


Buy ahead of its solid earnings growth
momentum in 2015-17. The earnings
upside from M&As could offer
near-term surprises, while both
organic and inorganic expansion
plans will act as earnings growth
drivers post 2015. We believe
downside is limited backed by IVLs
replacement value of THB20/shr.

Financial Summary

Relative to SET (RHS)

30.0

Dec-13

and return on the acquired assets.


Potential re-rating catalysts should
emerge by 2Q15 when all four M&A
deals are completed and they are
likely to continue being the key
earnings growth driver post-2015.

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
210,729
11,466
2,740
(0.25)
(111%)
NA
0.36
1.66%
15.79
NA
127%
1.75
(2.0%)

Dec-13A
229,120
10,920
1,327
(0.32)
27%
NA
0.30
1.40%
17.09
12.5
132%
1.73
(2.6%)

Dec-14F
308,373
14,766
3,379
0.70
NA
30.91
0.19
0.87%
12.64
NA
132%
1.68
5.5%
0%
0.90

Dec-15F
316,667
17,398
6,606
1.37
95%
15.81
0.37
1.71%
10.40
36.9
112%
1.54
10.2%
0%
1.19

Dec-16F
349,029
17,448
8,964
1.86
36%
11.65
0.50
2.32%
10.24
252.7
98%
1.40
12.6%
0%
1.21

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Indorama VenturesThailand
December 12, 2014

Profit & Loss

Balance Sheet

(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
229,120
23,693
10,920
(6,351)
4,569
(3,658)
(1,108)
1,318
1,121
1,690
2,811
(1,294)

Dec-14F
308,373
28,643
14,766
(8,073)
6,693
(2,026)
(615)
200
4,252
0
4,252
(425)

Dec-15F
316,667
30,065
17,398
(8,482)
8,916
(1,826)
393
400
7,883
0
7,883
(788)

Dec-16F
349,029
31,409
17,448
(6,973)
10,474
(1,626)
436
1,200
10,485
0
10,485
(1,049)

1,518
(191)
0

3,827
(448)
0

7,095
(489)
0

9,437
(472)
0

1,327
(1,543)
(1,543)

3,379
3,379
3,379

6,606
6,606
6,606

8,964
8,964
8,964

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
4,114
28,827
28,940
6,542
68,423
96,213
0
11,246
13,160
120,619
19,997

Dec-14F
1,952
35,463
33,921
6,542
77,878
93,577
0
0
24,406
117,983
19,997

Dec-15F
3,770
36,417
34,833
6,542
81,561
92,412
0
0
24,406
116,818
19,997

Dec-16F
2,201
40,138
38,393
6,542
87,274
92,952
0
0
24,406
117,358
19,997

25,663
7,320
52,980
65,259

30,837
9,361
60,196
64,087

31,667
9,345
61,008
60,087

34,903
9,310
64,210
56,085

9,235
74,494
0
127,474
60,506
1,062
61,568

9,235
73,322
0
133,518
62,259
84
62,343

9,235
69,322
0
130,330
67,851
198
68,049

9,235
65,320
0
129,530
74,833
269
75,102

Dec-13A
8.7%
(4.8%)
4.77%
(16.85)
12.57
1.20
46.0%
NA
43.36
47.64
42.62
2.66%
3.29%

Dec-14F
34.6%
35.2%
4.79%
(17.06)
12.93
2.09
10.0%
27%
38.05
41.01
36.86
3.52%
5.37%

Dec-15F
2.7%
17.8%
5.49%
(15.85)
14.09
2.97
10.0%
27%
41.43
43.78
39.80
4.64%
6.85%

Dec-16F
10.2%
0.3%
5.00%
(15.35)
15.54
3.74
10.0%
27%
40.14
42.19
38.35
5.46%
7.79%

Dec-13A
105.0
7.1%
1.7
N/A
N/A

Dec-14F
105.0
0.0%
2.3
N/A
N/A

Dec-15F
105.0
0.0%
2.0
N/A
N/A

Dec-16F
105.0
0.0%
2.3
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
10,920
1,108
(2,467)

Dec-14F
14,766
615
(6,443)

Dec-15F
17,398
(393)
(1,037)

Dec-16F
17,448
(436)
(4,045)

1,905
3,870
(3,658)
(1,294)
10,384
(6,800)
0
0
83
(6,717)
4,662
0
0
(1,733)

(415)
0
(2,026)
(425)
6,072
(5,436)
0
0
0
(5,436)
(1,172)
0
0
(1,626)

793
0
(1,826)
(788)
14,148
(7,317)
0
0
0
(7,317)
(4,000)
0
0
(1,014)

1,637
0
(1,626)
(1,049)
11,929
(7,514)
0
0
0
(7,514)
(4,002)
0
0
(1,982)

(6,857)
(3,928)
(261)
8,329
7,478

0
(2,798)
(2,162)
(536)
3,840

0
(5,014)
1,817
2,831
9,836

0
(5,984)
(1,568)
413
7,220

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.00

45.00

Oil Price (US$/bbl)


Volume Growth (%)
Ratio Of Up To Downstream (x)
Operating Cash Cost (US$/bbl)
Ratio Of High To Low Margin (x)

40.00
35.00

30.00
25.00
20.00
15.00
10.00
5.00
0.00
Jan-10

Jan-11

Jan-12

Indorama Ventures

Jan-13

Jan-14

PTT Global Chemical

SOURCE: CIMB, COMPANY REPORTS

127

Telco - OthersTHAILAND
December 12, 2014

Intouch Holdings
INTUCH TB / INTU.BK

Market Cap

Avg Daily Turnover

Free Float

US$7,496m

US$21.22m

55.0%

THB246,093m

THB690.1m

3,206 m shares

Current

THB76.75

Target

THB86.00

Prev. Target

THB86.00

Up/Downside

12.1%
Conviction|

Unreasonably deep discount

CIMB Analyst(s)

Pisut NGAMVIJITVONG
T (66) 2 657 9226
E pisut.ng@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

5.6

13.1

-14.1

Absolute

4.4

11.6

0.0

Major shareholders

% held

Aspen Holding Ltd.


Cedar Holding Ltd.
Thai NVDR Co., Ltd.

41.6
3.4
23.1

Show Style "View Doc Map"

Intouchs share price is trading at a 24% discount to its market-based


NAV of THB95, deeper than the historical average of 15%. It offers a
7.8% FY15 dividend yield vs. 5.5% for AIS and is trading at 12.7x FY15
P/E vs. 18.3x for AIS. This attractive risk/reward pay-off affirms our
Add rating and our preference for Intouch over AIS.
Intouchs acquisition of a loss-making
digital terrestrial TV broadcaster
could help to strengthen the groups
convergence platform in light of AISs
mobile
broadband
and
fixed
broadband businesses. We maintain
our estimates, Add rating and target
price, based on a 15% holding
discount to NAV.

which has proven to be too expensive.


We also think that Intouch now has
the upper hand in acquiring or
partnering with the many DTTV
broadcasters. At the right price, we
will be positive on any form of
partnership or acquisition as this
should bring in synergies and
strengthen its convergence strategy.

Negative correlation with


junta plans

Spectrum auction delay

We note that Intouchs share price


performance negatively correlates
with the junta governments plans.
This time, the market is becoming
increasingly concerned about the
non-democratic governments digital
economy policy, which aims to
introduce a new regulatory structure
and centralise the telecom authority
within the government. This could
lead to delays in spectrum auctions,
the national satellite project, etc.

Shopping time
We are impressed by the companys
financial and professional discipline
in backing off from the competitive
bidding for the DTTV channel licence,

Price Close

101.2

72.0

91.4

67.0

81.7

62.0
80

72.0

60
Vol m

40
20
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range




Current

Target

Intouchs stock could face selling


pressure if the NBTC fails to proceed
with the plan to hold the spectrum
auction in Jul-Aug 15 for whatever
reason. When the spectrum auction
was delayed in 2010, Intouchs share
price fell by 8%.

National satellite project


Although this is not the first time the
military government has proposed
operating its own satellite for the sake
of national security, all attempts have
failed to take off due to 1) an
unjustifiable business case, and 2) the
junta governments truncated terms.
Thaicoms concession irregularity
issues may not be resolved easily as it
could be politicised.

Financial Summary

Relative to SET (RHS)

77.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Operating EBITDA Margin
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
12,255
11,940
97.4%
12,010
3.75
29.7%
20.49
6.12
7.97%
19.41
21.69
(15.3%)
84%

Dec-13A
13,891
13,517
97.3%
13,571
4.23
13.0%
18.13
4.23
5.52%
17.15
17.68
(14.7%)
95%

Dec-14F
15,919
15,535
97.6%
15,604
4.87
15.0%
15.77
4.85
6.32%
14.92
15.79
(14.9%)
109%
0%
1.03

Dec-15F
18,795
18,411
98.0%
18,487
5.77
18.5%
13.31
5.73
7.46%
12.58
13.32
(15.6%)
129%
0%
1.07

Dec-16F
19,732
19,348
98.1%
19,421
6.06
5.0%
12.67
6.01
7.83%
11.97
12.67
(16.4%)
134%
0.95

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Intouch HoldingsThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
13,891
13,891
13,517
(14)
13,502
(3)
0
71
13,571
0
13,571
0
0
13,571
0
0

Dec-14F
15,919
15,919
15,535
(13)
15,523
0
0
82
15,604
0
15,604
0
0
15,604
0
0

Dec-15F
18,795
18,795
18,411
(20)
18,391
0
0
97
18,487
0
18,487
0
0
18,487
0
0

Dec-16F
19,732
19,732
19,348
(29)
19,319
0
0
101
19,421
0
19,421
0
0
19,421
0
0

0
13,571
13,571
13,571

0
15,604
15,604
15,604

0
18,487
18,487
18,487

0
19,421
19,421
19,421

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
2,097
57
0
0
2,154
41
12,196
5
4
12,246
1

Dec-14F
2,130
57
0
0
2,187
57
12,196
5
4
12,262
1

Dec-15F
2,244
57
0
0
2,301
66
12,196
5
4
12,271
1

Dec-16F
2,384
57
0
0
2,441
67
12,196
5
4
12,272
1

100
0
100
1

100
0
100
1

100
0
100
1

100
0
100
1

52
53
0
153
14,246
0
14,246

52
53
0
153
14,296
0
14,296

52
53
0
153
14,419
0
14,419

52
53
0
153
14,560
0
14,560

Dec-13A
13.4%
13.2%
97.3%
0.65
4.44
5,277
0%
100%
0.41
N/A
N/A
(30566%)
95%

Dec-14F
14.6%
14.9%
97.6%
0.66
4.46
N/A
0%
100%
0.37
N/A
N/A
208358%
109%

Dec-15F
18.1%
18.5%
98.0%
0.70
4.50
N/A
0%
99%
0.32
N/A
N/A
76524%
128%

Dec-16F
5.0%
5.1%
98.1%
0.74
4.54
N/A
0%
99%
0.30
N/A
N/A
58382%
133%

Dec-13A
40.86
N/A
N/A
N/A
7.8
N/A
N/A
N/A

Dec-14F
42.61
N/A
N/A
N/A
7.3
N/A
N/A
N/A

Dec-15F
43.66
N/A
N/A
N/A
7.4
N/A
N/A
N/A

Dec-16F
43.86
N/A
N/A
N/A
7.4
N/A
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
13,517
(13,891)
13,969
(54)
57
0
(3)
0
13,595
(29)
1
(62)
411
322
(1)
0
0
(13,573)

Dec-14F
15,535
(15,919)
15,919
13
69
0
0
0
15,617
(29)
0
0
0
(29)
0
0
0
(15,554)

Dec-15F
18,411
(18,795)
18,795
20
76
0
0
0
18,508
(29)
0
0
0
(29)
0
0
0
(18,364)

Dec-16F
19,348
(19,732)
19,732
29
73
0
0
0
19,449
(29)
0
0
0
(29)
0
0
0
(19,280)

(0)
(13,574)
343
13,916
13,919

(0)
(15,554)
33
15,588
15,588

0
(18,364)
114
18,478
18,478

0
(19,280)
140
19,420
19,420

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


30.0

Group Mobile Subscribers (m)


Group Fixed Voice Subscribers (m)
Grp fixed brdband subscribers (m)
Group Pay TV Subs (m)
Group Mobile ARPU (US$/mth)
Grp fixed voice ARPU (US$/mth)
Grp fixed brdband ARPU (US$/mth)
Group Pay TV ARPU (US$/mth)

25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11

Advanced Info Service

Jan-12

Jan-13

Intouch Holdings

Jan-14
Total Access Communication

SOURCE: CIMB, COMPANY REPORTS

129

ConstructionThailand
December 12, 2014

Italian-Thai Development
ITD TB / ITD.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,254m

US$26.19m

64.0%

THB41,183m

THB854.6m

4,860 m shares

Current

THB7.80

Target

THB5.25

Prev. Target

THB5.25

Up/Downside

-32.7%
Conviction|

Musical chairs

CIMB Analyst(s)

A strong order backlog, the prospect of getting more public


infrastructure projects and tame building material prices suggest
bright prospects for ITD. But the real issue is its margins and earnings
visibility, both of which are poor.

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

32.3

39.6

52.6

Absolute

31.1

38.1

66.7

Major shareholders

% held

Karnasuta family

34.1

Show Style "View Doc Map"

The recent surge in ITDs share price


following a share placement to
individuals and local institutions is
not unexpected. But we do not want to
be left holding the bag. We do not
think that its current CY15 P/E of 53x
is justified. We, therefore, reiterate
our Reduce call with an unchanged
target price of THB5.25 (CY14 P/BV
of 1.9x, 5-year historical average).

2.6x net gearing after


placement
Even though ITD recently raised
THB2.1bn via a private placement of
419.4m shares at THB5.05 each, its
net gearing is still high at 2.6x (3.0x
before placement). Should ITD issue
the remaining approved shares of
591.3m to its shareholders at
THB5.05 each, it would raise about
THB3bn, bringing down its net
gearing to 2.2x, which is still high.
If it wants to reduce its net gearing to
1x, it needs to raise an additional
THB20bn. Therefore, more cash calls
cannot be ruled out.

Benign environment

six years of revenue, the highest


among the major contractors in
Thailand. This means that even if the
Thai government is slow in rolling out
new infrastructure projects, it should
not be a serious concern for ITD.
Building material prices have been
stable, with both steel and cement
price indices sliding 2% YTD. We do
not expect them to rise significantly
next year as the global economy still
looks soft in 2015.

Weak earnings visibility


Over the past five years or 20 quarters,
ITD reported losses half of the time
despite tame building material prices
and a strong order backlog. Therefore,
even though we believe that building
material prices will stay benign in
2015, it is not a guarantee that ITD
will generate decent profits.
The culprits were volatile margins and
various provisions. Though we do not
expect ITD to lose money over the
next few years, its ROE would be low
at around 5-6%, which do not justify
its 53x CY15 P/E or 2.7x CY15 P/BV.

ITD has a strong order backlog of


THB295bn, equivalent to more than

Price Close

Financial Summary

Relative to SET (RHS)

8.80

164

7.80

147

6.80

131

5.80

114

4.80

97

3.80

81

2.80
600

64

Vol m

400

200
Dec-13

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


7.80
8.15

3.30

5.25
Current

Target

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
44,467
4,376
134.3
0.07
NA
104.7
0.00%
14.08
NA
383%
3.80
3.75%

Dec-13A
41,453
3,987
907.3
0.16
116%
48.4
0.050
0.64%
16.53
NA
319%
3.28
7.24%

Dec-14F
45,184
4,121
616.8
0.12
(25%)
64.1
0.050
0.64%
17.05
NA
263%
2.94
4.82%
0%
0.96

Dec-15F
49,702
4,220
736.5
0.14
15%
55.9
0.050
0.64%
17.47
NA
274%
2.84
5.16%
0%
0.84

Dec-16F
57,157
4,450
963.1
0.18
31%
42.8
0.050
0.64%
17.05
NA
282%
2.71
6.49%
0%
0.89

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Italian-Thai DevelopmentThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
41,453
6,034
3,987
(1,978)
2,009
(2,009)
22
1,068
1,091
237
1,328
(336)

Dec-14F
45,184
6,169
4,121
(2,102)
2,019
(2,488)
0
1,354
884
0
884
(248)

Dec-15F
49,702
6,575
4,220
(2,102)
2,118
(2,635)
0
1,489
972
0
972
(194)

Dec-16F
57,157
7,246
4,450
(2,102)
2,348
(2,819)
0
1,712
1,241
0
1,241
(248)

992
(85)
0

637
(20)
0

778
(41)
0

993
(30)
0

907
730
730

617
617
617

737
737
737

963
963
963

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-14F
1,786
28,651
3,859
3,606
37,903
16,008
11,343
0
4,155
31,506
25,506

Dec-15F
2,064
30,665
4,052
3,787
40,568
16,808
12,355
0
4,258
33,421
27,730

Dec-16F
2,050
33,193
4,255
3,976
43,474
17,649
13,480
0
4,365
35,493
30,227

9,693
0
35,441
15,704

10,372
0
35,878
16,467

11,098
0
38,828
17,446

11,875
0
42,102
18,256

1,622
17,326
0
52,767
11,554
829
12,383

1,784
18,251
0
54,130
14,025
1,254
15,279

1,963
19,409
0
58,237
14,497
1,254
15,751

2,159
20,415
0
62,517
15,197
1,254
16,451

Dec-13A
(6.8%)
(8.9%)
9.62%
(8.13)
2.38
1.00
25.3%
21.7%
81.85
39.34
100.1
4.19%
3.95%

Dec-14F
9.0%
3.4%
9.12%
(7.61)
2.66
0.81
28.0%
27.5%
77.86
35.25
93.9
3.75%
3.63%

Dec-15F
10.0%
2.4%
8.49%
(8.17)
2.75
0.80
20.0%
25.5%
74.32
33.48
90.9
3.69%
3.59%

Dec-16F
15.0%
5.4%
7.79%
(8.79)
2.88
0.83
20.0%
19.6%
68.04
30.46
84.2
3.87%
3.73%

Dec-13A
315,799
41,453
144,000
N/A
N/A
N/A
N/A
N/A
N/A

Dec-14F
300,616
45,184
30,000
N/A
N/A
N/A
N/A
N/A
N/A

Dec-15F
300,914
49,702
50,000
N/A
N/A
N/A
N/A
N/A
N/A

Dec-16F
303,757
57,157
60,000
N/A
N/A
N/A
N/A
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
3,987

Dec-14F
4,121

Dec-15F
4,220

Dec-16F
4,450

(156)

203

(76)

75

0
(2,009)
(336)
1,716
(1,445)
0
(1,789)
(188)
(3,422)
(1,017)
2,000
0
(243)

0
(2,488)
(248)
1,230
(1,962)
0
(483)
(477)
(2,922)
(1,095)
2,118
0
(264)

0
(2,635)
(194)
1,593
(1,729)
0
(1,012)
(495)
(3,235)
1,414
0
0
(264)

0
(2,819)
(248)
1,307
(1,478)
0
(1,125)
(544)
(3,147)
1,328
0
0
(264)

621
1,362
(344)
(2,723)
303

778
1,536
(156)
(2,787)
796

770
1,920
278
(228)
993

762
1,826
(14)
(512)
979

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

(THBm)
Outstanding Orderbook
Order Book Depletion
Orderbook Replenishment
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)

45.0
40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Dec-13A
1,942
26,362
3,676
3,435
35,414
15,246
10,436
0
4,055
29,737
25,747

Jan-11

CH. Karnchang

Jan-12

Jan-13

Italian-Thai Development

Jan-14
Sino-Thai Eng & Construction

SOURCE: CIMB, COMPANY REPORTS

131

Telco - Fixed LineTHAILAND


December 12, 2014

Jasmine International
JAS TB / JAS.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,625m

US$26.24m

65.4%

THB53,355m

THB853.2m

7,137 m shares

Current

THB7.60

Target

THB9.50

Prev. Target

THB9.50

Up/Downside

24.9%
Conviction|

Dont miss it

CIMB Analyst(s)

Pisut NGAMVIJITVONG
T (66) 2 657 9226
E pisut.ng@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

1.2

6.3

-15.4

Absolute

0.0

4.8

-1.3

Major shareholders

% held

Mr. Pete Bodharamik


Quam Securities A/C client
Thai NVDR

23.4
6.7
2.6

Show Style "View Doc Map"

We are confident that Jasmines share price will rally massively in the
next three months on the back of 1) IFF listing progress, 2) more
aggressive capital management, and 3) the negligible impact of AISs
entry into the FBB market. We maintain our estimates, DCF-based
target price (10% WACC) and Add rating.
Given the IFFs THB30bn-65bn size,
the listing should add 11-38% to our
target price. We also expect Jasmine
to improve its disclosure policy and
corporate governance, using the deal
road show as an opportunity to
commit to the investment community.
If it can deliver on both counts, we
expect its share price to rally and its
foreign holding to rebound to 35-40%
vs. below 30% currently.

IFF listing is underway


After a years wait, the SEC has finally
approved the companys IFF listing
plan. We expect the IFF IPO to take
place in Dec 14 or 1Q15, depending on
market sentiment. We estimate the
listing,
given
the
IFFs
THB30bn-65bn size, to lead to
THB1-3 in net incremental DCF per
share after subtracting the IPO fee,
tax and its holding stake from the
proceeds from the asset spin-off.

Improving corporate
governance?
We believe market forces will work to
compel Jasmine to improve its
corporate governance, especially its
disclosure. This will be an important
milestone that should revive its

Price Close

94.3

6.70

77.1

5.70
1000
800
600
400
200

60.0

Vol m

111.4

7.70

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range




Current

Target

trustworthiness and help it gain more


traction among institutional investors.

Plenty of room for all FBB


operators to grow
Given a 25% FBB penetration rate, we
see room for the FBB market to grow,
especially in the provincial market
where the rate is below 15%. The
market was relieved after CTH
decided to back off from the FBB
business after reporting huge losses in
pay TV. Also, we are not worried
about AISs entry into the FBB market,
at least for the next 2-3 years, as it is
targeting only 0.3m FBB subscribers
in FY15. It is also focusing on the
high-value urban segment and
positioning its service as premium.

Low risk from the national


broadband project
We are not concerned about the
military governments plan to launch
a national broadband network as it
takes time to roll out a new FBB
network. Also, it will be difficult to
consolidate the networks of TOT, CAT,
EGAT, PEA and MEA. Besides, the
SOEs lack the capability to serve the
mass retail segment.

Financial Summary

Relative to SET (RHS)

8.70

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Operating EBITDA Margin
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
10,369
4,842
46.7%
2,137
0.29
106%
26.45
0.09
1.22%
12.00
97.46
21.2%
26.3%

Dec-13A
11,123
5,778
52.0%
3,003
0.42
45%
18.08
0.25
3.29%
9.71
21.84
3.2%
29.9%

Dec-14F
13,121
7,223
55.0%
3,482
0.53
26%
14.44
0.32
4.15%
7.45
15.07
(10.4%)
30.7%
0%
0.97

Dec-15F
14,856
8,487
57.1%
4,643
0.65
24%
11.68
0.39
5.14%
6.00
12.08
(26.3%)
32.5%
0%
1.09

Dec-16F
16,297
9,412
57.8%
5,255
0.74
13%
10.32
0.44
5.81%
5.09
9.35
(38.7%)
31.4%
0%
1.04

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Jasmine InternationalThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
11,123
8,548
5,778
(1,900)
3,878
(216)
0
35
3,697
(15)
3,682
(605)
0
3,077
(74)
0

Dec-14F
13,121
10,316
7,223
(2,443)
4,780
(280)
0
40
4,540
(274)
4,266
(784)
0
3,482
0
0

0
3,003
3,000
3,000

Dec-15F
14,856
11,834
8,487
(2,723)
5,764
(185)
0
38
5,617
0
5,617
(974)
0
4,643
0
0

0
3,482
3,756
3,756

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
16,297
13,139
9,412
(2,785)
6,626
(150)
0
36
6,512
0
6,512
(1,257)
0
5,255
0
0

0
4,643
4,643
4,643

0
5,255
5,255
5,255

Cash Flow

Dec-13A
3,857
3,765
40
598
8,260
12,904
145
106
319
13,474
1,905

Dec-14F
5,132
5,183
105
598
11,019
11,593
145
106
319
12,162
293

Dec-15F
7,197
5,592
126
598
13,513
10,869
145
106
319
11,439
212

Dec-16F
10,077
5,942
146
598
16,764
10,079
145
106
319
10,648
399

3,818
945
6,667
2,352

4,170
945
5,408
3,363

4,359
945
5,516
2,634

4,477
945
5,821
2,321

245
2,597
0
9,264
11,391
1,078
12,469

245
3,608
0
9,015
13,089
1,078
14,167

245
2,879
0
8,395
15,479
1,078
16,557

245
2,566
0
8,387
17,948
1,078
19,026

Dec-13A
7.3%
19.3%
52.0%
(0.06)
1.60
12.44
16.4%
59.1%
132.8
6.27
375.1
25.9%
25.7%

Dec-14F
18.0%
25.0%
55.0%
0.21
1.83
17.07
18.4%
60.0%
124.5
9.41
334.6
29.5%
27.7%

Dec-15F
13.2%
17.5%
57.1%
0.61
2.17
31.21
17.3%
60.0%
132.4
13.95
314.5
36.1%
31.0%

Dec-16F
9.7%
10.9%
57.8%
1.03
2.51
44.04
19.3%
60.0%
129.5
15.76
320.0
43.1%
32.2%

Dec-13A
N/A
N/A
1.42
N/A
N/A
N/A
19
N/A

Dec-14F
N/A
N/A
1.65
N/A
N/A
N/A
18
N/A

Dec-15F
N/A
N/A
1.82
N/A
N/A
N/A
18
N/A

Dec-16F
N/A
N/A
1.99
N/A
N/A
N/A
18
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-12A
4,842
45

Dec-13A
5,778

Dec-14F
7,223

Dec-15F
8,487

Dec-16F
9,412

(324)

(235)

(249)

171

630
(404)
(498)
4,616
(1,421)
30
(410)
6
(1,795)
(2,256)
0
(299)
(202)

595
(312)
(600)
5,633
(1,730)
7
67
90
(1,566)
(1,584)
(8)
0
(671)

306
(280)
(784)
6,141
(1,940)
0
0
0
(1,940)
(601)
14
0
(1,784)

209
(185)
(974)
7,303
(2,004)
0
0
0
(2,004)
(809)
13
0
(2,254)

174
(150)
(1,257)
7,929
(1,999)
0
0
0
(1,999)
(126)
12
0
(2,786)

(167)
(2,923)
(103)
565
3,225

(286)
(2,548)
1,519
2,483
4,379

(280)
(2,652)
1,549
3,600
4,481

(185)
(3,234)
2,065
4,490
5,484

(150)
(3,050)
2,881
5,805
6,081

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50

45

Group Mobile Subscribers (m)


Group Fixed Voice Subscribers (m)
Grp fixed brdband subscribers (m)
Group Pay TV Subs (m)
Group Mobile ARPU (US$/mth)
Grp fixed voice ARPU (US$/mth)
Grp fixed brdband ARPU (US$/mth)
Group Pay TV ARPU (US$/mth)

40
35

30
25
20
15
10
5
0
Jan-10

Jan-11
Jasmine International

Jan-12

Jan-13
Samart I-Mobile

Jan-14
Thaicom

SOURCE: CIMB, COMPANY REPORTS

133

RetailThailand
December 12, 2014

Jubilee Enterprise
JUBILE TB / JUBI.BK

Market Cap

Avg Daily Turnover

Free Float

US$191.1m

US$0.08m

47.6%

THB6,274m

THB2.71m

174.3 m shares

Current

THB36.00

Target

THB42.00

Prev. Target

THB42.00

Up/Downside

16.7%
Conviction|

Shining bright like a diamond

CIMB Analyst(s)

Kitichan SIRISUKARCHA, CFP


T (66) 2 657 9232
E kitichan.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-4.1

-3.1

35.9

Absolute

-5.3

-4.6

50.0

Major shareholders

% held

Mr.Viroj Pornprakit
Ms.Suvattana Tulayapisitchai
Mr.Montchai Leesirikul

41.5
7.0
4.0

Show Style "View Doc Map"

We are positive on JUBILEs business outlook in view of its leading


position in the diamond jewellery retail business and its ability to
maintain market share, thanks to its strong competitive advantages.
We expect SSSG of 13-15% per year, with its aggressive branch
expansion supporting its solid growth prospects.
We reiterate our Add call and DCFbased target price of THB42 (WACC
7.8%, LTG 3.15%). We project 36%
net profit CAGR over the next three
years, underpinned by aggressive
branch expansion (+23% p.a. to 200
outlets) and strong SSSG (>10% p.a.).
Trading at 20x FY15 P/E (vs. retail
sectors 26x) and high ROE of 35%,
JUBILE looks attractive. Its robust
growth outlook and likely strong 4Q
are potential re-rating catalysts.

Competitive advantage

JUBILE is the largest diamond


jewellery retailer in the country with
more than 114 branches nationwide.
This is miles ahead of the second
player, PRANDAs Prima Diamond,
which only has 39 branches. JUBILE's
vast network allows the company to
gain competitive advantages through:
1) strong bargaining power over
suppliers, 2) opportunities to select
better locations in department stores,
and 3) effective brand-building and
marketing strategies.

Price Close

173

40.0

157

35.0

141

30.0

125

25.0

109

20.0
800

93

600
Vol th

400
200
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range




Current

Target

Solid financials to boost


growth

We project revenue CAGR of 32% and


net profit CAGR of 36% over the next
three years. This growth rate is
expected to outpace the overall
market (5-7%) given that JUBILE will
increase its market share (thanks to
its annual SSSG of 15%) and it aims to
expand its network to 200 branches
by 2016 (+23%). Moreover, with its
successful brand-building strategy, we
believe that JUBILE will be able to
keep its existing customers while
attracting new customers. Our view is
confirmed by its ticket sales growth of
10%+ per year. Meanwhile, its strong
financials with zero-debt are sufficient
to fund its ambitious expansion plan.

Swift rebound

JUBILEs net profit had grown yoy


every quarter since the company was
listed on MAI on 9 Nov 2009, except
during times of crises in 4Q13 (flood
crisis) and 1Q14 (political turmoil). It
has also managed to rebound swiftly
after each crisis. Moreover, despite
3Q14 being a weak quarter for most
retailers, JUBILE still posted strong
SSSG of 10% yoy during the quarter
(vs. negative growth by its peers).

Financial Summary

Relative to SET (RHS)

45.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
1,226
218.9
166.2
0.96
26.3%
37.42
0.59
1.63%
27.85
97.17
(24.9%)
12.50
35.6%

Dec-13A
1,462
263.9
202.8
1.17
21.3%
30.85
0.45
1.24%
22.91
58.32
(33.8%)
10.02
36.0%

Dec-14F
1,798
296.1
223.2
1.28
9.8%
28.11
0.77
2.13%
20.92
80.29
(11.1%)
8.77
33.3%
0.99

Dec-15F
2,392
424.2
318.9
1.83
42.9%
19.67
1.10
3.05%
14.51
27.45
(13.9%)
7.44
40.9%
1.06

Dec-16F
3,263
571.9
436.6
2.51
36.9%
14.37
1.50
4.18%
10.85
29.48
(6.7%)
6.17
46.9%
1.00

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Jubilee EnterpriseThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
1,462
631
264
(13)
251
(1)
0
3
254

Dec-14F
1,798
746
296
(21)
275
0
0
4
279

Dec-15F
2,392
1,016
424
(30)
395
0
0
4
399

Dec-16F
3,263
1,387
572
(30)
542
0
0
4
546

254
(51)

279
(56)

399
(80)

546
(109)

203

223

319

437

203
203
203

223
223
223

319
319
319

437
437
437

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-14F
83
94
720
8
904
120
0
3
25
147
0
0
279
46
324
0
3
8
12
0
336
715

Dec-15F
121
118
867
10
1,116
127
0
3
25
154
0
0
364
47
412
0
3
12
15
0
427
843

Dec-16F
71
161
1,182
14
1,429
125
0
3
25
152
0
0
497
48
545
0
3
15
19
0
564
1,017

715

843

1,017

Dec-13A
19.2%
20.5%
18.0%
1.21
3.59
479.6
20.0%
38.5%
20.08
229.4
96.67
52.7%
44.3%

Dec-14F
22.9%
12.2%
16.5%
0.46
4.10
N/A
20.0%
60.0%
18.04
223.1
95.06
52.0%
40.8%

Dec-15F
33.0%
43.2%
17.7%
0.67
4.84
N/A
20.0%
60.0%
16.14
210.6
85.29
49.0%
50.4%

Dec-16F
36.4%
34.8%
17.5%
0.39
5.84
N/A
20.0%
60.0%
15.64
199.8
83.99
58.8%
58.0%

Dec-13A
N/A
N/A
108
17.1%
N/A
N/A
N/A
N/A

Dec-14F
N/A
N/A
130
15.0%
N/A
N/A
N/A
N/A

Dec-15F
N/A
N/A
165
14.0%
N/A
N/A
N/A
N/A

Dec-16F
N/A
N/A
200
14.0%
N/A
N/A
N/A
N/A

626

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
263.9

Dec-14F
296.1

Dec-15F
424.2

Dec-16F
571.9

(1.6)

(154.9)

(84.2)

(224.9)

(8.7)
(0.5)
(50.7)
202.4
(35.0)
(10.2)
(66.9)
17.0
(95.1)

4.0
0.0
(55.8)
89.4
(76.8)
(7.8)
75.0
(1.7)
(11.3)

4.0
0.0
(79.7)
264.2
(28.0)
(8.5)
0.0
0.9
(35.6)

4.0
0.0
(109.2)
241.8
(28.0)
(0.6)
0.0
(0.4)
(29.1)

0.5

0.0

0.0

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

0.0

(78.0)

(133.9)

(191.3)

(261.9)

(9.8)
(87.3)
20.0
107.3
107.8

(1.3)
(135.3)
(57.1)
78.1
78.1

0.7
(190.7)
37.9
228.6
228.6

(0.3)
(262.3)
(49.5)
212.8
212.8

Key Drivers

12-month Forward Rolling FD P/E (x)


25.0

ASP (% chg, main prod./serv.)


Unit sales grth (%, main prod./serv.)
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)

20.0

15.0
10.0
5.0
0.0
Jan-10

Dec-13A
215
84
565
6
871
56
0
3
25
83
0
0
269
47
317
0
3
8
12
0
328
626

Jan-11

Jan-12

Jan-13

Jan-14

Jubilee Enterprise

SOURCE: CIMB, COMPANY REPORTS

135

BanksThailand
December 12, 2014

Kasikornbank
KBANK TB / KBAN.BK

Market Cap

Avg Daily Turnover

Free Float

US$17,641m

US$31.19m

85.0%

THB579,169m

THB1,015m

2,393 m shares

Current

THB242.0

Target

THB274.0

Prev. Target

THB240.0

Up/Downside

13.2%
Conviction|

Beautiful as she is

CIMB Analyst(s)

KBANK reported strong earnings even in a tough economic


environment. We believe that it will be able to maintain its
performance in FY15 with its built-to-suit core banking services.
KBANK is one of our favorite Thai banks due to superior growth and
ROE compared to its peers.

Weerapat WONK-URAI
T (66) 2 657 9224
E weerapat.wo@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

4.2

4.0

31.7

Absolute

3.0

2.5

45.8

Major shareholders

% held

Lamsam family

4.0

Show Style "View Doc Map"

Upon transfer of coverage, we


upgrade our rating to Add from Hold,
and raise our GGM-based target price,
based on 2.27x FY15 P/BV, assuming
19% long-term ROE and 12.3% COE.
We expect KBANKs EPS growth to be
driven by robust loan growth and
non-interest income growth.

Resilient growth
Key investment theme for FY15 is a
play on cross-border trade and SME
customers who are involved in
government investment projects. Its
sizable SME portfolio of 38% will
propel its FY15 loan growth to 10%,
according to our estimate. The bank
will be less impacted by the stretched
household debt (vs. SCB), as retail
loans account for only 26% of
KBANKs portfolio. We expect
non-interest income growth of 17%
which will be boosted by its
cross-selling
efforts
and
hefty
insurance business income, driven by
the
successful
K-Transformation
project which will enhance its sales
force capabilities. We are not worried
about its future operating expenses as
the project is nearly complete.

Price Close

125.1

180

109.1

130
20

93.0

15
Vol m

10
5
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

Outlook
KBANK is expected to sustain
resilient growth in both lending and
non-lending businesses. Amid weak
domestic consumption, KBANK plans
to target banking demand in
Thailands border provinces such as
Udon Thani, Nakhon Phanom and
Tak. It has built up strong banking
networks in these markets which will
enable it to capture market share.
Also, the banks financial targets for
FY15 are not beyond achievable given
the
current
macroeconomic
conditions. KBANK manages its
net-interest margin well by not
sacrificing loan yields to create alpha
lending growth. It plans to keep its
credit cost at 100bp in FY15, and build
up an NPL buffer. As such, its
loan-loss-reserve ratio will inch up to
169.5%.

Deserves rich valuations


Our Add call is based on KBANKs
outstanding growth along with a
convincing risk-reward trade-off. In
terms of P/BV-to-ROE, KBANK is
now cheaper compared to SCB.

Financial Summary

Relative to SET (RHS)

230

Dec-13

Net Interest Income (THBm)


Total Non-Interest Income (THBm)
Operating Revenue (THBm)
Total Provision Charges (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
BVPS (THB)
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
63,581
40,724
104,305
(8,390)
35,260
14.73
45.5%
16.43
3.00
1.24%
77.3
3.13
20.8%

Dec-13A
72,797
48,153
120,950
(11,743)
41,325
17.27
17.2%
14.02
3.50
1.45%
91.6
2.64
20.4%

Dec-14F
78,210
55,422
133,632
(13,424)
46,286
19.34
12.0%
12.51
3.87
1.60%
104.8
2.31
19.7%
(3.37%)
1.00

Dec-15F
84,522
64,871
149,393
(16,503)
50,931
21.28
10.0%
11.37
4.26
1.76%
120.9
2.00
18.9%
(7.08%)
0.98

Dec-16F
91,638
74,315
165,952
(18,154)
56,272
23.51
10.5%
10.29
4.70
1.94%
138.6
1.75
18.1%
(8.95%)
0.94

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

KasikornbankThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Net Interest Income
Total Non-Interest Income
Operating Revenue
Total Non-Interest Expenses
Pre-provision Operating Profit
Total Provision Charges
Operating Profit After Provisions
Pretax Income/(Loss) from Assoc.
Operating EBIT (incl Associates)
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Consolidation Adjustments & Others
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX And Other Adj.
Net Profit
Recurring Net Profit

Dec-13A
72,797
48,153
120,950
(52,903)
68,047
(11,743)
56,303
0
56,303
0
56,303

Dec-14F
78,210
55,422
133,632
(57,729)
75,903
(13,424)
62,479
0
62,479
0
62,479

Dec-15F
84,522
64,871
149,393
(64,372)
85,020
(16,503)
68,517
0
68,517
0
68,517

Dec-16F
91,638
74,315
165,952
(72,362)
93,590
(18,154)
75,437
0
75,437
0
75,437

56,303
(11,457)

62,479
(12,496)

68,517
(13,703)

75,437
(15,087)

44,847
(3,522)
0
0
41,325
41,325

49,984
(3,698)
0
0
46,286
46,286

54,813
(3,883)
0
0
50,931
50,931

60,349
(4,077)
0
0
56,272
56,272

(THBm)
Total Gross Loans
Liquid Assets & Invst. (Current)
Other Int. Earning Assets
Total Gross Int. Earning Assets
Total Provisions/Loan Loss Reserve
Total Net Interest Earning Assets
Intangible Assets
Other Non-Interest Earning Assets
Total Non-Interest Earning Assets
Cash And Marketable Securities
Long-term Investments
Total Assets
Customer Interest-Bearing Liabilities
Bank Deposits
Interest Bearing Liabilities: Others
Total Interest-Bearing Liabilities
Bank's Liabilities Under Acceptances
Total Non-Interest Bearing Liabilities
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Balance Sheet Employment


Dec-13A
94.3%
94.9%
32.2%
34.3%
61.0%
82.3%
18.3%
65.9%
0.85%
0.54%
0.475%

Dec-14F
95.5%
94.9%
32.0%
34.1%
61.8%
83.5%
19.3%
66.8%
0.89%
0.57%
0.290%

Dec-15F
96.4%
95.9%
31.4%
33.4%
62.4%
84.8%
20.2%
67.5%
1.00%
0.64%
0.361%

Dec-16F
97.3%
96.9%
30.3%
32.1%
64.0%
87.6%
21.0%
69.2%
1.00%
0.66%
0.368%

Total Income Growth


Operating Profit Growth
Pretax Profit Growth
Net Interest To Total Income
Cost Of Funds
Return On Interest Earning Assets
Net Interest Spread
Net Interest Margin (Avg Deposits)
Net Interest Margin (Avg RWA)
Provisions to Pre Prov. Operating Profit
Interest Return On Average Assets
Effective Tax Rate
Net Dividend Payout Ratio

Dec-15F
1,973,658
542,264

Dec-16F
2,160,812
553,109

2,141,756
(45,099)
2,096,656
0
152,779
152,779
40,610
0
2,290,045
1,529,835
167,403
93,315
1,790,553
3,196
259,288
2,053,038
219,232
17,775
237,007

2,312,376
(51,643)
2,260,733
0
161,307
161,307
36,536
0
2,458,577
1,644,573
174,099
96,108
1,914,779
3,516
269,983
2,188,278
250,923
19,375
270,298

2,515,922
(58,886)
2,457,037
0
173,328
173,328
43,701
0
2,674,066
1,792,584
175,840
103,451
2,071,876
3,867
287,948
2,363,691
289,256
21,119
310,375

2,713,922
(66,852)
2,647,069
0
186,303
186,303
34,806
0
2,868,179
1,953,917
140,672
105,339
2,199,928
4,254
309,381
2,513,563
331,596
23,019
354,616

Dec-13A
16.0%
18.6%
14.9%
60.2%
1.93%
5.18%
3.25%
4.98%
5.07%
17.3%
3.33%
20.3%
15.9%

Dec-14F
10.5%
11.5%
11.0%
58.5%
1.88%
5.07%
3.20%
4.93%
4.97%
17.7%
3.29%
20.0%
15.7%

Dec-15F
11.8%
12.0%
9.7%
56.6%
1.91%
5.08%
3.17%
4.92%
4.90%
19.4%
3.29%
20.0%
15.8%

Dec-16F
11.1%
10.1%
10.1%
55.2%
1.96%
5.11%
3.15%
4.89%
4.83%
19.4%
3.31%
20.0%
15.8%

Dec-13A
8.5%
3.5%
18.2%
43.7%
2.2%
140.8%
0.0%
12.0%
15.2%
10.0%
91.3%
2.2%
20.3%

Dec-14F
8.9%
3.5%
15.1%
43.2%
2.0%
163.5%
0.0%
12.8%
16.1%
7.5%
92.3%
2.0%
12.5%

Dec-15F
10.1%
3.5%
17.0%
43.1%
2.0%
169.5%
0.0%
13.5%
16.8%
9.0%
93.1%
2.0%
17.6%

Dec-16F
10.0%
3.5%
14.6%
43.6%
2.0%
174.9%
0.0%
14.1%
17.4%
9.0%
93.9%
2.0%
13.6%

Key Drivers

12-month Forward Rolling FD P/E (x)


14.00

Loan Growth (%)


Net Interest Margin (%)
Non Interest Income Growth (%)
Cost-income Ratio (%)
Net NPL Ratio (%)
Loan Loss Reserve (%)
GP Ratio (%)
Tier 1 Ratio (%)
Total CAR (%)
Deposit Growth (%)
Loan-deposit Ratio (%)
Gross NPL Ratio (%)
Fee Income Growth (%)

12.00

10.00
8.00
6.00
4.00
2.00

Jan-11

Dec-14F
1,793,463
518,913

Key Ratios

Gross Loans/Cust Deposits


Avg Loans/Avg Deposits
Avg Liquid Assets/Avg Assets
Avg Liquid Assets/Avg IEAs
Net Cust Loans/Assets
Net Cust Loans/Broad Deposits
Equity & Provns/Gross Cust Loans
Asset Risk Weighting
Provision Charge/Avg Cust Loans
Provision Charge/Avg Assets
Total Write Offs/Average Assets

0.00
Jan-10

Dec-13A
1,645,188
496,567

Jan-12

Jan-13

Jan-14

Bangkok Bank

Kasikornbank

Krung Thai Bank

Siam Commercial Bank

SOURCE: CIMB, COMPANY REPORTS

137

Technology ComponentsThailand
December 12, 2014

KCE Electronics
KCE TB / KCE.BK

Market Cap

Avg Daily Turnover

Free Float

US$666.4m

US$1.80m

56.6%

THB21,878m

THB58.62m

549.0 m shares

Current

THB38.75

Target

THB49.00

Prev. Target

THB45.00

Up/Downside

26.5%
Conviction|

Promising future

CIMB Analyst(s)

We expect KCE to post 23.5% EPS CAGR during FY14-16 given 1) solid
demand growth in automotive PCB products, and 2) market share
gains via competitive pricing and the sale of prepreg and copper clad
laminate outside the KCE group.

Thanakorn CHONGSUKSIRICHOK
T (66) 2 657 9227
E thanakorn.ch@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-4.3

-4.0

74.0

Absolute

-5.5

-5.5

Major shareholders

88.1
% held

Ongkosit Family
HSBC (Singapore) Nominees PTE Ltd.
Mr. Panja Senadisai

33.8
6.5
4.7

Show Style "View Doc Map"

Its new factory, featuring advanced


production processes that can
improve its gross profit margin in the
long term, will begin operations in
1Q15. KCE remains our top pick in
the Thailand technology component
sector given its strong growth and
cheap valuations compared to its
local peers. We maintain our Add
call and roll our target price to
THB49, based on 11x FY16 P/E (1 s.d.
above the industry mean).

Solid revenue outlook


KCEs production is currently
running at 100% utilisation. In spite
of this, we assume KCEs new factory
will deliver 16% revenue CAGR
during FY14-16, driven by 1) strong
demand for automotive PCB, 2)
ramp-up of orders from existing
customers, and 3) market share
gains given competitive pricing and
high quality standards.

New technology
KCEs new factory in Lad Krabang
will commence operations in 1Q15
and we assume total capacity will

Price Close

209

43.0

189

38.0

169

33.0

149

28.0

129

23.0

109

18.0
15

89

Vol m

10
5
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

rise 22.4% in FY15, 18.3% in FY16


and 10.3% in FY17 from the current
capacity of 2.34m sq ft per month.
The plant is equipped with new
machines that could reduce the cost
of PCB production in the long term.
We are positive about the potential
for improvement, judging by the
widening in profit and operating
margins
when
management
renovated the KCE Technology
factory and significantly enhanced
the production process post the
floods.

Expect to gain more market


share
KCE currently has about 6% of the
automotive PCB market. It plans to
expand its slice of the pie via 1)
competitive pricing, and 2) providing
customers a choice other than China.

Top pick in the sector


We maintain our Add rating given
that it is the cheapest stock, based on
P/E valuation, among peers but
which offers solid earnings growth.

Financial Summary

Relative to SET (RHS)

48.0

Dec-13

Revenue (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
Price To Sales (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
6,478
643
1.38
378%
28.79
2.90
0.55
1.38%
36.22
23.82
166%
6.12
23.3%

Dec-13A
9,294
1,173
2.49
80%
15.98
2.04
0.75
1.89%
13.87
NA
108%
4.67
33.1%

Dec-14F
11,036
1,780
3.43
38%
11.59
1.87
0.85
2.14%
10.73
17.02
77%
3.77
35.7%
0%
1.10

Dec-15F
13,051
2,090
3.75
9%
10.61
1.70
1.00
2.52%
9.36
53.09
52%
3.00
31.5%
0%
1.03

Dec-16F
14,477
2,587
4.64
24%
8.57
1.53
1.10
2.77%
7.47
15.85
29%
2.36
30.8%
0%
1.08

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

KCE ElectronicsThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
9,294
2,956
1,681
(529)
1,152
(171)
13
203
1,210

Dec-14F
11,036
4,039
2,351
(563)
1,788
(176)
0
200
1,812

Dec-15F
13,051
4,651
2,785
(671)
2,114
(185)
0
196
2,125

Dec-16F
14,477
5,247
3,336
(759)
2,577
(165)
0
217
2,629

1,198
(16)

1,812
(24)

2,125
(28)

2,629
(34)

1,181
(8)

1,788
(8)

2,098
(8)

2,595
(8)

0
1,173
1,185
1,185

0
1,780
1,780
1,780

0
2,090
2,090
2,090

0
2,587
2,587
2,587

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
402
3,216
1,345
502
5,466
5,343
99
276
98
5,816
3,220
849
2,173
4
6,246
779
80
859
39
7,144
4,091
20
4,110

Dec-14F
1,181
3,449
1,428
64
6,122
6,696
0
0
98
6,795
3,016
793
1,170
4
4,982
1,939

Dec-15F
1,107
4,079
1,714
64
6,963
6,689
0
0
98
6,787
3,118
976
1,270
4
5,368
870

Dec-16F
1,928
4,524
1,887
64
8,403
7,200
0
0
98
7,299
3,067
1,042
1,535
4
5,648
515

84
2,023
0
7,005
5,886
28
5,914

92
962
0
6,330
7,387
36
7,423

101
617
0
6,265
9,395
44
9,439

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-12A
658
3
1,257
0
466
(805)
159
(90)
1,648
(950)

Dec-13A
1,681
(13)
(1,156)
0
1,186
278
171
(16)
2,131
(1,622)

Dec-14F
2,351
0
(387)
0
925
(523)
176
(24)
2,518
(2,300)

Dec-15F
2,785
0
(814)
0
715
(640)
185
(28)
2,202
(1,000)

Dec-16F
3,336
0
(354)
0
806
(681)
165
(34)
3,238
(1,500)

(202)
(1,152)
292
(8)

6
(1,616)
(679)
87

99
(2,201)
896
0

0
(1,000)
(785)
0

0
(1,500)
(339)
0

(142)

(278)

(434)

(492)

(578)

(777)
(634)
(138)
788
337

361
(509)
5
(165)
344

0
(1,276)
(74)
418
1,018

0
(918)
821
1,399
1,573

0
463
779
1,213
141

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Dec-13A
43.5%
155%
18.1%
(9.25)
8.51
6.82
1.4%
23.4%
102.4
74.44
67.17
14.0%
13.2%

Dec-14F
18.7%
40%
21.3%
(8.19)
10.55
10.17
1.3%
24.4%
110.2
72.34
62.88
20.5%
17.3%

Dec-15F
18.3%
18%
21.3%
(6.91)
13.24
11.45
1.3%
23.5%
105.3
68.26
53.01
19.8%
17.6%

Dec-16F
10.9%
20%
23.0%
(4.83)
16.84
15.59
1.3%
22.4%
108.7
71.39
55.63
22.4%
19.5%

Dec-13A
8.2%
33.9%
N/A
N/A
N/A
N/A
N/A
N/A

Dec-14F
4.7%
6.3%
N/A
N/A
N/A
N/A
N/A
N/A

Dec-15F
0.0%
18.6%
N/A
N/A
N/A
N/A
N/A
N/A

Dec-16F
0.0%
10.9%
N/A
N/A
N/A
N/A
N/A
N/A

Key Drivers

12-month Forward Rolling FD P/E (x)


30.0

ASP Change (%, Main Product)


Unit sales growth (%, main prod)
No. Of Lines (main Product)
Rev per line (US$, main prod)
ASP chg (%, 2ndary prod)
Unit sales grth (%, 2ndary prod)
No. Of Lines (secondary Product)
Rev per line (US$, 2ndary prod)

25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11

Delta Electronics (Thailand)

Jan-12

Jan-13

KCE Electronics

Jan-14
SVI Public Company Limited

SOURCE: CIMB, COMPANY REPORTS

139

BanksThailand
December 12, 2014

Krung Thai Bank


KTB TB / KTB.BK

Market Cap

Avg Daily Turnover

Free Float

US$9,791m

US$24.11m

40.0%

THB321,449m

THB809.8m

13,982 m shares

Current

THB23.00

Target

THB28.00

Prev. Target

THB30.00

Up/Downside

21.7%
Conviction|

Transformation in progress

CIMB Analyst(s)

Weerapat WONK-URAI
T (66) 2 657 9224
E weerapat.wo@cimb.com

Share price info


Share price perf. (%)

1M

3M

Relative

2.8

0.0

11.5

Absolute

0.0

-3.4

23.0

Major shareholders

12M

% held

FIDF
Vayupak Fund I

55.0
3.7

Show Style "View Doc Map"

We expect KTB to deliver resilient earnings on the back of its


transformation programme, which will enable it become a full-service
financial institution vs. a traditional state-owned bank now. Its
stronger balance sheet should gradually close the valuation gap with
its larger peers.
Upon transfer of coverage, we expect
that its FY15-16 core earnings growth
will be driven by stronger-than-peers
credit growth and non-interest
income growth. Our GGM-based
target price is based on 1.57x FY15
P/BV, assuming 16% long-term ROE
and 12.4% COE. We maintain our Add
rating.

Change for a better future


We believe that KTBs management is
capable of upscaling the banks
operational improvement in SME and
retail banking segments. However, it
may take 2-3 years to see the full
benefits of the transformation
programme. KTB has the capability to
push up its cross-selling efforts and
non-interest income streams. We
expect the banks non-interest income
to resume growth in FY15 after the
closure of Vayupak fund in FY13.
Furthermore, KTB is keen to raise its
lending business exposure to the
private sector and high-yield retail
customers rather than lending large
amounts to state-owned enterprises
with low yields. KTB is more active in
the retail segment and encourages

Price Close

120.0

24.0

115.0

22.0

110.0

20.0

105.0

18.0

100.0

16.0

95.0

14.0
200

90.0

150
Vol m

100
50
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

new product
subsidiaries.

launches

by

its

Outlook
Over the last three years, KTBs
balance sheet has become stronger
with a healthier loan-loss-reserve
ratio of 124.8% in FY14. While the
management
has
guided
for
THB700m/month provisioning, it
always sets aside more-than-required
given its strong performance. Its NPL
is at a manageable level and should
not be worrisome to investors due to
the stringent credit approval criteria.
We forecast FY15 loan growth of 9%
on the back of accelerated government
investments. In our view, its
cost-to-income ratio will be retained
at 43% in FY15 as the transformation
programme does not demand huge
investments.

Stay invested
KTB is one of our favourite Thai banks
due to its compelling valuation and a
high dividend of 4.6%. We advise
investors to stay invested in the stock.

Financial Summary

Relative to SET (RHS)

26.0

Dec-13

Net Interest Income (THBm)


Total Non-Interest Income (THBm)
Operating Revenue (THBm)
Total Provision Charges (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
BVPS (THB)
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
58,122
23,774
81,896
(15,163)
23,366
2.02
33.1%
11.36
0.80
3.48%
15.36
1.50
14.9%

Dec-13A
63,870
30,466
94,336
(12,284)
33,928
2.62
29.5%
8.77
0.88
3.83%
14.75
1.56
17.4%

Dec-14F
69,180
29,032
98,212
(12,800)
34,167
2.44
(6.8%)
9.41
0.98
4.25%
16.22
1.42
15.8%
(0.45%)
1.03

Dec-15F
73,804
32,068
105,873
(13,500)
37,512
2.68
9.8%
8.57
1.07
4.67%
17.84
1.29
15.8%
(5.58%)
1.01

Dec-16F
79,748
35,429
115,178
(14,000)
42,108
3.01
12.3%
7.63
1.20
5.24%
19.66
1.17
16.1%
(7.47%)
1.00

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Krung Thai BankThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Net Interest Income
Total Non-Interest Income
Operating Revenue
Total Non-Interest Expenses
Pre-provision Operating Profit
Total Provision Charges
Operating Profit After Provisions
Pretax Income/(Loss) from Assoc.
Operating EBIT (incl Associates)
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Consolidation Adjustments & Others
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX And Other Adj.
Net Profit
Recurring Net Profit

Dec-13A
63,870
30,466
94,336
(40,302)
54,034
(12,284)
41,750
0
41,750
0
41,750
0
41,750
(7,822)

Dec-14F
69,180
29,032
98,212
(42,703)
55,509
(12,800)
42,709
0
42,709
0
42,709
0
42,709
(8,542)

Dec-15F
73,804
32,068
105,873
(45,483)
60,390
(13,500)
46,890
0
46,890
0
46,890
0
46,890
(9,378)

Dec-16F
79,748
35,429
115,178
(48,543)
66,635
(14,000)
52,635
0
52,635
0
52,635
0
52,635
(10,527)

33,928
0
0
0
33,928
33,928

34,167
0
0
0
34,167
34,167

37,512
0
0
0
37,512
37,512

42,108
0
0
0
42,108
42,108

(THBm)
Total Gross Loans
Liquid Assets & Invst. (Current)
Other Int. Earning Assets
Total Gross Int. Earning Assets
Total Provisions/Loan Loss Reserve
Total Net Interest Earning Assets
Intangible Assets
Other Non-Interest Earning Assets
Total Non-Interest Earning Assets
Cash And Marketable Securities
Long-term Investments
Total Assets
Customer Interest-Bearing Liabilities
Bank Deposits
Interest Bearing Liabilities: Others
Total Interest-Bearing Liabilities
Bank's Liabilities Under Acceptances
Total Non-Interest Bearing Liabilities
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Balance Sheet Employment


Dec-13A
91.1%
92%
29.3%
30.7%
65.8%
79.3%
15.6%
74.4%
0.76%
0.51%
0.239%

Dec-14F
92.9%
92%
28.3%
29.6%
67.2%
80.7%
16.1%
76.2%
0.72%
0.50%
0.224%

Dec-15F
93.7%
93%
27.2%
28.2%
68.4%
81.9%
16.3%
77.6%
0.70%
0.50%
0.223%

Dec-16F
94.6%
94%
26.1%
27.1%
69.8%
83.3%
16.3%
79.1%
0.67%
0.48%
0.215%

Total Income Growth


Operating Profit Growth
Pretax Profit Growth
Net Interest To Total Income
Cost Of Funds
Return On Interest Earning Assets
Net Interest Spread
Net Interest Margin (Avg Deposits)
Net Interest Margin (Avg RWA)
Provisions to Pre Prov. Operating Profit
Interest Return On Average Assets
Effective Tax Rate
Net Dividend Payout Ratio

Dec-15F
2,455,716
250,472

Dec-16F
2,679,332
255,481

2,394,403
(61,783)
2,332,621
0
130,833
130,833
50,690
0
2,514,143
1,883,795
200,989
138,696
2,223,479
3,122
81,452
2,308,054
206,089
0
206,089

2,530,871
(68,828)
2,462,044
0
133,431
133,431
33,770
0
2,629,245
1,977,984
213,049
140,140
2,331,172
3,200
68,148
2,402,521
226,724
0
226,724

2,706,187
(76,258)
2,629,929
0
137,584
137,584
47,841
0
2,815,355
2,136,223
215,179
141,599
2,493,001
3,280
69,705
2,565,986
249,369
0
249,369

2,934,813
(83,964)
2,850,849
0
140,799
140,799
46,674
0
3,038,323
2,328,483
217,331
143,074
2,688,888
3,362
71,299
2,763,549
274,774
0
274,774

Dec-13A
15.2%
16.1%
33.0%
67.7%
2.22%
4.87%
2.65%
3.60%
3.66%
22.7%
2.68%
18.7%
29.5%

Dec-14F
4.1%
2.7%
2.3%
70.4%
2.23%
4.87%
2.64%
3.58%
3.57%
23.1%
2.69%
20.0%
32.0%

Dec-15F
7.8%
8.8%
9.8%
69.7%
2.23%
4.88%
2.64%
3.59%
3.53%
22.4%
2.71%
20.0%
32.0%

Dec-16F
8.8%
10.3%
12.3%
69.2%
2.22%
4.87%
2.65%
3.57%
3.48%
21.0%
2.72%
20.0%
32.0%

Dec-13A
11.7%
2.8%
28.1%
42.7%
3.2%
112.3%
0.0%
10.2%
14.8%
13.0%
87.8%
3.2%
14.9%

Dec-14F
7.1%
2.8%
-4.7%
43.5%
3.0%
124.8%
0.0%
10.5%
14.8%
5.0%
89.4%
3.0%
8.8%

Dec-15F
9.0%
2.8%
10.5%
43.0%
2.9%
131.2%
0.0%
10.6%
14.6%
8.0%
90.2%
2.9%
12.7%

Dec-16F
10.0%
2.8%
10.5%
42.1%
2.8%
136.0%
0.0%
10.6%
14.3%
9.0%
91.0%
2.8%
13.7%

Key Drivers

12-month Forward Rolling FD P/E (x)


14.00

Loan Growth (%)


Net Interest Margin (%)
Non Interest Income Growth (%)
Cost-income Ratio (%)
Net NPL Ratio (%)
Loan Loss Reserve (%)
GP Ratio (%)
Tier 1 Ratio (%)
Total CAR (%)
Deposit Growth (%)
Loan-deposit Ratio (%)
Gross NPL Ratio (%)
Fee Income Growth (%)

12.00

10.00
8.00
6.00
4.00
2.00

Jan-11

Dec-14F
2,285,311
245,560

Key Ratios

Gross Loans/Cust Deposits


Avg Loans/Avg Deposits
Avg Liquid Assets/Avg Assets
Avg Liquid Assets/Avg IEAs
Net Cust Loans/Assets
Net Cust Loans/Broad Deposits
Equity & Provns/Gross Cust Loans
Asset Risk Weighting
Provision Charge/Avg Cust Loans
Provision Charge/Avg Assets
Total Write Offs/Average Assets

0.00
Jan-10

Dec-13A
2,163,830
230,573

Jan-12

Jan-13

Jan-14

Bangkok Bank

Kasikornbank

Krung Thai Bank

Siam Commercial Bank

SOURCE: CIMB, COMPANY REPORTS

141

Property DevelopmentThailand
December 12, 2014

Land And Houses


LH TB / LH.BK

Market Cap

Avg Daily Turnover

Free Float

US$3,179m

US$4.91m

54.0%

THB104,363m

THB159.9m

10,026 m shares

Current

THB9.50

Target

THB10.24

Prev. Target

THB11.32

Up/Downside

7.8%
Conviction|

Little house room for re-rating

CIMB Analyst(s)

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-3.8

-9.7

-14.1

Absolute

-5.0

-11.2

0.0

Major shareholders

% held

Asavabhokhin family
Thai NVDR
GIC

23.8
19.1
13.7

Show Style "View Doc Map"

We continue to rate LH a Hold given its limited earnings upside as its


4Q14 results are unlikely to be exciting. FY14-15 earnings growth could
be inferior to peers due to slower topline growth and limited upside for
margins. We trim our target price as we roll it forward while cutting
the target P/E from 18x to 15x (1 s.d. above 5-year mean)
We keep our EPS estimates which do
not factor in any one-off gains from
asset sales or divestment of LHBANK.
We believe that the LHBANK news
has been well communicated to the
market and is, hence, in the price.

No exceptional gains in FY14


but possible in FY15
Special gains from asset sales to a
REIT are unlikely this year but will be
pushed to 1Q15. The REIT, which will
focus on assets from a retail shopping
complex, is likely to be set up in 1Q15,
at the earliest. Net gains from asset
sales are estimated at THB1bn-1.2bn
but this is well known by the market,
in our view, as the news has been
around for a few years.

Tame outlook for FY14-15


Compared with its peers average
prospective EPS growth of 16% to 22%
in FY14-15, LHs growth is likely to be
far less exciting, at 6-11%. Its FY16

Price Close

112.0

10.00

102.0

9.00

92.0

8.00
150

82.0

Vol m

100
50
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

outlook is even duller, with earnings


likely to grow 8-9% vs. the peer
average of more than 18%. Even
though SDH products have helped
LHs blended gross margin improve
significantly to 36-37% in past year,
we see limited upside. For LHs
earnings
to
expand
more
meaningfully, its condo gross margins
of 28% need to grow faster to at least
the peer average of 30-32%.

Rich valuations
Although it is a proxy for the property
sector given its large market
capitalisation, LHs valuations are
quite demanding, at 14-15x CY15-16
P/E. We believe its growth prospects
are not compelling enough to justify
its hefty premium over peers, which
are trading at 9-10x average P/E for
FY15-16.

Financial Summary

Relative to SET (RHS)

11.00

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
24,103
4,793
5,636
0.56
0.5%
16.90
0.44
4.62%
12.30
25.56
62.3%
3.09
18.7%

Dec-13A
25,075
5,650
6,478
0.65
15.0%
14.70
0.52
5.44%
11.68
23.37
72.8%
2.84
20.1%

Dec-14F
27,426
6,174
6,870
0.69
6.0%
15.25
0.52
5.42%
10.59
NA
64.5%
2.62
19.7%
0%
1.09

Dec-15F
30,145
6,984
7,568
0.75
10.2%
15.10
0.56
5.87%
9.52
60.85
54.8%
2.52
20.4%
0%
1.11

Dec-16F
33,160
7,682
8,217
0.82
8.6%
13.91
0.62
6.48%
8.62
31.37
51.2%
2.41
21.3%
0%
1.05

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Land And HousesThailand


December 12, 2014

Profit & Loss

Balance Sheet

(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
25,075
9,085
5,650
(509)
5,140
(61)
2,109
501
11,125
0
7,689
(1,102)
0
6,588
(109)
0

Dec-14F
27,426
9,871
6,174
(89)
6,084
(583)
2,214
580
11,992
0
8,295
(1,493)
0
6,802
68
0

6,478
6,478
6,478

6,870
6,870
6,870

Dec-15F
30,145
10,988
6,984
(98)
6,885
(573)
2,325
735
13,376
0
9,372
(1,874)
0
7,498
70
0

7,568
7,568
7,568

Dec-16F
33,160
12,087
7,682
(108)
7,574
(603)
2,441
771
14,588
0
10,183
(2,037)
0
8,147
70
0

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

8,217
8,217
8,217

Cash Flow

Dec-14F
3,588

Dec-15F
3,520

Dec-16F
3,700

136
38,496
1,407
41,205
616
22,387
0
11,161
34,164
422

140
46,497
1,280
51,505
678
26,172
0
773
27,622
4,000

145
47,628
1,242
52,534
746
23,400
0
986
25,132
800

149
48,232
1,204
53,285
820
23,400
0
1,002
25,223
800

2,806
10,429
13,656
26,104

2,600
10,249
16,849
23,849

2,450
10,179
13,429
24,205

2,200
9,898
12,898
23,839

766
26,870
0
40,526
33,573
1,270
34,843

789
24,638
0
41,487
36,307
1,334
37,640

812
25,017
0
38,446
37,820
1,400
39,221

837
24,675
0
37,574
39,463
1,470
40,934

Dec-13A
4.0%
9.3%
36.2%
(2.53)
3.35
15.05
14.3%
47.0%
1.87
810.7
56.52
19.4%
15.0%

Dec-14F
9.4%
8.6%
36.0%
(2.42)
3.62
14.54
18.0%
44.0%
1.84
883.6
56.20
20.3%
15.4%

Dec-15F
9.9%
11.3%
36.4%
(2.14)
3.77
16.23
20.0%
43.5%
1.72
896.7
48.11
23.9%
16.8%

Dec-16F
10.0%
10.0%
36.4%
(2.09)
3.94
16.84
20.0%
44.0%
1.62
832.5
40.38
25.1%
18.5%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
5,650

Dec-14F
6,174

Dec-15F
6,984

Dec-16F
7,682

(5,315)

(8,211)

(1,285)

(859)

(331)
0
(1,102)
(1,098)
(161)
0

1,133
0
(1,597)
(2,501)
(151)
0

629
0
(1,729)
4,599
(166)
0

(791)
0
(1,910)
4,122
(183)
0

0
560
399
4,775
0
0
(5,183)

0
561
410
1,842
4,000
0
(5,166)

0
561
395
(3,115)
2,000
0
(5,588)

0
561
378
(857)
1,000
0
(6,169)

1,770
2,447

1,770
(4,933)

1,770
(4,255)

242
(165)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
|

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Dec-13A
1,166

Jan-11

Jan-12

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


3,956.0 7,389.0 7,486.0 3,668.0 3,668.0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
34.0%
35.8%
36.0%
36.5%
36.5%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
11.0%
10.2%
10.0%
9.8%
9.8%

SOURCE: CIMB, COMPANY REPORTS

143

Property DevelopmentThailand
December 12, 2014

LPN Development
LPN TB / LPN.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,119m

US$3.81m

46.0%

THB36,745m

THB123.9m

1,476 m shares

Current

THB24.90

Target

THB29.78

Prev. Target

THB29.78

Up/Downside

19.6%
Conviction|

Solid outlook

CIMB Analyst(s)

We maintain our Add call on LPN, given the promising share price and
earnings upside. We retain our target price of THB29.8 based on 12.5x
CY16 P/E (1 s.d. above 5-year mean). Potential near-term catalysts are
recovery in 4Q14 presales and earnings

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

4.5

16.8

25.8

Absolute

3.3

15.3

39.9

Major shareholders

% held

Thai NVDR
Chase Nominees
HSBC (Singapore) Nominees

22.0
4.2
3.4

Show Style "View Doc Map"

We keep our EPS estimates


unchanged. Given our FY15 revenue
lock-in rate estimate of 96% thanks to
its solid backlog, higher margin and
intact gearing, LPN is still a
high-quality long-term investment,
with decent returns (including yields).

Earnings rebound in FY15


We project FY14s EPS will decline
10%, before recovering in FY15
(expected 44% EPS growth), thanks to
highly-secured revenue backed by a
solid backlog (96% locked in), and
higher gross margin. As our FY15-16
revenue assumptions are lower than
LPNs guidance, earnings upside
potential cannot be ruled out. Net
margin is expected to rise from 15% in
FY14 to 18% in FY15-16.

Still upbeat targets


LPN has retained its FY14 presales
target of THB20bn despite the 71%
lock-in rate in 9M14, which means
that another THB5.8bn is needed to
meet its FY14 target. LPN plans to
launch four new condo projects (two
in Cha-am) and relaunch LPN
Township Rangsit-Klong 1, which
have a combined value of THB8bn. Its
finished inventory available for sale
amounted to THB5.8bn at end-3Q14.
Price Close

113.7

18.0

95.9

13.0
40

78.0

30
Vol m

20
10
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

LPN kept its FY14 condo sales target


at THB13.6bn, of which 9M14 formed
57%. The balance should come from
its 4Q14 backlog of THB3.5bn and the
aforementioned finished inventory
available for sale. Total backlog was
THB21.3bn at end-3Q14 (THB3.5bn
for
4Q14
revenue
recognition,
THB16bn for FY15 and THB1.9bn for
FY16). Despite the slow transfers in
9M14, net gearing was well contained
at 0.6x. LPN has guided for FY15
presales of THB22bn and revenue of
THB18bn, as well as revenue of
THB20bn in FY16 and THB22bn in
FY17.

Quality investment returns


Stay invested in LPN for its secure
EPS growth of 44% in FY15 and 17%
in FY16. Although LPNs 12x CY15 P/E
and 10x CY16 P/E valuations appear
demanding and are at a premium to
peer averages of 10x CY15 P/E and 9x
CY16 P/E, we believe that LPNs
premium is justified, given its healthy
balance sheet, efficiency-driven, high
ROE of above 20%, and decent yields
of 4-5%.

Financial Summary

Relative to SET (RHS)

23.0

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
13,435
2,810
2,229
1.51
16.3%
16.48
0.76
3.03%
8.68
18.85
19.6%
4.33
28.6%

Dec-13A
14,436
2,955
2,329
1.58
4.5%
15.78
0.84
3.36%
8.54
32.32
42.4%
3.82
25.7%

Dec-14F
13,998
2,622
2,088
1.41
(10.3%)
17.60
0.71
2.84%
9.17
93.22
38.3%
3.51
20.8%
0%
0.95

Dec-15F
17,307
3,883
2,815
2.04
44.0%
12.22
1.05
4.21%
6.92
24.44
26.0%
2.93
26.1%
0%
0.88

Dec-16F
19,024
4,421
3,516
2.38
17.0%
10.45
1.19
4.78%
6.18
26.25
19.7%
2.53
26.0%
0%
1.00

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

LPN DevelopmentThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
14,436
4,779
2,955
(43)
2,912
(12)
0
54
4,779
0
2,954
(625)

Dec-14F
13,998
4,446
2,622
(42)
2,580
(17)
0
47
4,434
0
2,610
(522)

Dec-15F
17,307
5,777
3,883
(52)
3,832
(294)
0
50
5,481
0
3,587
(773)

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
19,024
6,406
4,421
(33)
4,388
(45)
0
52
6,380
0
4,395
(879)

2,329
(0)
0

2,088
0
0

2,815
0
0

3,516
0
0

2,329
2,329
2,329

2,088
2,088
2,088

2,815
3,006
3,006

3,516
3,516
3,516

Cash Flow

Dec-14F
864

Dec-15F
1,203

Dec-16F
1,209

130
14,703
0
16,025
1,203
0
0
193
1,396
5,148

134
15,466
0
16,464
1,254
0
0
280
1,534
4,679

138
16,819
0
18,160
1,309
0
0
280
1,589
4,255

142
18,471
0
19,822
1,365
0
0
280
1,645
3,870

2,101
231
7,480
126

2,206
242
7,127
200

2,316
254
6,825
200

2,432
267
6,569
200

189
315
0
7,794
9,626
0
9,626

193
393
0
7,520
10,479
0
10,479

197
397
0
7,222
12,526
0
12,526

201
401
0
6,970
14,497
0
14,497

Dec-13A
7.7%
8.0%
33.3%
(2.77)
6.52
408.4
21.2%
52.6%
4.48
483.9
79.27
36.8%
36.1%

Dec-14F
(2.8%)
(7.0%)
31.9%
(2.72)
7.10
252.0
20.0%
54.3%
3.46
576.4
82.29
25.4%
29.1%

Dec-15F
23.8%
29.9%
33.5%
(2.20)
8.49
323.6
21.5%
56.9%
2.88
511.0
71.58
31.2%
35.4%

Dec-16F
9.9%
10.9%
33.8%
(1.94)
9.82
306.1
20.0%
50.1%
2.70
511.8
68.87
31.9%
35.9%

Dec-13A
11,000.0
N/A
N/A
N/A
32.7%
N/A
N/A
N/A
N/A
N/A
12.4%

Dec-14F
6,667.0
N/A
N/A
N/A
31.5%
N/A
N/A
N/A
N/A
N/A
13.0%

Dec-15F
14,122.0
N/A
N/A
N/A
33.2%
N/A
N/A
N/A
N/A
N/A
11.0%

Dec-16F
N/A
N/A
N/A
33.5%
N/A
N/A
N/A
N/A
N/A
10.5%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
2,955

Dec-14F
2,622

Dec-15F
3,883

Dec-16F
4,421

(3,704)

(662)

(1,247)

(1,540)

451
(12)
(688)
(999)
(338)
9

(505)
(17)
(625)
812
(52)
9

(144)
(18)
(522)
1,953
(54)
9

(280)
(16)
(773)
1,811
(57)
9

0
20
(309)
2,445
0
0
(1,234)

0
20
(23)
(395)
(0)
0
(1,044)

0
20
(25)
(424)
0
0
(1,545)

0
20
(28)
(384)
0
0
(1,758)

121
1,332

322
(1,116)

380
(1,590)

345
(1,797)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Dec-13A
1,192

Jan-11

Jan-12

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

SOURCE: CIMB, COMPANY REPORTS

145

Media - IntegratedTHAILAND
December 12, 2014

Major Cineplex Group


MAJOR TB / MAJO.BK

Market Cap

Avg Daily Turnover

Free Float

US$697.9m

US$1.67m

48.8%

THB22,911m

THB54.40m

881.9 m shares

Current

THB25.75

Target

THB24.38

Prev. Target

THB18.56

Up/Downside

-5.3%
Conviction|

Good but too expensive

CIMB Analyst(s)

We are positive on Majors dominant position in the cinema business in


Thailand, which has benefited from the urbanisation in provincial
areas. However, the stock price looks too demanding at this level as we
do not expect the mild economic recovery and falling agricultural
prices to boost cinema consumption in FY15. Maintain Hold.

Pisut NGAMVIJITVONG
T (66) 2 657 9226
E pisut.ng@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

8.9

14.4

27.4

Absolute

7.7

12.9

41.5

Major shareholders

% held

Mr. Vicha Poolvaraluck


State Street Bank and Trust
Thai NVDR

36.7
10.3
4.8

Show Style "View Doc Map"

We maintain our FY14-16 core EPS


forecasts but raise our target price by
31% to THB24.38, based on a blend of
P/E and DCF, as we roll it forward.
The stock trades at 22x FY15 P/E,
which is 1.5 s.d. above its five-year
historical average. We think that any
good news should be largely in the
price, but we do not rule out the IPO
of SFX, the second-largest cinema
operator,
which
could
spur
competitive intensity in the market.

Aggressive screen expansion


in FY15

Major added 40 new screens in FY14,


which was below the target of 60-70,
due to the political uncertainty in
1H14. Management believes that
retailers will resume their aggressive
branch expansion in second- and
third-tier provinces in FY15, and
Major could tag along on the
expansion cycle. However, news about
the exit of Tesco from international
markets could also affect the pace of
branch expansion for retailers.

Price Close

122.7

19.0

104.9

14.0
15

87.0

Vol m

10
5
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

More attractive blockbusters


in FY15

Management is confident that


blockbusters in FY15, i.e. Avengers,
Furious 7, Star Wars, look more
attractive than those in FY14, which
should also boost Majors cinema
revenue (admissions, concessions and
advertisements). Major still has a
good chance of improving the quality
and quantity of local films, and should
leverage the higher number of screens,
particularly in provinces where
consumers prefer local content to
international films. Although we are
comfortable with the decent movie
consumption in major cities, we are
increasingly concerned about the
demand in provinces as the provincial
economy will be softer than cities due
to the falling agricultural prices, i.e.
paddy rice, rubber, cassava, etc.

Too expensive

Although we are positive on Major as


1) it has the largest market share
position, 2) it is a first-mover in
second- and third-tier provinces and 3)
there is room for improving the local
film industry, we think that the stock
is too pricey at 22x FY15 core P/E,
which is 1.5 s.d. above its five-year
historical average.

Financial Summary

Relative to SET (RHS)

24.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
6,965
1,740
811
0.77
(12.5%)
33.38
0.87
3.38%
13.32
84.94
37.1%
3.63
11.2%

Dec-13A
7,711
2,016
1,092
1.07
39.3%
24.12
1.13
4.37%
11.69
17.01
49.9%
3.80
15.3%

Dec-14F
7,186
1,768
1,066
1.21
13.2%
21.38
1.14
4.43%
13.31
37.41
51.9%
3.81
17.9%
0%
1.02

Dec-15F
7,287
1,870
1,268
1.44
19.0%
18.02
1.36
5.27%
12.27
72.28
42.8%
3.70
21.0%
0%
1.06

Dec-16F
7,572
1,995
1,532
1.74
20.8%
14.92
1.64
6.37%
11.16
23.13
32.7%
3.57
24.5%
0%
1.11

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Major Cineplex GroupThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-12A
6,965
3,352
1,740
(1,083)
658
(133)
157
176
858
180
1,038
(282)

Dec-13A
7,711
3,765
2,016
(1,025)
991
(149)
189
121
1,152
189
1,341
(276)

Dec-14F
7,186
3,489
1,768
(1,051)
717
(141)
284
331
1,192
0
1,192
(181)

Dec-15F
7,287
3,521
1,870
(1,051)
820
(123)
292
454
1,443
0
1,443
(230)

Dec-16F
7,572
3,658
1,995
(1,049)
946
(96)
300
621
1,770
0
1,770
(294)

756
55
0

1,064
27
0

1,010
55
0

1,213
55
0

1,476
55
0

811
680
680

1,092
942
942

1,066
1,066
1,066

1,268
1,268
1,268

1,532
1,532
1,532

Dec-12A
1,740

Dec-13A
2,016

Dec-14F
1,768

Dec-15F
1,870

Dec-16F
1,995

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-12A
481
1,454
132
236
2,302
5,333
2,135
287
1,446
9,200
1,682

Dec-13A
603
1,312
145
425
2,486
5,350
2,186
338
1,537
9,411
1,708

Dec-14F
447
1,416
142
304
2,308
5,276
2,238
338
1,570
9,422
1,709

Dec-15F
128
1,393
148
301
1,969
4,886
2,291
338
1,582
9,097
1,327

Dec-16F
431
1,470
150
316
2,367
4,481
2,346
338
1,527
8,692
1,137

1,527
264
3,474
1,170

1,405
264
3,377
1,894

1,498
264
3,471
1,814

1,496
264
3,087
1,392

1,554
264
2,955
1,328

474
1,643
0
5,117
6,298
87
6,385

610
2,504
0
5,882
5,983
32
6,015

514
2,329
0
5,800
5,954
(23)
5,931

533
1,925
0
5,012
6,133
(79)
6,054

552
1,880
0
4,835
6,359
(134)
6,225

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

(35)

(183)

117

18

(33)
(133)
(282)
1,257
(1,087)
232
0
0
(855)
(135)
86
0
(689)

353
(149)
(276)
1,760
(1,402)
227
0
0
(1,176)
751
0
0
(972)

(152)
(141)
(181)
1,410
(954)
232
0
0
(721)
(80)
0
0
(1,114)

(34)
(123)
(230)
1,501
(619)
238
0
0
(381)
(804)
0
0
(1,090)

33
(96)
(294)
1,601
(603)
245
0
0
(358)
(254)
0
0
(1,306)

356
(382)
20
267
535

(241)
(462)
122
1,335
734

349
(846)
(156)
609
830

0
(1,894)
(774)
316
1,243

0
(1,560)
(318)
988
1,339

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

(37)

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


3.5%
10.7%
(6.8%)
1.4%
3.9%
(4.8%) 15.8% (12.3%)
5.8%
6.7%
25.0%
26.1%
24.6%
25.7%
26.4%
(2.67)
(3.40)
(3.49)
(2.94)
(2.31)
7.10
6.78
6.75
6.95
7.21
4.94
6.65
5.09
6.66
9.81
27.2%
20.6%
15.2%
16.0%
16.6%
122%
111%
95%
95%
95%
66.83
65.46
69.28
70.35
69.18
14.49
12.82
14.15
14.04
13.94
141.2
135.6
143.3
145.1
142.6
9.4%
14.0%
9.6%
11.3%
13.7%
7.2%
10.5%
7.5%
9.0% 10.8%

12-month Forward Rolling FD P/E (x)

Key Drivers

45.0
40.0

TV Adex Rate (% Change)


Average Utilisation Rate (%)
Prime Time Utilisation Rate (%)
Non Prime Time Utilisation Rate (%)
Programming Costs (% Change)
Newsppr adex rev. grth (%)
Newspaper ASP (% Change)
Newsppr circulation grth (%)
Newsprint Cost (% Change)

35.0
30.0

25.0
20.0
15.0

10.0
5.0
0.0
Jan-10
BEC World

Jan-11

Jan-12
Major Cineplex Group

Jan-13
MCOT

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


N/A
N/A
N/A
N/A
N/A
13.0%
12.8% 12.7% 12.9% 12.9%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
19.7%
2.1% 19.1%
-7.7%
1.2%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Jan-14
VGI Global Media PCL

SOURCE: CIMB, COMPANY REPORTS

147

RetailThailand
December 12, 2014

Mc Group
MC TB / MC.BK

Market Cap

Avg Daily Turnover

Free Float

US$341.2m

US$1.16m

30.0%

THB11,200m

THB37.83m

800.0 m shares

Current

THB14.00

Target

THB17.10

Prev. Target

THB17.10

Up/Downside

22.1%
Conviction|

Cut in expansion plans

CIMB Analyst(s)

Kitichan SIRISUKARCHA, CFP


T (66) 2 657 9232
E kitichan.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-12.9

-22.8

-10.4

Absolute

-14.1

-24.3

3.7

Major shareholders

% held

Ms.Sunee Seripanu
HSBC Fund service Department
Mindo Asia Investment

44.1
10.3
8.8

Show Style "View Doc Map"

2015 will be challenging for MC as sales depend largely on domestic


consumption, especially upcountry (around 65% of total revenue),
where purchasing power is eroding due to weak farm prices. With no
sign of recovery in the near term, we project FY15 EPS growth of only
10% yoy. However, its 5% DPS yield is attractive and it has no debt.
We reiterate Hold and our target price
of THB17.10 (17x FY15 P/E, 1 s.d.
below the sectors mean). Next year,
MC will likely suffer from slower sales
at its sales counters in department
stores and the modern trade (SSSG
plunged 30% in 9M14) as purchasing
power has been weak and this
distribution channel is losing its
popularity. As such, we project flat
SSSG in 2015.

Cut in expansion plan


MC initially planned to open 100 new
branches every year but the
slower-than-expected consumption,
coupled with a steep decline in SSSG
from modern trade, has forced the
company to lower its target to 70
branches. However, we believe this
move is positive given that MC should
focus on boosting sales and
generating economies of scales from
its existing 680 stores. Nevertheless,

Price Close

144.0

20.0

134.0

18.0

124.0

16.0

114.0

14.0

104.0

12.0

94.0

10.0
20

84.0

Vol m

10
5
Dec-13

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

Intensifying competition
Competition in the retail industry is
intensifying
amid
the
weak
consumption, forcing existing players
to introduce more discount campaigns.
MC is no exception and the company
may have to sell products at a
discount, which will put pressure on
margins. Note that MC currently has
40% market share.

Maintain Hold for DPS and


recovery
MCs price seems to be undemanding
at 15.7x FY15 P/E (retail sector 26x).
Despite its attractive DPS yield of 5%,
we maintain Hold due to its
unexciting EPS growth.

Financial Summary

Relative to SET (RHS)

22.0

15

this may also indicate that MCs


number of stores is approaching its
optimum level.

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)

Dec-12A
2,556
772
599.3
2.00
101%
6.99
1.16
8.26%
5.95
NA
48.7%
5.21
88.2%

Dec-13A
2,973
873
733.4
1.34
(33%)
10.45
1.08
7.68%
6.99
NA
(45.4%)
3.10
33.4%

Dec-14F
3,712
968
727.5
0.91
(32%)
15.32
0.73
5.20%
9.77
17.90
(47.6%)
2.98
19.8%
0.92

Dec-15F
4,238
1,074
803.6
1.01
10%
13.88
0.80
5.74%
8.99
23.08
(40.8%)
2.86
21.0%
0.89

Dec-16F
4,895
1,248
952.7
1.20
18%
11.71
0.95
6.81%
7.78
16.81
(37.7%)
2.72
23.8%
0.89

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Mc GroupThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
2,973
1,775
873
(90)
783
(17)
0
44
814

Dec-14F
3,712
2,185
968
(153)
815
0
0
26
845

Dec-15F
4,238
2,423
1,074
(170)
904
0
0
33
941

Dec-16F
4,895
2,802
1,248
(173)
1,074
0
0
31
1,110

810
(77)

841
(99)

937
(118)

1,106
(137)

732
1

742
(15)

819
(16)

969
(16)

733
737
737

728
731
731

804
807
807

953
956
956

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
1,792
726
1,363
73
3,953
340
0
118
241
699
108
2
508
285
903
0

Dec-14F
1,831
851
1,240
91
4,013
516
0
115
241
872
0
0
556
293
850
0

Dec-15F
1,689
972
1,474
104
4,239
575
0
117
241
932
54
0
658
289
1,001
0

Dec-16F
1,609
1,123
1,699
120
4,551
586
0
116
241
942
27
0
755
291
1,074
0

155
155
39
1,044
3,759
88
3,847

132
132
39
1,172
3,920
88
4,008

190
190
39
1,304
4,110
88
4,198

Dec-13A
16.3%
13.1%
29.4%
2.10
4.52
45.09
9.5%
117%
83.73
326.4
128.4
50.8%
31.1%

Dec-14F
24.9%
10.9%
26.1%
2.29
4.70
N/A
11.7%
80%
77.57
311.1
122.6
31.7%
21.5%

Dec-15F
14.2%
10.9%
25.3%
2.04
4.90
N/A
12.6%
80%
78.53
272.8
118.2
33.0%
23.3%

Dec-16F
15.5%
16.2%
25.5%
1.98
5.14
N/A
12.4%
80%
78.32
277.5
120.2
34.0%
26.2%

Dec-13A
N/A
N/A
624
-2.0%
N/A
N/A
N/A
N/A

Dec-14F
N/A
N/A
728
-4.4%
N/A
N/A
N/A
N/A

Dec-15F
N/A
N/A
828
0.0%
N/A
N/A
N/A
N/A

Dec-16F
N/A
N/A
928
1.3%
N/A
N/A
N/A
N/A

9
9
39
951
3,614
88
3,701

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
873

Dec-14F
968

Dec-15F
1,074

Dec-16F
1,248

(538)

47

(254)

(278)

41
(17)
(77)
282
(194)
(211)
(1,520)
249
(1,676)

11
0
(99)
927
(325)
(1)
16
8
(302)

18
0
(118)
720
(225)
(5)
0
(4)
(235)

15
0
(137)
847
(180)
(3)
0
2
(181)

3,074

15

16

16

(860)

(582)

(643)

(762)

(705)
1,509
114
(1,395)
(1,377)

(3)
(570)
55
626
626

0
(627)
(142)
485
485

(0)
(746)
(80)
666
666

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


25.0

ASP (% chg, main prod./serv.)


Unit sales grth (%, main prod./serv.)
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)

20.0

15.0
10.0
5.0
0.0
Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Mc Group

SOURCE: CIMB, COMPANY REPORTS

149

TV - FTATHAILAND
December 12, 2014

MCOT
MCOT TB / MCOT.BK

Market Cap

Avg Daily Turnover

Free Float

US$368.4m

US$0.41m

34.2%

THB12,093m

THB13.39m

687.1 m shares

Current

THB17.60

Target

THB20.00

Prev. Target

THB24.79

Up/Downside

13.6%
Conviction|

Sleeping giant or sinking boat?

CIMB Analyst(s)

We hope the new CEO is able to rejuvenate MCOTs competitiveness as


a TV incumbent and monetise its hidden assets in a more efficient way.
The stock has plunged 54% in the past four quarters, and we do not see
any near-term re-rating catalyst. Maintain Hold.

Pisut NGAMVIJITVONG
T (66) 2 657 9226
E pisut.ng@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-11.7

-27.5

-54.4

Absolute

-12.9

-29.0

-40.3

Major shareholders

% held

MINISTRY OF FINANCE, THAILAND


GOVERNMENT SAVINGS BANK
GOVERNMENT OF SINGAPORE
INVESTMENT CORPORATION

65.8
11.5
2.2

Show Style "View Doc Map"

We lower our FY14-16 core EPS


forecasts by 7-37% to reflect the soft
economy in FY14, mild economic
recovery in FY15 and the viewership
loss from intensifying competition in
the digital terrestrial TV business. As
a result, our blended P/E and
DCF-based target price falls by 19% to
THB20.

should be soft. We expect to see some


recovery in 1Q15 or 2Q15 as the new
CEO
should
strengthen
its
programme line-up to gain some
traction with the audience and media
buyers.

Unresolved structural
problems

There is low visibility on the


governments initiative to reform the
The board appointed Mr. Sivaporn SOEs, including MCOT. Under the
Chomsuwan as the CEO of MCOT on current structure, it will be difficult
25 Nov. He replaced Mr. Anek for MCOT to be competitive against
Permvongseni who resigned on 12 Jun. incumbents and new players in the
Mr Sivaporn has more than 15 years new digital terrestrial TV landscape.
of experience in the TV business and The new governments reforms could
was the president of National mean new board members and also a
International Edutainment Plc. prior new CEO, which could disrupt the
to joining MCOT. We believe the business rejuvenation process.
board needs fill the CFO position soon.
We expect the new CEO to redefine Cheap for good reasons
MCOTs strategic direction and boost Based on our new estimates, MCOT
its competitiveness to match its trades at 15.3x FY15 core P/E which is
a 25% discount to its peer BEC. This
competitors.
could imply limited downside risk
Recovery takes time
from the current price but we also do
However, we do not expect MCOT to not see any near-term re-rating
make a prompt recovery as the market catalyst for the stock. Upside risk to
is now crowded with new players. our call hinges on the capability of the
Leading indicators such as audience new CEO to turn around MCOTs
share and ad revenue market share operations.
show that MCOTs 4Q14 results

New CEO takes over

Price Close

104

26.0

81

21.0

59

16.0
4

37

3
2
Vol m

Financial Summary

Relative to SET (RHS)

31.0

1
Dec-13

Mar-14

Jun-14

Source: Bloomberg

52-week share price range





Current

Target

Sep-14

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
5,729
2,662
1,759
2.56
29.6%
6.88
2.30
13.1%
2.80
14.43
(57.2%)
1.52
22.6%

Dec-13A
5,715
2,207
1,527
2.22
(13.2%)
7.92
2.00
11.4%
3.51
3.79
(54.4%)
1.53
19.2%

Dec-14F
4,841
1,267
624
0.91
(59.2%)
19.39
0.77
4.4%
7.07
77.28
(40.3%)
1.58
8.0%
(36.9%)
0.80

Dec-15F
5,138
1,599
816
1.19
30.9%
14.81
1.01
5.7%
6.13
NA
(28.6%)
1.54
10.5%
(16.3%)
1.06

Dec-16F
5,004
1,673
811
1.18
(0.6%)
14.90
1.06
6.0%
5.77
18.75
(30.0%)
1.52
10.3%
(6.9%)
1.02

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

MCOTThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
5,715
3,529
2,207
(540)
1,668
256
0
0
1,924
0
1,924
(396)
0
1,528
(1)
0
0
0
1,527
1,527
1,527

Dec-14F
4,841
2,548
1,267
(651)
616
155
0
0
772
0
772
(147)
0
625
(1)
0
0
0
624
624
624

Dec-15F
5,138
2,967
1,599
(692)
907
136
0
0
1,043
0
1,043
(226)
0
817
(1)
0
0
0
816
816
816

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
5,004
3,012
1,673
(716)
956
112
0
0
1,068
0
1,068
(256)
0
812
(1)
0
0
0
811
811
811

Cash Flow

Dec-13A
4,337
1,516
51
328
6,232
3,988
90
0
859
4,936
0
6
1,358
406
1,770
4
0
1,435
1,439
0
3,208
7,899
61
7,960

Dec-14F
3,653
1,071
47
278
5,049
7,891
90
0
634
8,614
0
55
1,576
343
1,974
498
0
3,499
3,997
0
5,972
7,633
59
7,691

Dec-15F
2,760
1,542
27
295
4,623
7,867
90
0
736
8,692
0
55
1,472
365
1,892
442
0
3,075
3,517
0
5,409
7,848
59
7,906

Dec-16F
2,846
1,030
56
287
4,220
7,587
90
0
720
8,396
0
55
1,362
355
1,773
387
0
2,448
2,835
0
4,608
7,949
59
8,008

Dec-13A
(0.2%)
(17.1%)
38.6%
6.30
11.50
128.2
20.6%
103%
96.36
7.57
231.6
29.0%
24.2%

Dec-14F
(15.3%)
(42.6%)
26.2%
4.51
11.11
24.8
19.1%
161%
97.53
7.80
233.5
9.9%
9.8%

Dec-15F
6.1%
26.2%
31.1%
3.29
11.42
38.4
21.7%
74%
92.81
6.22
256.2
9.1%
12.8%

Dec-16F
(2.6%)
4.6%
33.4%
3.50
11.57
45.2
23.9%
87%
94.07
7.58
260.3
8.9%
12.9%

Dec-13A
-1.0%
N/A
N/A
66.1%
-8.8%

Dec-14F
-24.3%
N/A
N/A
60.8%
-14.9%

Dec-15F
0.5%
N/A
N/A
59.0%
19.6%

Dec-16F
-2.1%
N/A
N/A
61.2%
6.8%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
2,207
0
(302)
19
0
0
22
(801)
1,145
(195)
37
2,087
120
2,049
(4)
26
0
(1,580)
0
188
(1,371)
1,824
3,190
3,195

Dec-14F
1,267
0
3,544
0
0
0
(25)
(147)
4,639
(5,153)
0
128
0
(5,026)
543
0
0
(1,007)
0
167
(298)
(684)
156
(362)

Dec-15F
1,599
0
(476)
0
0
0
(24)
(226)
873
(1,269)
0
(33)
0
(1,301)
(55)
0
0
(601)
0
192
(465)
(893)
(483)
(404)

Dec-16F
1,673
0
360
0
0
0
(21)
(256)
1,756
(1,036)
0
(20)
0
(1,056)
(55)
0
0
(710)
0
151
(614)
87
645
721

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


45.0
40.0

Adex Revenue Growth (%)


ARPU (% Change)
No. Of Subscribers (% Change)
Adex/total Revenue (%)
Programming Costs Change (%)

35.0
30.0

25.0
20.0
15.0

10.0
5.0
0.0
Jan-10
BEC World

Jan-11

Jan-12
Major Cineplex Group

Jan-13
MCOT

Jan-14
VGI Global Media PCL

SOURCE: CIMB, COMPANY REPORTS

151

HotelsThailand
December 12, 2014

Minor International
MINT TB / MINT.BK

Market Cap

Avg Daily Turnover

Free Float

US$4,479m

US$8.28m

50.9%

THB147,057m

THB269.5m

4,001 m shares

Current

THB36.75

Target

THB42.00

Prev. Target

THB42.00

Up/Downside

14.3%
Conviction|

A safe bet on tourism recovery

CIMB Analyst(s)

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

15.2

6.5

36.5

Absolute

14.0

5.0

50.6

Major shareholders

% held

Heinecke family
Mr Nithi Osathanugrah

34.0
8.6

Show Style "View Doc Map"

MINT will not only benefit from tourism recovery in Thailand, it will
also profit from an emerging tourism trend in Africa. Its food business
is likely to see a stronger year in 2015. We project improvements all
round from MINT in 2015, driving up its earnings growth to almost
30% next year.
MINT is one of our top picks for the
Thai market next year. We reiterate
our Add call and our THB42 target
price, still based on 24x CY16 P/E (1
s.d. above 5-year historical mean). We
believe that a pick-up in tourist
arrivals and the food business will
help catalyse its share price.

Turnaround in Thai hotels


Its hotels in Thailand will benefit from
a recovery in tourist arrivals next year
on the back of a more stable political
environment
while
its
hotels
elsewhere should continue to profit
from the strong tourism trend
worldwide. We expect its Thai hotels
occupancy rate to rise from about
60% in 2014 to 70% in 2015.
About 25% of its total hotel rooms are
in Thailand (14% in Bangkok and 11%
upcountry), 21% are in other Asian
countries (e.g. Maldives, Indonesia,
UAE, China), 40% are in Australia
and New Zealand and the remaining
13% are in Africa.

Recovery in food business


Although its Thailand hub has seen
positive same-store-sale growth since

Vol m

Price Close

152.0

36.0

138.0

31.0

124.0

26.0

110.0

21.0

96.0

16.0
50
40
30
20
10

82.0

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


36.75
38.00

18.70

42.00
Current

Target

2Q14, its Singapore and China hubs


still experienced negative SSSG in
3Q14. We expect these two hubs to
show better performance next year as
MINT tries to introduce new food
concepts in Singapore and increase its
sales in China. The Thai hub should
also see better growth next year on the
back of a stronger economy.

Aggressive expansion
plans
MINT plans to add 20 hotels (2,574
rooms) using its own money during
2014-16 on top of the 93 hotels under
its ownership, joint venture and
Management Letting Right (MLR)
(11,297 rooms) now. MINT also plans
to add 28 hotels (4,210 rooms) under
its managed hotel portfolio. That said,
MINT plans to grow its number of
rooms by 15% CAGR over the next
three years.
On the food side, MINT plans to add
about 220 outlets per annum over the
next few years. It expects to have
2,600 restaurants by 2018, from 1,648
at the end of 3Q14 (11% CAGR).

Financial Summary

Relative to SET (RHS)

41.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
31,310
5,406
3,243
0.93
66.8%
39.45
0.28
0.77%
26.37
73.8
95.0%
7.58
20.1%

Dec-13A
34,678
6,090
4,101
1.07
14.5%
34.44
0.34
0.92%
24.74
NA
60.3%
5.86
19.1%

Dec-14F
39,243
6,519
4,524
1.13
6.0%
32.50
0.37
1.02%
23.99
109.8
54.5%
5.23
17.0%
0%
1.01

Dec-15F
47,239
8,132
5,753
1.44
27.2%
25.56
0.47
1.29%
19.10
85.0
46.3%
4.60
19.1%
0%
1.04

Dec-16F
54,320
9,667
7,021
1.75
22.0%
20.95
0.58
1.58%
15.92
66.4
38.2%
4.01
20.5%
0%
1.10

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Minor InternationalThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
34,678
20,129
6,090
(2,465)
3,625
(1,027)
530
1,729
4,857
0
4,857
(675)

Dec-14F
39,243
21,962
6,519
(2,630)
3,888
(1,012)
662
1,833
5,371
0
5,371
(752)

Dec-15F
47,239
26,600
8,132
(2,873)
5,259
(1,031)
695
1,979
6,902
0
6,902
(1,035)

Dec-16F
54,320
30,805
9,667
(3,140)
6,527
(926)
730
2,078
8,410
0
8,410
(1,262)

4,182
(80)
0

4,619
(95)
0

5,867
(114)
0

7,149
(128)
0

4,101
4,101
4,101

4,524
4,524
4,524

5,753
5,753
5,753

7,021
7,021
7,021

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
3,370
3,332
1,675
2,255
10,632
23,432
9,547
11,804
4,522
49,304
971

Dec-14F
3,282
3,731
1,792
2,278
11,083
24,603
9,648
12,276
4,748
51,275
777

Dec-15F
3,244
4,179
1,918
2,300
11,641
27,064
10,179
12,767
4,985
54,995
816

Dec-16F
3,211
4,681
2,052
2,323
12,267
29,770
10,743
13,278
5,234
59,025
938

8,694
1,293
10,958
18,602

7,598
1,319
9,694
18,842

8,147
1,346
10,309
18,136

8,752
1,373
11,063
17,052

3,501
22,103
0
33,062
25,090
1,784
26,875

3,851
22,693
0
32,386
28,122
1,850
29,972

4,236
22,372
0
32,681
31,976
1,980
33,956

4,448
21,500
0
32,562
36,680
2,050
38,730

Dec-13A
10.8%
12.7%
17.6%
(4.05)
6.27
3.53
13.9%
25.5%
33.08
41.28
120.9
8.4%
8.3%

Dec-14F
13.2%
7.0%
16.6%
(4.08)
7.03
3.84
14.0%
25.5%
32.85
36.62
110.8
8.4%
8.1%

Dec-15F
20.4%
24.7%
17.2%
(3.93)
7.99
5.10
15.0%
25.2%
30.56
32.81
102.1
10.4%
10.3%

Dec-16F
15.0%
18.9%
17.8%
(3.69)
9.17
7.05
15.0%
25.2%
29.85
30.89
98.8
11.9%
11.9%

Dec-13A
70.0%
5,573.0
12,800
1,457
100

Dec-14F
70.0%
5,740.2
14,968
1,557
100

Dec-15F
75.0%
6,199.4
16,724
1,657
100

Dec-16F
75.0%
6,571.4
18,062
1,757
100

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
6,090
1,798
94

Dec-14F
6,519
662
1,362

Dec-15F
8,132
695
1,509

Dec-16F
9,667
730
1,224

0
(1,027)
(675)
6,280
(4,664)
0
(3,518)
0
(8,181)
(1,315)
3,651
0
(1,353)

0
(1,012)
(752)
6,779
(3,802)
0
(287)
0
(4,089)
(1,352)
(0)
0
(1,493)

0
(1,031)
(1,035)
8,270
(5,333)
0
(539)
0
(5,872)
(667)
(0)
0
(1,899)

0
(926)
(1,262)
9,434
(5,846)
0
(413)
0
(6,259)
(962)
(0)
0
(2,317)

587
1,569
(332)
(3,216)
(874)

66
(2,779)
(88)
1,339
3,703

130
(2,436)
(38)
1,731
3,429

70
(3,208)
(33)
2,214
4,101

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

45.0

Average Occupancy Rate (%)


Avg room rate (night) (THB)
No. Of Rooms
No. Of Food Outlets
No. Of New Outlets

40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11
Central Plaza Hotel

Jan-12

Jan-13
Hotel Shilla

Jan-14
Minor International

SOURCE: CIMB, COMPANY REPORTS

153

Food & BeveragesThailand


December 12, 2014

MK Restaurant Group
M TB / M.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,623m

US$1.30m

24.6%

THB53,291m

THB42.33m

793.8 m shares

Current

THB58.75

Target

THB74.00

Prev. Target

THB74.00

Up/Downside

26.0%
Conviction|

Recovery on the menu

CIMB Analyst(s)

We expect 2015 to be better for M as greater economic and political


stability should boost consumer spending and thus keep its expansion
plans on track. We also foresee better earnings prospects, supported by
improving sales and continued branch expansion.

Kitichan SIRISUKARCHA, CFP


T (66) 2 657 9232
E kitichan.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

Relative

1.2

0.6

7.0

Absolute

0.0

-0.9

21.1

Major shareholders

12M

% held

Thirakomen Yupin
Hanjitkasem Somchai
Hanjitkasem Somnuk

21.9
18.1
18.1

Show Style "View Doc Map"

We keep our Add call and DCF-based


(WACC 7.6%) target price of THB74.
A key driver is Ms continued branch
expansion. We expect it to achieve an
12.5% revenue CAGR and 16.5% net
profit CAGR over the next three years
(FY15-17).
But
ESOP-related
provisions in FY14-16 will put
pressure on net earnings. Its strengths
lie in its solid financials (cash in hand
of c.THB8bn or THB8.8 per share),
and potential M&A in the coming
years (not yet in our forecast),
providing upside to its earnings.

SSSG almost positive


Overall same-store sales growth
(SSSG) showed signs of improvement,
narrowing to -4.5% in 3Q14 (vs. -5%
2Q14 and -9% 1Q14). SSSG for MK
Suki Restaurant fell 1% qoq from -5%
in 2Q14 but its Bangkok branches
posted positive SSSG for the first time
this year (+1% in 3Q14 compared to
-3% upcountry). However, Yayois
SSSG plunged 10% in 3Q14. M

Vol m

Price Close

132.0

66.0

125.0

61.0

118.0

56.0

111.0

51.0

104.0

46.0
10
8
6
4
2

97.0

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

believes that its SSSG will turn


positive in FY15.

Expansion on track.
M reiterates its plan to open around
60 new restaurants each year. Its
branch expansion plan is still on track,
as 19 new branches were opened in
3Q14 (42 branches in 9M14), bringing
Ms total branches to 548 at
end-9M14. With the 16 new branches
scheduled for opening in 4Q14, M
would have added 58 new branches in
2014.

Maintain Add
We maintain our positive view on Ms
operation in the longer term and its
solid net cash position. Ms estimated
dividend yields are attractive, at 4.5%
in FY15 and 5.2% in FY16 (based on
80% dividend payout). Considering its
strong financials, M can afford to pay
higher dividends.

Financial Summary

Relative to SET (RHS)

71.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
12,987
2,993
2,031
4.49
14.0%
13.07
4.50
7.66%
8.89
19.82
5.1%
23.30
156%

Dec-13A
13,969
2,875
2,039
3.17
(29.5%)
18.55
1.60
2.72%
12.86
NA
(7.8%)
4.19
33%

Dec-14F
15,023
3,200
2,196
2.58
(18.4%)
22.73
1.74
2.96%
15.14
32.81
(12.8%)
4.58
19%
0%
1.12

Dec-15F
17,013
3,581
2,498
2.76
6.7%
21.31
2.59
4.41%
14.32
24.52
(16.8%)
4.58
22%
0%
1.03

Dec-16F
19,132
3,979
2,813
3.11
12.6%
18.92
3.01
5.12%
12.80
22.56
(19.6%)
4.58
24%
0%
1.02

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

MK Restaurant GroupThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
13,969
9,940
2,875
(598)
2,276
(21)
0
271
2,526

Dec-14F
15,023
10,441
3,200
(704)
2,495
(21)
0
271
2,745

Dec-15F
17,013
11,773
3,581
(709)
2,872
(21)
0
271
3,122

Dec-16F
19,132
13,182
3,979
(712)
3,267
(21)
0
271
3,517

2,526
(487)

2,745
(549)

3,122
(624)

3,517
(703)

2,039
0

2,196
0

2,498
0

2,813
0

2,039
2,039
2,039

2,196
2,196
2,196

2,498
2,498
2,498

2,813
2,813
2,813

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

EFATableCorpIS|

Cash Flow

Dec-14F
1,490
118
244
3,686
5,537
4,311
0
56
5,658
10,025
0
0
1,506
452
1,958
0

Dec-15F
1,949
134
279
3,686
6,047
4,333
0
56
5,658
10,046
0
0
1,723
436
2,159
0

Dec-16F
2,282
150
317
3,686
6,434
4,351
0
56
5,658
10,064
0
0
1,956
444
2,400
0

1,586
1,586
0
3,864
11,142
0
11,142

1,992
1,992
0
3,951
11,612
0
11,612

2,323
2,323
0
4,482
11,612
0
11,612

2,487
2,487
0
4,887
11,612
0
11,612

Dec-13A
7.6%
(4.0%)
20.6%
1.10
14.04
107.2
19.3%
62%
2.87
19.43
158.4
133%
34%

Dec-14F
7.5%
11.3%
21.3%
1.64
12.82
117.5
20.0%
72%
3.38
18.72
134.0
21%
22%

Dec-15F
13.2%
11.9%
21.0%
2.15
12.82
135.3
20.0%
94%
2.70
18.21
112.5
24%
25%

Dec-16F
12.5%
11.1%
20.8%
2.52
12.82
153.9
20.0%
97%
2.72
18.32
113.1
27%
28%

Dec-13A
N/A
2.8%
N/A
N/A
16.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Dec-14F
N/A
7.8%
N/A
N/A
20.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Dec-15F
N/A
10.8%
N/A
N/A
23.2%
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Dec-16F
N/A
10.3%
N/A
N/A
20.8%
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
2,875

Dec-14F
3,200

Dec-15F
3,581

Dec-16F
3,979

(327)

166

179

(700)
(21)
(487)
1,761
(1,891)
(1)
2
(7,928)
(9,818)

(50)
(21)
(549)
2,252
(730)
0
0
0
(730)

(200)
(21)
(624)
2,901
(730)
0
0
0
(730)

(344)
(21)
(703)
3,089
(730)
0
0
0
(730)

9,085

112

94

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

(1,270)

(1,575)

(2,345)

(2,725)

(1,437)
6,378
(1,680)
(8,057)
(8,036)

238
(1,225)
297
1,522
1,543

162
(2,183)
(12)
2,171
2,192

84
(2,642)
(282)
2,359
2,380

Key Drivers

12-month Forward Rolling FD P/E (x)


30.0

ASP (% chg, main prod./serv.)


Unit sales grth (%, main prod./serv.)
Util. rate (%, main prod./serv.)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
Util. rate (%, 2ndary prod/serv)
ASP (% chg, tertiary prod/serv)
Unit sales grth (%,tertiary prod/serv)
Util. rate (%, tertiary prod/serv)
Unit raw mat ASP (%chg,main)
Total Export Sales Growth (%)
Export Sales/total Sales (%)

25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Dec-13A
871
160
226
3,686
4,943
4,286
0
56
5,722
10,063
0
0
1,858
420
2,278
0

Jan-11

Jan-12

Jan-13

Jan-14

MK Restaurant Group

SOURCE: CIMB, COMPANY REPORTS

155

RetailThailand
December 12, 2014

Officemate
OFM TB / OFM.BK

Market Cap

Avg Daily Turnover

Free Float

US$477.6m

US$0.20m

24.4%

THB15,680m

THB6.59m

320.0 m shares

Current

THB49.00

Target

THB54.00

Prev. Target

THB54.00

Up/Downside

10.2%
Conviction|

The Amazon next door

CIMB Analyst(s)

OFM, the market leader in stationery and office supplies in Thailand,


has strong growth potential, especially in e-commerce. Management
aims to expand the companys market share from the current 20% to
40-50% in the next three years.

Kitichan SIRISUKARCHA, CFP


T (66) 2 657 9232
E kitichan.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

0.2

-0.5

42.7

Absolute

-1.0

-2.0

56.8

Major shareholders

% held

Mr.Narongrit Chirathivat
Mr.Sudhitham Chirathivat
Mr.Worawoot Ounjai

9.8
9.1
8.8

Show Style "View Doc Map"

We reiterate our Hold call and THB54


DCF-based target price (WACC 9%,
LTG 3.0%). In our view, OFMs
current share price fully reflects its
stronger outlook post-merger and its
earnings growth will be pressured by
the costs of its online retail business
(due to start in 2H14). Investors
looking to accumulate OFM as mid- to
long-term investment should wait till
it falls below THB45 (25x FY15 P/E or
1x PEG, the retail sectors 5-yr mean).

Top distributor of office


supplies
The bulk of OFMs revenue comes
from OfficeMate (60%) and B2S
(40%). In our view, OFMs appeal lies
with OfficeMate, the market leader in
stationery and office supplies. OFM
has
strong
growth
potential
(especially its e-commerce business),
given its extensive distribution
channels and free nationwide delivery
service.
Management targets to
expand the companys market share
from 20% currently to 40-50% in the
next three years by boosting the
revenue contribution of its house
brands, which generate higher
margins around 10%. We forecast

Price Close

170

44.0

141

34.0

113

24.0
2

84

Vol m

1
1
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

3-year sales CAGR (2014-16) of 17%


for OfficeMate and 8% for B2S.

Online retail store to boost


mid- to long-term growth
OFM will accelerate its marketing
efforts and open a new distribution
centre for its online retail business in
4Q14. Given OFMs delivery service
strength and Centrals (owned by the
Chirathivat family and acquired a 63%
stake in OFM) trusted brand, we
forecast online retail sales CAGR of
120% over 2015-17. Although the
online business is likely to incur losses
in the first few years of operations, we
expect earnings to gradually improve.
In our view, the online retail business
will be a new growth engine for OFM.
It is a low-risk business due to the
minimal capex required.

Recovery reflected in price


We like OFM for its mid- to long-term
growth story and solid financials. The
company had cash of THB800m and
no debt and generates operating
cashflow of around THB500m p.a.,
sufficient to fund its annual capex of
THB500m. However, we think that
OFMs current share price reflects its
expected near-term earnings recovery.

Financial Summary

Relative to SET (RHS)

54.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
CIMB/consensus EPS (x)

Dec-12A
6,814
530
271.8
0.34
272%
145.2
1.21
2.47%
74.98
52.35
(17.0%)
3.70
10.0%

Dec-13A
8,690
723
408.8
1.37
305%
35.8
0.25
0.51%
20.57
72.27
(17.8%)
3.43
9.9%

Dec-14F
10,166
845
469.4
1.56
14%
31.5
0.51
1.04%
17.39
43.61
(20.2%)
3.22
10.5%
0.95

Dec-15F
12,091
1,038
585.9
1.92
23%
25.5
0.59
1.20%
13.82
28.84
(25.4%)
2.97
12.1%
0.98

Dec-16F
14,299
1,286
762.7
2.47
29%
19.8
0.73
1.49%
10.73
20.38
(32.3%)
2.70
14.3%
1.03

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

OfficemateThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-12A
7,177
2,019
530
(134)
396
(4)
(13)
0
389

Dec-13A
9,120
2,560
723
(209)
514
(1)
0
0
550

Dec-14F
10,665
2,995
845
(259)
587
0
0
0
622

Dec-15F
12,685
3,527
1,038
(306)
732
0
0
0
767

Dec-16F
15,002
4,137
1,286
(333)
953
0
0
0
988

379
(108)

514
(105)

587
(117)

732
(146)

953
(191)

272

409

469

586

763

272
279
279

409
438
438

469
498
498

586
614
614

763
790
790

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-12A
722
405
1,266
0
2,393
564
0
3,343
106
4,012
0
2
2,051
0
2,053
0

Dec-13A
813
576
1,411
0
2,799
711
0
3,346
104
4,162
0
0
2,269
0
2,269
0

Dec-14F
982
574
1,565
0
3,121
939
0
3,352
104
4,396
0
0
2,525
0
2,525
0

Dec-15F
1,338
683
1,868
0
3,889
1,066
0
3,349
104
4,520
0
0
3,016
0
3,016
0

Dec-16F
1,873
807
2,217
0
4,897
1,145
0
3,351
104
4,600
0
0
3,578
0
3,578
0

58
58
56
2,167
4,239

49
49
76
2,394
4,567

52
52
66
2,643
4,873

50
50
71
3,137
5,271

51
51
68
3,697
5,800

4,239

4,567

4,873

5,271

5,800

Key Ratios
Dec-12A Dec-13A Dec-14F
530
723
845
922

(974)
(4)
(108)
367
(405)
(3,168)
(68)
4,047
406
3,000

Dec-15F
1,038

Dec-16F
1,286
89

(98)

105

78

(42)
(1)
(105)
477
(159)
(198)
40
57
(260)

0
0
(117)
833
(400)
(92)
27
(8)
(473)

0
0
(146)
969
(350)
(80)
0
4
(426)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

0
0
(191)
1,185
(350)
(64)
0
(2)
(416)
0

(387)

(80)

(164)

(188)

(234)

(3,109)
(496)
277
773
777

(6)
(86)
131
217
217

1
(163)
197
360
360

(0)
(188)
356
544
544

0
(234)
535
769
769

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


17.3%
27.5%
17.0%
18.9%
18.3%
46.6%
36.4%
16.9%
22.8%
23.9%
7.78%
8.32%
8.31%
8.59%
9.00%
2.25
2.54
3.07
4.18
5.85
13.25
14.27
15.23
16.47
18.12
102
1,034
N/A
N/A
N/A
28.3%
20.4%
20.0%
20.0%
20.0%
138%
18%
32%
30%
29%
39.09
20.60
20.64
18.96
19.06
75.82
74.46
70.80
68.41
68.80
121.7
120.2
114.1
110.4
111.1
39.7%
15.2%
16.0%
19.1%
24.4%
14.3%
12.3%
13.0%
14.9%
17.6%

Key Drivers
ASP (% chg, main prod./serv.)
Unit sales grth (%, main prod./serv.)
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
38
49
57
65
73
N/A
N/A
3.0%
2.0%
0.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
78
85
96
106
116
N/A
N/A
-5.0%
-3.0%
0.0%

SOURCE: CIMB, COMPANY REPORTS

157

Dry Bulk ShippingThailand


December 12, 2014

Precious Shipping
PSL TB / PSL.BK

Market Cap

Avg Daily Turnover

Free Float

US$487.6m

US$1.20m

39.5%

THB16,009m

THB39.04m

1,040 m shares

Current

THB15.40

Target

THB18.45

Prev. Target

THB18.45

Up/Downside

19.8%
Conviction|

Tough markets

CIMB Analyst(s)

PSLs unexpectedly large loss in 3Q14 clearly indicated that 2014 had
been a tougher year than previously forecast. Secondhand vessel prices
have also been dropping, suggesting that the markets expectations of
future freight rates are moderating.

Raymond YAP, CFA


T (60) 3 2261 9072
E raymond.yap@cimb.com

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-17.8

-41.5

-40.8

Absolute

-19.0

-43.0

-26.7

Major shareholders

% held

Nishita Shah & family


Khalid Hashim & family
Thai NVDR

43.0
17.5
5.3

We maintain our Reduce call on PSL


because we expect its 4Q14 results to
be also weak and 2015 freight markets
to be only modestly stronger than in
2014. These are the key de-rating
catalysts. Our target price is based on
PSLs SOP which is anchored to its
secondhand vessel values.

Freight markets more difficult


than expected in 2014

Show Style "View Doc Map"

So far, 2014 has turned out to be a


more difficult year than expected for
the dry bulk markets (1) excessive
capacity and competition among
capesize operators depressed capesize
rates despite record Chinese iron ore
imports, (2) Chinese coal imports
have declined as a result of more
domestic mining output, (3) the
impact of Indonesias early-January
ban on bauxite and nickel ore exports
continues to weigh on these trades,
and (4) Argentinas ban on grain
exports earlier this year deprived the
markets of much-needed cargoes.

Freight rate outlook


The freight markets have improved
sequentially this quarter due to the US
grain season but the handysize and
supramax markets have been less

Price Close

132

24.0

105

19.0

77

14.0
15

49

Vol m

10
5

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


15.40
29.25

15.40

18.45
Current

Target

robust than a year ago. We expect


2015 to look stronger on the back of
higher Indian coal imports and low
iron ore import prices which should
trigger strong Chinese import growth.
But this may be partially offset by
higher Chinese tariffs on imported
coal and a bumper Chinese grain
harvest that could result in lower
Chinese grain imports. Overall, we
expect a small improvement in dry
bulk freight rates in 2015 but the
weakening Chinese economy will act
as a headwind preventing significant
improvement in spot rates.

Fleet renewal
PSL will take delivery of 17 new ships
in FY15 and another seven in FY16. It
plans to sell up to 21 older and/or
fuel-inefficient ships by early 2016.
Once this process is completed, the
fleet average age should drop from 9.5
to 3.5 years and the average size
should rise from 35,000 to 50,000
dwt. As a result, we expect PSL to
reduce its operating costs/day due to
lower maintenance costs and also
lower voyage costs resulting from
better fuel consumption. The benefits
will be felt more deeply in FY16.

Financial Summary

Relative to SET (RHS)

29.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
3,499
1,223
141
(0.10)
(122%)
NA
0.36
2.34%
18.63
NA
49%
1.11
(0.72%)

Dec-13A
3,869
1,153
528
(0.40)
292%
NA
0.36
2.34%
18.94
6.62
41%
1.03
(2.78%)

Dec-14F
4,895
1,875
106
0.11
NA
140.1
0.36
2.34%
14.35
25.52
74%
1.05
0.74%
0%
0.48

Dec-15F
5,559
2,439
1,872
0.10
(7%)
150.4
0.36
2.34%
14.04
4.23
112%
0.96
0.66%
0%
1.89

Dec-16F
6,392
3,113
142
0.14
33%
112.9
0.36
2.34%
12.39
11.48
140%
0.97
0.85%
0%
0.18

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Precious ShippingThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
3,869
1,478
1,153
(1,137)
16
(450)
32
0
(402)
947
545
(8)

Dec-14F
4,895
2,178
1,875
(1,319)
556
(434)
5
0
127
(8)
119
(10)

Dec-15F
5,559
2,757
2,439
(1,721)
719
(604)
5
0
119
1,766
1,885
(10)

Dec-16F
6,392
3,445
3,113
(2,193)
920
(770)
5
0
155
0
155
(10)

537
(9)
0

109
(3)
0

1,875
(3)
0

145
(3)
0

528
(419)
(419)

106
114
114

1,872
106
106

142
142
142

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-14F
2,720
2,176
114
0
5,010
24,535
525
4
0
25,064
654

Dec-15F
5,488
2,361
117
0
7,966
33,143
530
4
0
33,677
654

Dec-16F
5,696
2,592
123
0
8,412
36,969
535
4
0
37,509
654

221
102
977
8,619

246
102
1,002
13,465

254
102
1,010
23,567

267
102
1,023
28,102

0
8,619
283
9,879
15,621
10
15,631

0
13,465
283
14,750
15,311
13
15,324

0
23,567
283
24,859
16,767
16
16,784

0
28,102
283
29,408
16,493
19
16,512

Dec-13A
10.6%
(5.7%)
29.8%
(6.09)
15.02
0.04
1.45%
NA
60.89
19.01
36.27
0.06%
0.10%

Dec-14F
26.5%
62.6%
38.3%
(10.96)
14.72
1.25
8.38%
301%
90.70
14.50
31.39
2.05%
2.07%

Dec-15F
13.6%
30.1%
43.9%
(18.01)
16.12
1.16
0.53%
321%
95.27
15.05
32.58
2.17%
2.07%

Dec-16F
15.0%
27.6%
48.7%
(22.17)
15.86
1.16
6.46%
247%
94.98
14.96
32.37
2.09%
2.17%

Dec-13A
1,099.0
7,508.0
-8.7%
14,235
29.9%
40.0
40

Dec-14F
1,154.0
8,198.9
9.2%
15,513
9.0%
45.0
45

Dec-15F
1,269.4
9,008.8
9.9%
16,243
4.7%
44.0
44

Dec-16F
1,396.3
9,810.8
8.9%
17,338
6.7%
51.0
51

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
1,153

Dec-14F
1,875

Dec-15F
2,439

Dec-16F
3,113

(845)

(271)

(180)

(224)

714
0
(9)
1,013
(3,540)
4,709
0
31
1,200
206
0
0
(415)

(75)
0
(10)
1,518
(6,058)
671
0
(350)
(5,737)
4,846
0
0
(416)

0
0
(10)
2,249
(12,627)
4,414
0
(350)
(8,563)
10,102
0
0
(416)

0
0
(10)
2,879
(5,670)
0
0
(350)
(6,020)
4,536
0
0
(416)

(1,080)
(1,289)
923
2,418
2,213

(434)
3,997
(222)
628
(4,219)

(604)
9,082
2,768
3,788
(6,314)

(770)
3,350
209
1,395
(3,141)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50
45
40
35
30
25
20
15
10
5
0
Jan-10

Dec-13A
2,942
1,892
102
0
4,936
20,050
520
4
0
20,574
654

Average Baltic Dry Index


Average Bulk Rate (US$/day)
Bulk Rates (yoy Change %)
Capacity (no. Of Calendar Days)
Bulk Capacity (yoy Change %)
Fleet Size (no. Of Vessels)
No. Of Dry Bulk Ships

Jan-11
MISC Bhd

Jan-12

Jan-13

Pacific Basin Shipping

Jan-14
Precious Shipping

SOURCE: CIMB, COMPANY REPORTS

159

Property DevelopmentThailand
December 12, 2014

Pruksa Real Estate


PS TB / PS.BK

Market Cap

Avg Daily Turnover

Free Float

US$2,035m

US$4.51m

22.5%

THB66,797m

THB146.7m

2,222 m shares

Current

THB30.00

Target

THB45.95

Prev. Target

THB45.95

Up/Downside

53.2%
Conviction|

Trusted growth

CIMB Analyst(s)

We maintain our Add rating as we believe PS remains a solid


long-term investment with an FY15 EPS growth of 20%, rising
efficiency, and well-contained gearing of below 1x. Our target price
based on 12x CY16 P/E (0.5 s.d. above 5-year mean) stays at THB46.

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-9.3

-6.2

30.8

Absolute

-10.5

-7.7

Major shareholders

44.9
% held

Mr. Thongma's family


Mrs. Rattana Promsawadi
Investment Funds

70.2
3.7
1.4

Show Style "View Doc Map"

We keep our EPS estimates


unchanged. PS has kept its FY14
presales and revenue targets, and is
confident of a minimum 15% revenue
growth and ongoing bottom line
improvements in FY15. Key catalysts
include margin expansion and more
exciting new launches in FY15.

Stronger FY15
We remain upbeat about the 20% EPS
growth for FY15 given our revenue has
been 34% locked in by higher-margin
condo backlog. PS can easily meet our
revenue estimate with flat growth for
TH/SDH next year. Note that this
condo backlog carries lower cost than
the FY14 backlog given normalised
construction cost after the 4Q11 flood
crisis. The shorter SDH/TH business
cycle of 90 days should support
margin expansion for landed housing.
As for FY14, despite the high 9M14
lock-in rate vs. our FY14 EPS, we keep
our EPS estimates as we expect a
softer 4Q14 due to lower gross
margins from lower utilisation of
factories (with its new factory No. 6)
and further provision of THB70bn for
its Vietnam operations. The upside
potential for FY14 EPS cannot be
ruled out if PS delivers its optimistic
revenue target of THB42bn (vs.
CIMBs THB40bn) and its SG&A ratio

Vol m

Price Close

170

34.0

152

29.0

134

24.0

116

19.0

98

14.0
25
20
15
10
5

80

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

tapers off faster than expected, given


only one new lower-end condo launch
in 4Q14. Also, our FY14 revenue
estimate has been 105% secured by
9M14s sales and backlog.

Upbeat targets
Target growth for FY15 presales is
likely to be in the range of 8-10%,
while FY15s revenue from real estate
sales should be between 15% and 20%.
Gross margin should improve further
due to a higher lower-cost condo mix
and shorter business cycle for
TH/SDH. Gearing is guided at below
1x. As for FY14, PS has retained its
targets at THB43bn for presales and
THB42bn for sales revenue. 9M14
presales and revenue formed 73% of
PSs FY15 targets (9M14 revenue was
75% of our FY14 estimate). New
launches for FY14 were revised down
to 62 projects worth THB58bn from
73 projects worth THB78bn. Ten
more projects worth THB9.6bn will be
launched in 4Q14 (TH 5, SDH 4,
condo 1).

Deserves re-rating
Stay invested for promising long-term
returns. PS deserves to re-rate above
its 5-year mean P/E, given its ongoing
solid growth, high ROE and healthy
gearing level.

Financial Summary

Relative to SET (RHS)

39.0

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
27,023
5,532
3,898
1.75
37.0%
17.07
0.52
1.73%
8.87
60.9
71.4%
3.32
21.0%

Dec-13A
38,848
6,995
5,801
2.61
48.8%
11.49
0.72
2.39%
6.22
237.4
69.6%
2.67
25.8%

Dec-14F
40,000
8,340
6,164
2.77
6.3%
10.81
0.77
2.55%
5.94
26.2
64.7%
2.28
22.8%
0%
1.00

Dec-15F
46,000
10,006
7,431
3.34
20.6%
8.97
0.77
2.55%
5.07
25.6
53.2%
1.92
23.2%
0%
1.03

Dec-16F
52,900
11,458
8,507
3.83
14.5%
7.83
0.77
2.55%
4.46
25.0
44.6%
1.62
22.4%
0%
1.11

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Pruksa Real EstateThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
38,848
13,498
6,995
(374)
6,621
385
0
193
13,702
0
7,199
(1,399)

Dec-14F
40,000
14,400
8,340
(460)
7,880
(419)
0
195
13,716
0
7,657
(1,493)

Dec-15F
46,000
16,790
10,006
(484)
9,522
(489)
0
197
16,015
0
9,231
(1,800)

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
52,900
19,044
11,458
(508)
10,950
(582)
0
199
18,154
0
10,568
(2,061)

5,801
0
0

6,164
0
0

7,431
0
0

8,507
0
0

5,801
5,801
5,801

6,164
6,164
6,164

7,431
7,431
7,431

8,507
8,507
8,507

Cash Flow

Dec-14F
4,362

Dec-15F
4,778

Dec-16F
4,949

0
48,687
0
52,291
2,702
0
0
1,201
3,903
6,955

0
53,956
0
58,318
3,837
0
0
1,261
5,098
6,265

0
59,554
0
64,332
4,029
0
0
1,324
5,353
6,273

0
65,856
0
70,805
4,231
0
0
1,390
5,621
6,281

2,090
7,952
16,997
14,000

2,153
8,509
16,927
17,000

2,218
9,111
17,601
17,000

2,284
9,484
18,049
17,000

265
14,265
0
31,262
24,933
0
24,933

278
17,278
0
34,205
29,211
0
29,211

292
17,292
0
34,893
34,792
0
34,792

307
17,307
0
35,356
41,070
0
41,070

Dec-13A
43.8%
47.8%
34.7%
(7.81)
11.22
31.62
19.4%
15.3%
622.8
26.04
30.3%
34.2%

Dec-14F
3.0%
6.7%
36.0%
(8.51)
13.15
33.29
19.5%
15.1%
731.7
30.25
26.2%
28.3%

Dec-15F
15.0%
16.6%
36.5%
(8.32)
15.66
33.36
19.5%
15.7%
709.2
27.31
27.0%
29.8%

Dec-16F
15.0%
13.4%
36.0%
(8.25)
18.49
31.85
19.5%
15.9%
677.9
24.33
27.7%
30.5%

Dec-13A
6,800.0
N/A
N/A
N/A
34.7%
N/A
N/A
N/A
N/A
N/A
15.6%

Dec-14F
20,786.0
N/A
N/A
N/A
36.0%
N/A
N/A
N/A
N/A
N/A
16.3%

Dec-15F
13,351.0
N/A
N/A
N/A
36.5%
N/A
N/A
N/A
N/A
N/A
15.8%

Dec-16F
13,351.0
N/A
N/A
N/A
36.0%
N/A
N/A
N/A
N/A
N/A
15.3%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
6,995

Dec-14F
8,340

Dec-15F
10,006

Dec-16F
11,458

(10,306)
374

(5,207)
460

(5,533)
484

(6,235)
508

1,149
736
(1,123)
(2,549)
(856)
0

508
(419)
(1,399)
1,825
(1,596)
0

476
(338)
(1,493)
3,118
(675)
0

233
(431)
(1,800)
3,224
(709)
0

0
250
(606)
3,436
0
0
(1,885)

0
0
(1,596)
2,310
0
0
(1,849)

0
150
(525)
8
0
0
(2,229)

0
145
(564)
8
0
0
(2,552)

(27)
435

(53)
(2,274)

(53)
(2,597)

1,854
3,405

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Dec-13A
3,604

Jan-11

Jan-12

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

SOURCE: CIMB, COMPANY REPORTS

161

Oil & Gas - IntegratedThailand


December 12, 2014

PTT
PTT TB / PTT.BK

Market Cap

Avg Daily Turnover

Free Float

US$30,016m

US$58.77m

49.0%

THB985,423m

THB1,914m

2,856 m shares

Current

THB345.0

Target

THB436.0

Prev. Target

THB436.0

Up/Downside

26.4%
Conviction|

NGV upside trumps oil downside

CIMB Analyst(s)

Thanks to PTTs diversified portfolio, its earnings growth momentum


will be stronger in 2015 driven by the lower NGV loss that should offset
the earnings downside from lower oil prices. We believe valuations will
continue to rerate on the back of the subsidy reduction which should
end by 2016.

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

Relative

-10.6

0.6

-1.0

Absolute

-11.8

-0.9

13.1

Major shareholders

12M

% held

Ministry of Finance
Vayupak Funds

52.5
15.6

Show Style "View Doc Map"

We maintain our Add rating and


SOP-based target price. We believe
PTT is one of the very few energy
companies in Thailand with earnings
downsides from lower oil prices more
than offset by the regulatory upside
from the NGV price increase. The
earnings upside from its refinery and
olefins should help offset weaker
earnings from E&P. NGV price
increases are key catalysts for the
stock.

NGV upside
The regulator Energy Policy and
Planning Office has announced
another increase in the NGV price
which is expected to reach PTTs cost
at THB16/kg. This would effectively
boost PTTs earnings by THB12bn in
2015, in line with our expectations.
We expect another upside of up to
THB7bn from the LPG price lift which
should start by 2H15 when the oil
fund balance turns to a THB15bn
surplus, the optimal level, in our view.

Oil price downside


We believe the earnings downside for
PTT from weakening oil prices should
be limited given 1) PTTs core gas
earnings (1/3 of total earnings) that
Price Close

115.1

350

105.8

300

96.4

250
20

87.0

15
Vol m

10
5
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

are linked to oil prices make up less


than 10% of its earnings via its Gas
Separation Plant 2) its earnings
upside from lower NGV loss subsidy
of THB12bn; and 3) earnings upside
from PTTs refinery associates due to
higher GRM.

Upsides from divestments


PTT is likely to see more upside in
2015, with expected capital raised up
to THB70bn, from five divestments,
namely SPRC, GPSC, BCP, Palm asset,
and gas retail stations. The biggest
upside will be the listing of the retail
station business with an initial value
of THB100bn market cap.

Valuation rerating
We believe the earnings upside from
lower NGV and LPG subsidy losses
will more than make up for the
downside from lower oil prices,
leading to a valuation rerating for PTT
over the next 12 months. This is
premised on the governments aim to
cut the subsidy and equalise tax
across the energy products. Our
SOP-based target price of THB436
already includes the upside from the
NGV price increase.

Financial Summary

Relative to SET (RHS)

400

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
2,793,833
215,683
104,608
36.63
(1.0%)
10.05
13.01
3.54%
5.78
9.92
41.9%
1.74
18.0%

Dec-13A
2,842,688
218,358
94,652
33.12
(9.6%)
11.11
12.99
3.53%
5.74
17.00
37.2%
1.54
14.7%

Dec-14F
2,861,582
226,846
105,720
37.01
11.7%
9.94
14.81
4.02%
5.47
21.73
31.8%
1.40
14.7%
0%
1.07

Dec-15F
2,971,029
257,661
122,350
42.84
15.7%
8.59
17.13
4.66%
4.70
13.96
24.8%
1.26
15.5%
0%
1.16

Dec-16F
3,149,221
261,260
128,075
44.84
4.7%
8.21
17.94
4.87%
4.33
8.32
15.1%
1.15
14.7%
0%
1.17

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

PTTThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
2,842,688
268,231
218,358
(76,315)
142,043
(20,394)
27,079
14,090
162,817
0
162,817
(47,692)

Dec-14F
2,861,582
292,662
226,846
(79,322)
147,524
(20,893)
31,867
12,951
171,448
0
171,448
(42,862)

Dec-15F
2,971,029
314,111
257,661
(86,765)
170,896
(20,644)
31,867
12,951
195,069
0
195,069
(48,767)

Dec-16F
3,149,221
321,095
261,260
(93,367)
167,893
(20,396)
37,371
19,451
204,319
0
204,319
(51,080)

115,125
(20,473)
0

128,586
(22,867)
0

146,302
(23,952)
0

153,239
(25,164)
0

94,652
94,652
94,652

105,720
105,720
105,720

122,350
122,350
122,350

128,075
128,075
128,075

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
158,903
277,590
44,172
42,479
523,144
642,437
246,078
21,252
368,811
1,278,578
42,899

Dec-14F
170,142
279,435
44,466
42,479
536,522
669,002
262,165
21,678
387,574
1,340,419
42,899

Dec-15F
203,136
290,123
46,167
44,703
584,128
699,644
278,252
21,678
453,881
1,453,455
42,899

Dec-16F
280,535
307,523
48,936
44,321
681,314
686,941
299,844
21,678
472,406
1,480,868
42,899

303,807
47,414
394,120
422,563

305,827
59,702
408,427
417,563

317,524
59,702
420,124
412,563

336,568
59,702
439,168
407,563

129,586
552,149
32,274
978,543
682,647
140,532
823,178

105,252
522,815
32,275
963,518
751,234
162,189
913,424

155,183
567,746
32,275
1,020,146
831,297
186,141
1,017,438

161,439
569,002
32,275
1,040,446
910,432
211,305
1,121,737

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-12A
215,683
(27,015)
15,419

Dec-13A
218,358
(27,079)
12,888

Dec-14F
226,846
(31,867)
(32,562)

Dec-15F
257,661
(31,867)
(24,291)

Dec-16F
261,260
(37,371)
(18,012)

64,927
18,876
(19,747)
(46,516)
221,628
(114,763)
0
10,912
(74,231)
(178,082)
62,408
0
0
(42,884)

(8,943)
8,547
(20,394)
(47,692)
135,685
(110,494)
0
15,779
(647)
(95,362)
21,547
0
0
(37,132)

21,949
22,867
(20,893)
(42,862)
143,479
(105,888)
0
15,779
1
(90,107)
(5,000)
0
0
(37,132)

20,865
23,952
(20,644)
(48,767)
176,908
(117,407)
0
15,779
1
(101,626)
0
0
0
(42,288)

31,658
25,164
(20,396)
(51,080)
191,223
(80,664)
0
15,779
0
(64,884)
0
0
0
(48,940)

(42,277)
(22,753)
20,792
105,953
63,292

(3,979)
(19,563)
20,759
61,870
60,717

0
(42,132)
11,240
48,372
74,265

0
(42,288)
32,994
75,282
95,926

0
(48,940)
77,399
126,339
146,734

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


15.1%
1.7%
0.7%
3.8%
6.0%
7.3%
1.2%
3.9%
13.6%
1.4%
7.72%
7.68%
7.93%
8.67%
8.30%
(107.0) (107.3) (101.6)
(88.3)
(59.5)
211.2
239.0
263.0
291.0
318.7
7.63
6.96
7.06
8.28
8.23
27.0%
29.3%
25.0%
25.0%
25.0%
35.5%
39.2%
40.0%
40.0%
40.0%
27.16
33.44
35.52
34.99
34.73
5.89
6.13
6.30
6.23
6.15
30.32
39.59
43.31
42.82
42.32
15.1%
12.2%
11.3%
12.7%
11.4%
13.3%
11.2%
10.8%
11.7%
10.8%

Key Drivers

12-month Forward Rolling FD P/E (x)


14.00

Oil Price (US$/bbl)


Volume Growth (%)
Ratio Of Up To Downstream (x)
Operating Cash Cost (US$/bbl)
Ratio Of High To Low Margin (x)

12.00

10.00
8.00
6.00

Dec-12A Dec-13A Dec-14F Dec-15F Dec-16F


105.0
105.0
85.0
85.0
85.0
11.0% 112.0%
4.0%
3.9%
4.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

4.00
2.00
0.00
Jan-10

Jan-11
PTT

Jan-12

Jan-13

Jan-14

PTT Exploration & Production

SOURCE: CIMB, COMPANY REPORTS

163

Oil & Gas Exp & ProdnThailand


December 12, 2014

PTT Exploration & Production


PTTEP TB / PTTE.BK

Market Cap

Avg Daily Turnover

Free Float

US$14,753m

US$25.49m

33.7%

THB484,338m

THB831.1m

3,970 m shares

Current

THB122.0

Target

THB160.0

Prev. Target

THB160.0

Up/Downside

31.1%
Conviction|

Downside priced in

CIMB Analyst(s)

We believe PTTEPs current valuation has already priced in the


US$70/bbl average oil price that should be the likely sustainable level
in 2015-16 if OPEC maintains its production at 30mblpd.

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-15.8

-24.8

-40.2

Absolute

-17.0

-26.3

Major shareholders

-26.1
% held

PTT Plc
State Street Bank and Trust Co.

65.4
1.8

Show Style "View Doc Map"

We upgrade PTTEP from Hold to Add


but keep our DCF-based target price
(WACC 11%) based on US$90/bbl oil
price as we think the weak oil price
scenario is short term, and prices will
rebound by 2H15 when the supply
glut softens. While the weak oil prices
have a significant impact on PTTEP,
its 20% share price correction in the
past three months should limit its
downside. It should perform better
than its E&P peers under this
environment given it is a gas-heavy
E&P with 13% volume growth in 2015.

Penalty likely ends


In the past three months PTTEPs
share price has plunged 20%
following the oil price drop from
US$110/bbl to the current US$64/bbl.
We believe that at the current oil price
level of US$64/bbl and PTTEPs
current share price there is a limited
downside given it is less likely for oil
prices to decline much further due to
the marginal cost of oil at
US$60-70/bbl.

Limited downside
We estimate that every US$10/bbl
drop in oil price will result in a 13%
decline in PTTEPs earnings from our
base case of US$90/bbl in 2015-16.

Price Close

104.4

150.0

87.3

130.0

70.1

110.0
30

53.0

Vol m

20
10
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range




 
Current

Target

However, we note that unlike its


regional E&P peers, PTTEP should see
a smaller downside given 1) it is a
gas-heavy E&P company with up to
70% of volume and 50% of earnings
are from gas; and 2) its gas pricing in
Thailand, which accounts for 80% of
total volume, will be linked only 1/3 to
fuel oil price while the remaining part
will linked to CPI and exchange rate.

Volume growth a cushion


In 2015, we expect PTTEP to see a
13% yoy volume growth, driven
mainly by the full-year operations of
its gas field Zawtika (300mmscfd
production volume) that started up in
2Q14.

A recovery play
We believe PTTEP will be an
attractive E&P play with more gas
earnings and volume growth to help
cushion the earnings downside from
lower oil prices. While in the shortterm, its earnings could face downside
risk from further declines in oil prices,
we think that in the medium- to longterm, its earnings growth should
continue given that oil prices should
recover, normalising at between
US$70 and US$90/bbl.

Financial Summary

Relative to SET (RHS)

170.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
212,537
149,691
57,316
15.47
11.8%
7.24
5.22
4.28%
3.31
NA
3.63%
1.48
23.3%

Dec-13A
226,346
153,259
58,626
14.77
(4.5%)
8.26
5.32
4.36%
3.38
147.3
9.49%
1.33
16.9%

Dec-14F
233,524
163,538
59,288
14.93
1.1%
8.17
5.38
4.41%
3.17
19.7
8.88%
1.21
15.5%
0%
1.00

Dec-15F
237,031
172,008
60,197
15.16
1.5%
8.05
5.46
4.47%
2.95
12.9
5.42%
1.11
14.4%
0%
1.05

Dec-16F
228,646
170,634
58,023
14.62
(3.6%)
8.35
5.26
4.31%
2.98
20.1
5.47%
1.03
12.8%
0%
1.03

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

PTT Exploration & ProductionThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
226,346
209,189
153,259
(50,351)
102,908
(5,973)
(46)
2,477
99,366
0
99,366
(40,740)

Dec-14F
233,524
221,242
163,538
(57,366)
106,171
(4,589)
(46)
2,477
104,013
0
104,013
(44,726)

Dec-15F
237,031
230,579
172,008
(64,242)
107,766
(4,589)
(46)
2,477
105,608
0
105,608
(45,411)

Dec-16F
228,646
227,133
170,634
(66,680)
103,954
(4,589)
(46)
2,477
101,796
0
101,796
(43,772)

58,626
0
0

59,288
0
0

60,197
0
0

58,023
0
0

58,626
58,626
58,626

59,288
59,288
59,288

60,197
60,197
60,197

58,023
58,023
58,023

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
50,468
2,977
12,506
33,035
98,986
404,177
933
0
140,978
546,088
7,065

Dec-14F
51,582
3,072
12,903
33,035
100,591
440,831
871
0
140,978
582,679
9,120

Dec-15F
65,472
3,118
13,096
33,035
114,721
465,449
809
0
140,977
607,235
11,176

Dec-16F
65,472
3,008
12,633
33,035
114,148
468,129
746
0
184,634
653,509
13,233

9,601
63,231
79,896
77,933

9,905
63,231
82,256
77,933

10,054
63,231
84,460
77,933

9,698
73,285
96,216
77,933

108,545
186,478
14,993
281,367
363,704
0
363,704

108,545
186,478
14,993
283,727
399,542
0
399,542

108,544
186,477
14,993
285,931
436,023
0
436,023

108,545
186,478
14,993
297,687
469,968
0
469,968

Dec-13A
6.5%
2.4%
67.7%
(8.70)
91.6
15.91
41.0%
36.0%
10.73
239
150
22.2%
23.3%

Dec-14F
3.2%
6.7%
70.0%
(8.93)
100.6
20.89
43.0%
36.0%
4.73
378
290
20.4%
22.1%

Dec-15F
1.5%
5.2%
72.6%
(5.95)
109.8
21.20
43.0%
36.0%
4.76
735
565
19.3%
20.8%

Dec-16F
(3.5%)
(0.8%)
74.6%
(6.47)
118.4
20.45
43.0%
36.0%
4.90
3,112
2,389
17.8%
18.7%

Dec-13A
105.0
3.4%
N/A
N/A
0.6

Dec-14F
93.0
12.6%
N/A
N/A
0.6

Dec-15F
90.0
6.2%
N/A
N/A
0.5

Dec-16F
90.0
-1.5%
N/A
N/A
0.5

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
153,259
46
9,853

Dec-14F
163,538
46
(187)

Dec-15F
172,008
46
(91)

Dec-16F
170,634
46
218

0
2,431
(5,973)
(40,740)
118,876
(118,470)
16
0
0
(118,454)
2,867
0
0
(23,026)

0
2,431
(4,589)
(44,726)
116,513
(94,020)
16
0
0
(94,004)
2,055
0
0
(23,450)

0
2,431
(4,589)
(45,411)
124,393
(88,860)
16
0
0
(88,844)
2,056
0
0
(23,715)

8,822
46
(4,589)
(43,772)
131,404
(69,360)
16
0
0
(69,344)
(37,982)
0
0
(24,079)

0
(20,159)
(19,737)
3,289
6,888

0
(21,395)
1,114
24,565
27,592

0
(21,659)
13,890
37,605
40,632

0
(62,060)
(0)
24,079
67,143

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


14.00

Oil Price (US$/bbl)


Volume Growth (%)
Ratio Of Up To Downstream (x)
Operating Cash Cost (US$/bbl)
Ratio Of High To Low Margin (x)

12.00

10.00
8.00
6.00
4.00
2.00
0.00
Jan-10

Jan-11
PTT

Jan-12

Jan-13

Jan-14

PTT Exploration & Production

SOURCE: CIMB, COMPANY REPORTS

165

PetrochemicalThailand
December 12, 2014

PTT Global Chemical


PTTGC TB / PTTG.BK

Market Cap

Avg Daily Turnover

Free Float

US$7,657m

US$20.72m

30.0%

THB251,368m

THB675.5m

4,505 m shares

Current

THB55.75

Target

THB75.00

Prev. Target

THB70.00

Up/Downside

34.5%
Conviction|

Mixed winds ahead

CIMB Analyst(s)

PTTGC is facing a mix of both head and tailwinds. Its earnings growth
is driven by the tailwinds of its volume growth post GSP#5 shutdown
and the rising olefin margin on industry upcycle in 2015-16. This will
be partly offset by the headwinds from weakening oil prices given its
gas feedstock cost will decline slower than the oil-driven product price.

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-8.9

-10.0

-43.3

Absolute

-10.1

-11.5

-29.2

Major shareholders

% held

PTT Plc

49.0

Show Style "View Doc Map"

PTTGC remains a good growth play in


the Thai petrochemical sector thanks
to its volume growth from higher gas
feedstock and the margin expansion
from olefin upcycle that should more
than offset the negative impact from
lower oil prices. We maintain Add and
tweak up our target price, based on 6x
CY16 EV/EBITDA as we roll forward
our valuation to 2016 and lower our
valuation multiple from 7x to reflect
the downside risk from oil prices.

Refinery unit to improve in


2015

Olefin supports growth

Downside for LPG subsides

We expect PTTGC to see a healthy


margin in 2015-16 thanks to its olefin
margins that should continue to rise
despite the negative impact from the
oil price decline. As a gas-based olefin
producer, PTTGCs gas feedstock price
will decline slower than oil-driven
product prices. However its timely
olefin volume growth of 20% yoy and
higher margin for olefin on the tight
industry outlook should be the key
driver to help offset the weak earnings
from aromatics and refinery units.

Vol m

Price Close

121.0

78.0

109.3

73.0

97.7

68.0

86.0

63.0

74.3

58.0

62.7

53.0
50
40
30
20
10

51.0

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

We believe that after the loss in 2014


due to the large inventory loss due to
the sharp oil price drop, PTTGC
should see its refinery earnings grow
in 2015, driven by higher GRM on the
back of lower crude premium costs,
lower fuel loss, and lower interest
expenses on its working capital. These
together could boost its GRM by
US$2-4/bbl.
Thanks to the sharp oil price decline
that led to much lower LPG prices of
below US$600/t, the risk for PTTGC
from a potential LPG feedstock price
increase is now much reduced. We
estimate that even with the full impact
of an LPG price increase to the market
price of US$600/t, PTTGC will see a
mere 2% earnings downside.

Pain, then gain


While in the short-term, PTTGCs
earnings will be under pressure from
inventory loss, its earnings growth
will improve once oil prices stabilise
in 2015.

Financial Summary

Relative to SET (RHS)

83.0

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
565,617
53,930
34,001
6.65
(9.2%)
8.38
3.40
6.10%
6.31
61.89
34.0%
1.13
14.2%

Dec-13A
552,881
54,914
33,277
7.29
9.5%
7.65
3.33
5.97%
5.95
15.52
33.4%
1.05
14.2%

Dec-14F
534,553
53,906
31,767
7.05
(3.2%)
7.91
3.18
5.70%
5.78
9.29
26.5%
1.01
13.0%
0%
1.14

Dec-15F
545,413
56,727
35,988
7.99
13.3%
6.98
3.60
6.45%
5.18
8.61
18.8%
0.95
14.0%
0%
1.14

Dec-16F
539,239
53,739
41,402
9.19
15.0%
6.07
4.14
7.43%
5.12
6.76
11.4%
0.90
15.2%
0%
1.21

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

PTT Global ChemicalThailand


December 12, 2014

Profit & Loss

Balance Sheet

(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
552,881
68,945
54,914
(16,737)
38,177
(4,525)
(78)
341
33,916
902
34,818
(1,976)

Dec-14F
534,553
63,951
53,906
(17,060)
36,845
(3,964)
535
2,359
35,775
0
35,775
(3,638)

Dec-15F
545,413
66,968
56,727
(17,903)
38,824
(3,826)
535
4,718
40,251
0
40,251
(3,892)

Dec-16F
539,239
63,775
53,739
(18,745)
34,993
(3,691)
535
14,153
45,990
0
45,990
(4,218)

32,841
436
0

32,138
(371)
0

36,359
(371)
0

41,773
(371)
0

33,277
32,823
32,823

31,767
31,767
31,767

35,988
35,988
35,988

41,402
41,402
41,402

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
21,244
58,388
50,238
30,644
160,513
231,249
13,322
0
27,278
271,848
22,064

Dec-14F
26,665
56,452
48,573
30,644
162,334
229,189
14,568
0
27,278
271,034
22,064

Dec-15F
34,920
57,599
49,559
30,644
172,723
226,286
15,814
0
27,278
269,378
22,064

Dec-16F
44,724
56,947
48,998
30,644
181,313
222,540
17,060
0
27,278
266,878
22,064

53,455
7,688
83,207
81,103

51,683
7,688
81,434
72,605

52,733
7,688
82,484
64,109

52,136
7,688
81,888
55,615

22,819
103,922
0
187,128
238,503
6,731
245,233

22,819
95,424
0
176,858
249,408
7,102
256,510

22,819
86,928
0
169,412
265,216
7,473
272,688

22,819
78,434
0
160,322
280,026
7,844
287,870

Dec-13A
(2.3%)
1.82%
9.9%
(18.18)
52.94
6.27
5.7%
46.3%
36.68
34.42
38.02
7.63%
11.4%

Dec-14F
(3.3%)
(1.84%)
10.1%
(15.10)
55.36
6.67
10.2%
45.0%
39.21
38.32
40.77
7.66%
11.0%

Dec-15F
2.0%
5.23%
10.4%
(11.38)
58.87
7.20
9.7%
45.0%
38.16
37.43
39.83
8.17%
11.4%

Dec-16F
(1.1%)
(5.27%)
10.0%
(7.32)
62.16
6.66
9.2%
45.0%
38.87
37.93
40.36
7.40%
10.1%

Dec-13A
110.0
0.0%
N/A
N/A
N/A

Dec-14F
107.0
0.0%
N/A
N/A
N/A

Dec-15F
105.0
0.0%
N/A
N/A
N/A

Dec-16F
100.0
0.0%
N/A
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
54,914
78
(7,340)

Dec-14F
53,906
(535)
1,829

Dec-15F
56,727
(535)
(1,084)

Dec-16F
53,739
(535)
616

(729)
3,889
(4,525)
(1,976)
44,312
(15,000)
289
(1,000)
(3,916)
(19,627)
(8,499)
0
0
(21,188)

0
0
(3,964)
(3,638)
47,598
(15,000)
289
(1,000)
3,645
(12,066)
(8,498)
0
0
(20,861)

(0)
2,359
(3,826)
(3,892)
49,749
(15,000)
289
(1,000)
3,645
(12,066)
(8,496)
0
0
(20,180)

(1)
11,795
(3,691)
(4,218)
57,706
(15,000)
289
(1,000)
3,645
(12,066)
(8,494)
0
0
(26,591)

(4,598)
(34,285)
(9,600)
16,186
30,769

(751)
(30,110)
5,421
27,034
41,059

(751)
(29,427)
8,255
29,187
43,074

(751)
(35,836)
9,803
37,145
50,896

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.00

45.00

Oil Price (US$/bbl)


Volume Growth (%)
Ratio Of Up To Downstream (x)
Operating Cash Cost (US$/bbl)
Ratio Of High To Low Margin (x)

40.00
35.00

30.00
25.00
20.00
15.00
10.00
5.00
0.00
Jan-10

Jan-11

Jan-12

Indorama Ventures

Jan-13

Jan-14

PTT Global Chemical

SOURCE: CIMB, COMPANY REPORTS

167

Property DevelopmentThailand
December 12, 2014

Quality Houses
QH TB / QH.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,097m

US$3.59m

41.0%

THB36,000m

THB116.7m

9,184 m shares

Current

THB3.92

Target

THB5.53

Prev. Target

THB5.04

Up/Downside

41.2%
Conviction|

Promising growth outlook

CIMB Analyst(s)

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-5.9

-4.3

21.1

Absolute

-7.1

-5.8

Major shareholders

35.2
% held

Land and Houses


GIC
Thai NVDR

24.8
10.8
7.1

Show Style "View Doc Map"

We maintain an Add rating on QH with a higher target price of


THB5.53 as we roll over our valuation to 10x CY16 P/E (on par with its
five-year mean). We continue to like QH for its strong earnings
visibility, backed by its solid backlog and investment income and
undemanding valuation.
We raise FY14-16 EPS estimates by
2-3.8%
to
reflect
its
9M14
performance, which came in broadly
in line with our expectation. QH
remains upbeat on its outlook in FY15
and targets growth of 20% for revenue,
while presales are expected to expand
at a slower pace of 10-15%. Still,
upside potential for FY15 is possible
given its higher guidance for both
presales and revenues. Potential
catalysts include continued buoyant
presales and margin expansion. (keep
abstract to 12 lines max. remove
notice at top. add peers to P/E band
on p.2. changes to TP & EPS should be
done in a separate note)

Rising growth outlook


We expect QH to report EPS growth
of 10% in FY14 and accelerate to
17-20% in FY15-16. FY15s growth
visibility is firmly backed by a solid
condo backlog, which suggests a 25%
lock-in rate. We note that QHs sales
revenue mix comprises 20-30% condo
and 70-30% SDH/TH. This 25%
lock-in rate suggests that its condo
revenue is entirely secured for FY15;
hence its strong earnings visibility.
We expect upward revisions in EPS by
Price Close

149.0

4.10

137.0

3.60

125.0

3.10

113.0

2.60

101.0

2.10
150

89.0

Vol m

100
50
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range


Current

Target

the market; our FY14 EPS is 10%


above consensus.

Upbeat targets
QH remains optimistic that its FY15
presales and revenues will grow by
20% from the FY14 presales target of
THB21.4bn and sales revenue target
of THB20bn. The company plans to
grow its presence more in provincial
markets, with an expected upcountry
contribution of 20% in FY15 from 15%
in FY14. The higher-end segment mix
should remain at 20% and the
majority is likely to come from the
mid- to lower-end segment. The
condo mix should form 20-25% and
SDH and TH should make up the
remainder.

Attractive valuation
Stay invested for the companys
improving
earnings
outlook,
expanding ROE and attractive
valuations on both a P/E and RNAV
of THB5.4 (more than a 30% discount
to RNAV/share). Its dividend yield is
also another return accretion for
investing in QH.

Financial Summary

Relative to SET (RHS)

4.60

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
13,077
1,632
2,450
0.27
187%
14.69
0.13
3.40%
13.28
39.28
131%
2.28
16.9%

Dec-13A
19,699
3,225
3,307
0.36
35%
10.89
0.18
4.59%
8.26
22.28
108%
2.08
20.0%

Dec-14F
21,275
3,853
3,638
0.40
10%
9.90
0.20
5.05%
7.82
36.94
116%
1.87
19.9%
1.72%
1.10

Dec-15F
24,400
4,620
4,349
0.47
20%
8.28
0.24
6.04%
6.38
12.42
88%
1.65
21.2%
3.35%
1.16

Dec-16F
27,988
5,350
5,083
0.55
17%
7.08
0.28
7.06%
5.41
27.26
71%
1.46
21.9%
3.85%
1.19

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Quality HousesThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
19,699
6,387
3,225
(232)
2,993
(228)
943
235
7,337
0
3,943
(636)

Dec-14F
21,275
7,233
3,853
(236)
3,617
(284)
1,000
215
8,164
0
4,547
(909)

Dec-15F
24,400
8,418
4,620
(228)
4,392
(281)
1,150
175
9,462
0
5,436
(1,087)

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
27,988
9,656
5,350
(228)
5,122
(266)
1,323
175
10,887
0
6,353
(1,271)

3,307
0
0

3,638
0
0

4,349
0
0

5,083
0
0

3,307
3,307
3,307

3,638
3,638
3,638

4,349
4,349
4,349

5,083
5,083
5,083

Cash Flow

Dec-14F
1,268

Dec-15F
1,665

Dec-16F
1,555

91
29,138
943
31,803
854
8,146
848
0
9,848
4,308

96
36,729
20
38,112
896
8,114
0
0
9,010
6,500

101
36,065
20
37,851
941
8,128
0
0
9,069
5,500

106
37,391
21
39,072
988
8,142
0
0
9,130
5,000

882
2,290
7,481
16,012

927
2,405
9,831
17,200

973
2,525
8,998
15,300

1,022
2,651
8,674
14,000

882
16,894
0
24,374
17,277
0
17,277

830
18,030
0
27,861
19,262
0
19,262

830
16,130
0
25,128
21,792
0
21,792

830
14,830
0
23,504
24,700
0
24,700

Dec-13A
50.6%
55.0%
33.6%
(2.04)
1.88
28.01
16.1%
22.2%
1.66
805
23.13
14.8%
16.9%

Dec-14F
8.0%
12.9%
35.1%
(2.44)
2.10
25.43
20.0%
22.6%
1.60
856
23.51
17.6%
18.0%

Dec-15F
14.7%
15.8%
35.4%
(2.08)
2.37
29.98
20.0%
23.4%
1.47
831
21.69
17.1%
19.7%

Dec-16F
14.7%
14.3%
35.3%
(1.90)
2.69
36.30
20.0%
23.8%
1.35
733
19.91
20.1%
22.4%

Dec-13A
5,300.0
N/A
N/A
N/A
32.4%
N/A
N/A
N/A
N/A
N/A
17.2%

Dec-14F
4,800.0
N/A
N/A
N/A
34.0%
N/A
N/A
N/A
N/A
N/A
17.0%

Dec-15F
4,200.0
N/A
N/A
N/A
34.5%
N/A
N/A
N/A
N/A
N/A
16.5%

Dec-16F
N/A
N/A
N/A
34.5%
N/A
N/A
N/A
N/A
N/A
16.2%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
3,225

Dec-14F
3,853

Dec-15F
4,620

Dec-16F
5,350

548
232

(7,551)
236

705
228

(1,282)
228

668
(228)
(727)
3,486
(43)
0

1,807
(284)
(636)
(2,811)
(45)
0

1,268
(281)
(918)
5,394
(47)
0

3
(266)
(1,087)
2,718
(49)
0

0
217
174
(2,044)
0

0
451
406
3,380
0

0
451
404
(2,900)
0

0
452
403
(1,800)
0

(1,654)

(1,819)

(2,174)

(2,541)

18
(3,679)

482
2,043

(327)
(5,402)

1,112
(3,230)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Dec-13A
1,630

Jan-11

Jan-12

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

SOURCE: CIMB, COMPANY REPORTS

169

IPPThailand
December 12, 2014

Ratchaburi Electricity
RATCH TB / RATC.BK

Market Cap

Avg Daily Turnover

Free Float

US$2,705m

US$1.70m

38.4%

THB88,813m

THB55.26m

1,450 m shares

Current

THB61.25

Target

THB69.00

Prev. Target

THB69.00

Up/Downside

12.7%
Conviction|

Dont overlook this growth play

CIMB Analyst(s)

RATCHs earnings growth could start to accelerate in FY15 when the


earnings from its 40%-stake coal-fired Hongsa power plant start to
kick in. Additional growth could come from the coal-fired power plant
bidding in Thailand and M&A overseas, which should be supported by
its strong balance sheet.

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

Relative

0.0

4.4

6.0

Absolute

-1.2

2.9

20.1

Major shareholders

12M

% held

EGAT
Nortrust Nominees Ltd
Littledown Nominees Ltd

45.0
9.1
6.5

Show Style "View Doc Map"

After a long period of a stagnant and


defensive growth strategy, we believe
that it is entering a more aggressive
growth direction from not only its
green field project, Hongsa, but also
from the M&A upside that is targeted
by the company. We think it is
well-positioned to see a strong growth
momentum in FY15-16. We maintain
an Add rating and DCF-based target
price of THB69 (WACC: 6.3%).
Potential catalysts are three phases of
the 1,800MW plant start full
operating in 2016.

Potential growth outlook


We believe that over the next 12
months, RATCH will be well
positioned to gain positive earnings
momentum from the better utilisation
of its existing power plants and the
additional earnings from Hongsa,
which we project to contribute
THB789m in FY15 and THB2.4bn in
FY16 after all three phases of the
1,800MW plant start full operation.

Strong in both coal- and


gas-fired power plants

largest in Thailand, we believe that it


could stand as a key contender for the
new coal-fired power plant, thanks to
its experience given its 40% stake in
the coal-fired power plant in Laos.

Solid shareholder structure


Thanks to the 45% stake owned by the
Electricity Generation Authority of
Thailand (EGAT), RATCH is well
positioned to win any new power
plants, not only in Thailand but also
in neighbouring countries where
EGAT aims to expand its footprint.
EGAT is Thailands only state-owned
power generation company and the
sole buyer of all power in Thailand.

Buy ahead of growth


We believe that RATCHs share price
will continue to re-rate over the next
12 months, driven by the earnings
growth momentum and the upside
from the upcoming IPP bidding.
RATCH could stand a chance to win
both as a gas- or coal-fired IPP given
its proven experience in large gas- and
coal-fired power plants in Thailand,
Laos and Australia.

While RATCHs existing strength may


lie in its large portfolio of gas-fired
power plants of over 5,000MW, the

Vol m

Price Close

Financial Summary

Relative to SET (RHS)

64.0

109.0

59.0

104.5

54.0

100.0

49.0

95.5

44.0
5
4
3
2
1

91.0

Dec-13

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range

 

 
Current

Target

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
55,591
10,302
7,726
3.68
9.8%
16.69
2.27
3.69%
10.46
49.94
33.3%
1.68
10.6%

Dec-13A
50,850
9,484
6,187
3.50
(5.1%)
17.59
2.27
3.69%
10.87
NA
23.5%
1.63
9.4%

Dec-14F
56,382
11,320
6,780
4.68
33.7%
13.15
2.27
3.69%
8.51
9.02
10.5%
1.53
12.0%
0%
0.99

Dec-15F
55,681
10,655
7,369
5.08
8.7%
12.10
2.40
3.90%
8.41
8.91
(1.1%)
1.43
12.2%
0%
1.07

Dec-16F
55,387
11,285
9,436
6.51
28.0%
9.45
2.80
4.55%
7.21
7.45
(13.2%)
1.31
14.5%
0%
1.23

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Ratchaburi ElectricityThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
50,850
11,246
9,484
(3,724)
5,761
(1,222)
958
1,978
7,475
0
7,475
(1,294)

Dec-14F
56,382
13,274
11,320
(4,387)
6,934
(1,164)
1,417
1,402
8,588
0
8,588
(1,665)

Dec-15F
55,681
12,585
10,655
(4,387)
6,269
(1,028)
2,331
1,542
9,114
0
9,114
(1,575)

Dec-16F
55,387
13,204
11,285
(4,387)
6,898
(889)
3,688
1,696
11,393
0
11,393
(1,788)

6,182
5
0

6,924
(143)
0

7,539
(170)
0

9,606
(170)
0

6,187
5,071
5,071

6,780
6,780
6,780

7,369
7,369
7,369

9,436
9,436
9,436

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
9,404
8,885
2,541
68
20,900
41,846
18,245
5,732
2,181
68,004
14,736

Dec-14F
16,237
8,885
2,766
76
27,964
39,149
18,245
5,732
2,181
65,307
14,736

Dec-15F
23,174
8,885
2,766
75
34,900
36,453
18,245
5,732
2,181
62,611
14,736

Dec-16F
31,574
8,885
2,707
75
43,241
33,766
18,245
5,732
2,181
59,924
14,736

7,757
458
22,951
7,729

8,444
508
23,687
7,729

8,442
501
23,679
7,729

8,263
499
23,497
7,729

2,684
10,413
0
33,364
54,701
838
55,539

2,684
10,413
0
34,101
58,190
981
59,171

2,684
10,413
0
34,092
62,268
1,151
63,418

2,684
10,413
0
33,910
67,934
1,320
69,254

Dec-13A
(8.5%)
(7.9%)
18.7%
(9.01)
37.72
3.53
17.3%
53.2%
47.64
21.73
72.24
10.1%
7.55%

Dec-14F
10.9%
19.4%
20.1%
(4.30)
40.13
5.13
19.4%
48.5%
57.52
22.47
68.59
13.1%
8.92%

Dec-15F
(1.2%)
(5.9%)
19.1%
0.49
42.94
4.64
17.3%
47.2%
58.24
23.43
71.50
12.6%
7.87%

Dec-16F
(0.5%)
5.9%
20.4%
6.28
46.85
5.10
15.7%
43.0%
58.72
23.74
72.47
14.6%
8.29%

Dec-13A
22,693.7
5,600.9
N/A
N/A
N/A

Dec-14F
22,122.1
5,600.9
N/A
N/A
N/A

Dec-15F
22,595.2
5,660.9
N/A
N/A
N/A

Dec-16F
27,798.6
6,320.9
N/A
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
9,484
958
(4,492)

Dec-14F
11,320
1,417
504

Dec-15F
10,655
2,331
(7)

Dec-16F
11,285
3,688
(123)

9,080
0
(1,222)
(1,559)
12,250
(8,106)
0
(724)
4,763
(4,067)
(9,338)
0
0
(3,260)

5,378
0
(1,164)
(1,907)
15,548
(7,083)
0
0
1,417
(5,666)
0
0
0
(3,292)

4,604
0
(1,028)
(1,797)
14,759
(7,083)
0
0
2,331
(4,752)
0
0
0
(3,292)

3,382
0
(889)
(1,984)
15,359
(7,074)
0
0
3,688
(3,386)
0
0
0
(3,770)

(114)
(12,711)
(4,528)
(1,154)
9,817

242
(3,049)
6,832
9,882
11,234

222
(3,070)
6,937
10,007
11,359

196
(3,574)
8,400
11,974
13,326

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

12-month Forward Rolling FD P/E (x)

Key Drivers

25.0

Power Despatched (GWh)


Capacity (MW)
Average Capacity Utilisation (%)
Avg tariff/ASP per kwh (% chg)
Fuel Cost Per Kwh (% Change)

20.0

15.0
10.0
5.0
0.0
Jan-10

Jan-11
Glow Energy

Jan-12

Jan-13

Jan-14

Ratchaburi Electricity

SOURCE: CIMB, COMPANY REPORTS

171

RetailThailand
December 12, 2014

Robinson Department Store


ROBINS TB / ROBI.BK

Market Cap

Avg Daily Turnover

Free Float

US$1,489m

US$2.69m

38.0%

THB48,869m

THB87.61m

1,111 m shares

Current

THB44.00

Target

THB66.00

Prev. Target

THB66.00

Up/Downside

50.0%
Conviction|

Riding the urbanisation wave

CIMB Analyst(s)

With weak domestic demand resulting in lower sales, ROBINS


generated flat sales growth in 2014 despite its aggressive expansion.
We still believe in its long-term growth story as it is poised to benefit
from the recovery in domestic demand and increasing urbanisation.

Kasem PRUNRATANAMALA, CFA


T (66) 2 657 9221
E kasem.prunratanamala@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-9.9

-20.3

-31.1

Absolute

-11.1

-21.8

Major shareholders

-17.0
% held

Central Group & Chirathivat Family


Credit Suisse AG, Singapore Branch
Thai NDVDR

62.0
3.9
3.2

Show Style "View Doc Map"

We keep our EPS estimates, Add call


and DCF-based target price of THB66
(WACC 10.5%, LTG 2%). We believe
that the worst is now behind ROBINS
and it is poised to generate long-term
earnings growth, driven by two factors:
1) growth of its rental income base,
and 2) potential upside from a pick-up
in sales as domestic demand recovers.

in Thailand p.a. and 2 stores in


Vietnam p.a. for the next 3 years.

Solid business model and


balance sheet

ROBINS operates on a negative cash


cycle as 80% of its sales are on
consignment. Its balance sheet seems
solid with minimal debt, as cashflow
generated from operations (estimated
at THB5.6bn for 2015) is sufficient to
Lifestyle Center format
finance its capex, estimated at
improves earnings quality
By end-2014, ROBINS will have 39 THB4.5bn-5bn for 2015. Thanks to
department stores in Thailand (28 in the adoption of the Lifestyle Center
upcountry) and two stores in Vietnam. format, new stores also generate
Out of these, only 11 are Lifestyle positive cashflow from day one and
Centers. Thanks to its continued positive EBIT in the first year of
expansion using the Lifestyle Center operations.
format, we expect its rental income to ROBINS still our top pick
grow rapidly. This will allow it to build ROBINS remains our top pick. It has
a larger recurring income base been a sector laggard in 2014 and this
(estimated at THB90m-100m per can present opportunities to buy
Lifestyle Center per year), which will ROBINS at a bargain. Its long-term
help reduce earnings volatility during fundamentals remain unchanged and
sales slowdowns and provide a boost we believe that ROBINS is poised to
to ROBINSs earnings once sales pick generate long-term sales growth,
up.
thanks to its leading position in the
upcountry department store market
Expansion plan still on
Robins plans to add five stores in 2015, where there is still low penetration
of which four stores will be Lifestyle and ample room to grow as provinces
Centers, and two more new stores in become increasingly urbanised.
Vietnam. With its plan to add 5 stores

Price Close

Financial Summary

Relative to SET (RHS)

62.0

112.0

57.0

100.8

52.0

89.5

47.0

78.3

42.0
6

67.0

Vol m

4
2
Dec-13

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
23,460
3,426
1,658
1.49
14.1%
29.47
0.90
2.05%
13.29
28.82
(27.8%)
4.73
16.8%

Dec-13A
26,359
3,705
1,986
1.79
19.8%
24.61
0.90
2.05%
12.51
NA
(15.7%)
4.31
18.3%

Dec-14F
28,591
4,345
1,972
1.78
(0.7%)
24.79
0.89
2.02%
11.08
NA
0.2%
3.96
16.7%
0%
0.98

Dec-15F
34,362
5,886
2,667
2.40
35.3%
18.32
1.20
2.73%
8.31
44.28
5.1%
3.58
20.5%
0%
1.08

Dec-16F
41,061
7,558
3,548
3.19
33.0%
13.77
1.60
3.63%
6.45
23.26
2.5%
3.17
24.4%
0%
1.18

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Robinson Department StoreThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
26,359
7,972
3,705
-1,418
2,286
37
358
0
2,682
0
2,682
-456

Dec-14F
28,591
8,999
4,345
-1,927
2,418
6
358
0
2,783
0
2,783
-557

Dec-15F
34,362
11,038
5,886
-2,427
3,459
-29
358
0
3,789
0
3,789
-758

Dec-16F
41,061
13,267
7,558
-2,810
4,749
-48
358
0
5,059
0
5,059
-1,012

2,226
-241

2,226
-254

3,031
-364

4,048
-500

1,986
1,986
1,986

1,972
1,972
1,972

2,667
2,667
2,667

3,548
3,548
3,548

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
1,882
739
1,667
522
4,810
9,132
1,299
2,767
822
14,020
0
0
4,407
2,222
6,629
0

Dec-14F
470
789
1,665
304
3,228
13,017
1,657
2,555
822
18,051
500
0
5,116
2,222
7,838
0

Dec-15F
240
942
1,982
304
3,469
15,786
2,015
2,359
822
20,983
1,000
0
6,090
2,222
9,312
0

Dec-16F
568
1,127
2,362
304
4,361
18,158
2,374
2,178
822
23,531
1,000
0
7,258
2,222
10,480
0

188
188
0
6,818
11,343
670
12,013

188
188
0
8,026
12,329
924
13,253

188
188
0
9,501
13,662
1,288
14,950

188
188
0
10,668
15,436
1,788
17,224

Dec-13A
12.4%
8.1%
14.1%
1.69
10.21
N/A
17.0%
50.3%
9.30
29.71
86.90
24.6%
20.3%

Dec-14F
8.5%
17.3%
15.2%
-0.03
11.10
193.4
20.0%
50.0%
9.76
31.04
88.71
21.4%
18.9%

Dec-15F
20.2%
35.5%
17.1%
-0.68
12.30
102.5
20.0%
50.0%
9.20
28.54
87.69
23.4%
23.3%

Dec-16F
19.5%
28.4%
18.4%
-0.39
13.90
95.0
20.0%
50.0%
9.22
28.60
87.89
27.4%
27.8%

Dec-13A
N/A
N/A
34
2.9%
N/A
N/A
N/A
N/A

Dec-14F
N/A
N/A
41
-4.0%
N/A
N/A
N/A
N/A

Dec-15F
N/A
N/A
48
4.0%
N/A
N/A
N/A
N/A

Dec-16F
N/A
N/A
55
6.0%
N/A
N/A
N/A
N/A

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
3,705

Dec-14F
4,345

Dec-15F
5,886

Dec-16F
7,558

121

661

504

602

37
-456
3,407
-4,266
0
0
808
-3,457
0
0

6
-557
4,456
-5,600
0
0
219
-5,381
500
0

-29
-758
5,604
-5,000
0
0
0
-5,000
500
0

-48
-1,012
7,101
-5,000
0
0
0
-5,000
0
0

-1,000

-986

-1,333

-1,774

-91
-1,090
-1,141
-51
-51

0
-486
-1,412
-426
-913

0
-833
-230
1,104
637

0
-1,774
327
2,101
2,151

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


50.0

45.0

ASP (% chg, main prod./serv.)


Unit sales grth (%, main prod./serv.)
No. of POS (main prod/serv)
SSS grth (%, main prod/serv)
ASP (% chg, 2ndary prod./serv.)
Unit sales grth (%,2ndary prod/serv)
No. of POS (2ndary prod/serv)
SSS grth (%, 2ndary prrod/serv)

40.0
35.0

30.0
25.0
20.0
15.0
10.0
5.0
0.0
Jan-10

Jan-11
Big C Supercentre

Jan-12
CP All

Jan-13

Jan-14
Robinson Department Store

SOURCE: CIMB, COMPANY REPORTS

173

Telco - MobileThailand
December 12, 2014

Samart I-Mobile
SIM TB / SIM.BK

Market Cap

Avg Daily Turnover

Free Float

US$461.1m

US$1.37m

55.5%

THB15,137m

THB44.34m

4,373 m shares

Current

THB3.44

Target

THB4.60

Prev. Target

THB4.60

Up/Downside

33.7%
Conviction|

Regaining strength in 2015

CIMB Analyst(s)

2014s earnings were driven by solid smartphone sales growth and the
debut of its DTV Mobile. Although sales fell in 3Q14, they are likely to
recover in 4Q14/2015, supported by the launch of new handset models
that satisfy consumer needs and an expected large order by operators.

Kitichan SIRISUKARCHA, CFP


T (66) 2 657 9232
E kitichan.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

0.0

-10.8

-8.6

Absolute

-1.2

-12.3

5.5

Major shareholders

% held

Samart Corp Pcl


Bualuang Infra Rmf
Bualuang Siripol

70.0
0.9
0.9

Show Style "View Doc Map"

We maintain our Add call and target


price of THB4.60, based on 18.2x
FY15 P/E (1 s.d. above the telecom
sectors 5-year mean). We believe
SIM will be attractive over the next
1-2 years, driven by the growing
smartphone market and potential of
becoming a handset manufacturer
for Thailands top mobile operators,
plus additional benefits as an STB
distributor.

Continuing growth
SIMs revenue and profit jumped
more than 400% yoy in 2013 and
around 25% in 2014, thanks to the
transition from 2G to 3G in Thailand.
Although
this
abnormally-high
growth rate should normalise in
2014 (13% CAGR), we expect another
push from the soon-to-be fully
operational 4G as this transition
should boost smartphone demand in
the upcountry. And with the market
gearing towards lower-cost devices,
SIMs attractively-priced and quality
products, coupled with better
services, should help it capture a
larger market share.

Vol m

Price Close

110.5

3.50

98.0

3.00

85.5

2.50
500
400
300
200
100

73.0

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

Driven by DTV mobile


SIMs growth in 4Q14-2015 will also
be driven by the growing sales of its
DTV Mobile, especially after the
commencement of full operations of
the new DTTV platform in Thailand
in Sep 2014. This should help restore
revenue growth to its former level by
4Q14 onwards. Moreover, SIM will
book revenue from another big order
of more than 500,000 handsets from
DTAC in 4Q14. Also, as the company
might be receiving more special
orders of around 1m handsets next
year, SIM targets to sell 5.5m units in
2015 (vs. 4.5m handsets in 2014).

Set-top box distributor


SAMART expects to sell 1.5m-2m
STBs per year in 2014-2015 (8-10% of
total market share). With SIM as one
of its STB distributors, accounting for
around 20-30% of its STB sales (at
10% net margin), this target
translates to THB300m in revenue
and THB30m in net profit for SIM.

Still attractive
We like SIM for its leading position
in the Thai mobile market, its solid
financials, and growth potential from
overseas expansion, which should
drive a 13% net profit CAGR in 15-17

Financial Summary

Relative to SET (RHS)

4.00

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Operating EBITDA Margin
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
6,940
464
6.7%
161
0.04
73%
81.32
0.01
0.29%
35.21
26.01
57.9%
7.4%

Dec-13A
10,239
1,082
10.6%
807
0.19
354%
17.90
0.07
2.17%
15.64
NA
61.4%
29.2%

Dec-14F
12,935
1,299
10.0%
1,007
0.24
23%
14.58
0.09
2.67%
13.07
23.09
49.0%
30.0%
0%
0.99

Dec-15F
14,195
1,410
9.9%
1,109
0.26
10%
13.30
0.11
3.33%
11.89
32.46
36.2%
28.0%
0%
0.89

Dec-16F
15,825
1,551
9.8%
1,270
0.30
14%
11.66
0.13
3.67%
10.83
11.89
31.6%
27.5%
0%
0.84

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Samart I-MobileThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
10,239
2,744
1,082
(198)
884
(130)
0
62
843

Dec-14F
12,935
3,240
1,299
(200)
1,099
(143)
0
62
1,046

Dec-15F
14,195
3,496
1,410
(203)
1,207
(147)
0
62
1,149

Dec-16F
15,825
3,829
1,551
(205)
1,345
(123)
0
62
1,311

815
(5)

1,018
(6)

1,121
(6)

1,284
(7)

811
(4)

1,013
(5)

1,115
(6)

1,276
(7)

807
834
834

1,007
1,035
1,035

1,109
1,136
1,136

1,270
1,297
1,297

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Cash Flow

Dec-13A
411
4,142
1,670
9
6,232
615
278
43
114
1,050
2,359
1
1,608
86
4,055
7
33
40
0
4,095
3,148
40
3,188

Dec-14F
509
4,873
1,521
9
6,913
627
278
43
102
1,050
2,359
7
1,681
84
4,131
5

Dec-15F
771
5,348
1,679
9
7,807
635
278
43
29
985
2,359
5
1,855
85
4,304
4

Dec-16F
743
6,054
1,882
9
8,689
641
278
43
38
1,000
2,359
4
2,080
85
4,527
3

29
33
0
4,164
3,755
44
3,798

75
79
0
4,383
4,360
49
4,409

30
32
0
4,560
5,075
54
5,129

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
1,082

Dec-14F
1,299

Dec-15F
1,410

Dec-16F
1,551

(459)

(425)

(637)

(631)
(78)
(5)
(90)
(184)
(32)
(94)
148
(162)

4
(90)
(6)
782
(184)
57
0
(2)
(129)

4
(94)
(6)
676
(184)
(27)
0
1
(210)

122

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

3
(71)
(7)
1,483
(184)
(27)
0
(1)
(212)

Dec-13A
47.5%
133%
10.6%
(0.45)
0.72
11.71
0.57%
39.2%
128.0
57.27
63.29
23.0%
18.3%

Dec-14F
26.3%
20%
10.0%
(0.42)
0.85
12.49
0.57%
39.0%
118.4
60.08
61.92
22.9%
19.2%

Dec-15F
9.7%
8%
9.9%
(0.36)
0.99
13.08
0.57%
44.3%
122.3
54.59
60.32
22.7%
19.1%

Dec-16F
11.5%
10%
9.8%
(0.37)
1.15
19.39
0.57%
42.8%
122.7
54.32
60.03
23.5%
19.2%

Dec-13A
4.12
N/A
N/A
49.3
N/A
N/A
N/A

Dec-14F
0.45
3.60
N/A
N/A
80.7
N/A
N/A
N/A

Dec-15F
0.90
4.50
N/A
N/A
80.0
N/A
N/A
N/A

Dec-16F
1.17
4.95
N/A
N/A
81.9
N/A
N/A
N/A

(327)

(403)

(504)

(555)

555
350
98
(252)
(174)

4
(391)
262
653
743

4
(493)
(27)
466
560

2
(545)
726
1,271
1,342

Key Drivers

12-month Forward Rolling FD P/E (x)


50

45

Group Mobile Subscribers (m)


Group Fixed Voice Subscribers (m)
Grp fixed brdband subscribers (m)
Group Pay TV Subs (m)
Group Mobile ARPU (US$/mth)
Grp fixed voice ARPU (US$/mth)
Grp fixed brdband ARPU (US$/mth)
Group Pay TV ARPU (US$/mth)

40
35

30
25
20
15
10
5
0
Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Samart I-Mobile

SOURCE: CIMB, COMPANY REPORTS

175

Property DevelopmentThailand
December 12, 2014

Sansiri Public Co
SIRI TB / SIRI.BK

Market Cap

Avg Daily Turnover

Free Float

US$772.1m

US$9.32m

58.1%

THB25,348m

THB303.0m

10,343 m shares

Current

THB1.86

Target

THB2.11

Prev. Target

THB2.12

Up/Downside

13.3%
Conviction|

Concerned about dilution

CIMB Analyst(s)

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

-6.7

3.1

-8.4

Absolute

-7.9

1.6

5.7

Major shareholders

% held

TS Star Company Limited


Thai NVDR
Chase Nominees Limited 42

18.1
16.8
7.4

Show Style "View Doc Map"

Despite its completed capital-raising exercise and concrete plans to


drive earnings growth, we maintain our Hold call on SIRI, as it may
take some time for the market to get over the massive dilution from the
capital-raising exercise in FY14 and warrant issuance in FY16. As we
roll over to 7x CY16 P/E (close to 5-year mean), our target price drops.
Our FY14-16 EPS is unchanged. In
spite of SIRIs capital-raising exercise
and the resulting dilution, we are
cautiously optimistic on SIRIs
earnings growth outlook. Earnings
growth would be supported by its
business restructuring to ensure
sustainable growth, solid backlog,
stronger capital base and healthier
balance sheet.

Capital-raising exercise
In Nov 2014, SIRI raised capital
through a rights issue, which allowed
holders of its common shares on 6 Oct
2014 to buy new shares at a ratio of
three existing shares for one new
share at a price of THB1.30. Each new
share came with one free 3-year
warrant (SIRI-W2), exercisable at
THB2.50 from the second year
onwards (no exercise of warrant
allowed in the first year). In addition,
SIRI offered 300m warrants under
ESOP #7 to its directors and
management employees. The new
shares and warrants were listed in
Nov 2014. The funds raised will be
mainly used for debt repayment and
land acquisition. We deem the
capital-raising exercise necessary,

Price Close

2.00

107.3

1.80

99.6

1.60

91.8

1.40
1000
800
600
400
200

84.0

Vol m

115.1

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range

 


Current

Target

given SIRIs highly-geared balance


sheet (above 2x at end-3Q14). Its
backlog, the highest in the sector, is
not sufficiently supported by its
capital structure (vs. large-scale PS
and LH). This limits its ability to fund
backlog construction and future
landbanking.

New growth path


After the capital-raising exercise, SIRI
announced a new business plan,
Engineer For Growth (EFG), which
lays the foundation for sustainable
earnings
growth
through
product/market diversification, cost
efficiency and new capital. SIRI
expects net margin to improve to 15%
over the next five years and gearing to
drop below 1x by FY16. It retains its
targets of THB12bn presales and
THB28bn-29bn revenue in FY14, as
well as presales of THB30bn and
revenue of THB36bn in FY15. We
expect strong earnings recovery in
FY15 and continued growth in FY16.

Hold for long term


SIRI is worth revisiting, given its
attractive risk-reward now.

Financial Summary

Relative to SET (RHS)

2.20

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
30,087
4,626
2,938
0.32
16.4%
6.74
0.17
8.98%
6.61
NA
107%
0.96
18.7%

Dec-13A
28,987
3,290
1,930
0.21
(34.3%)
8.78
0.09
5.01%
13.48
NA
160%
1.13
12.0%

Dec-14F
32,856
4,414
2,521
0.21
(2.3%)
8.99
0.09
4.83%
11.30
257.8
120%
1.15
12.7%
0%
0.96

Dec-15F
36,377
5,766
3,714
0.26
27.8%
7.04
0.13
7.09%
8.61
27.8
93%
1.04
15.5%
0%
1.13

Dec-16F
40,611
7,116
4,791
0.30
13.9%
6.18
0.13
7.26%
6.78
NA
58%
1.03
16.8%
0%
1.22

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Sansiri Public CoThailand


December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
28,987
9,719
3,290
(281)
3,008
(1,103)
0
408
2,313
0
2,313
(384)
0
1,929
1
0
0
0
1,930
1,930
1,930

Dec-14F
32,856
11,623
4,414
(366)
4,048
(1,314)
0
1,488
4,222
(858)
3,364
(844)
0
2,520
1
0
0
0
2,521
2,521
2,521

Dec-15F
36,377
12,237
5,766
(421)
5,345
(1,121)
0
417
4,642
0
4,642
(928)
0
3,713
1
0
0
0
3,714
3,714
3,714

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
40,611
13,853
7,116
(471)
6,645
(1,082)
0
426
5,989
0
5,989
(1,198)
0
4,791
1
0
0
0
4,791
4,791
4,791

Cash Flow

Dec-14F
9,688

Dec-15F
9,894

Dec-16F
8,616

45
45,621
0
52,957
2,700
0
0
4,383
7,083
11,854

53
54,496
0
64,237
2,808
0
0
1,166
3,973
14,000

63
53,636
0
63,593
2,920
0
0
1,148
4,068
11,000

75
56,000
0
64,691
3,037
0
0
1,131
4,168
10,000

2,251
5,284
19,388
22,816

2,296
5,595
21,891
22,900

2,342
5,966
19,308
22,400

2,388
6,372
18,760
17,255

768
23,584
0
42,972
17,067
0
17,068

784
23,684
0
45,574
22,638
(2)
22,636

799
23,199
0
42,507
25,156
(2)
25,154

815
18,070
0
36,831
32,030
(2)
32,028

Dec-13A
(4.1%)
(28.9%)
11.5%
(2.65)
1.65
4.88
16.6%
50.0%
0.55
756.7
38.37
7.5%
6.7%

Dec-14F
9.8%
34.2%
14.1%
(1.94)
1.62
5.92
25.1%
37.3%
0.57
860.5
39.07
7.2%
7.3%

Dec-15F
14.6%
30.6%
16.0%
(1.67)
1.79
7.60
20.0%
50.0%
0.59
817.5
35.06
8.4%
9.1%

Dec-16F
11.7%
23.4%
17.7%
(1.05)
1.80
10.13
20.0%
50.0%
0.63
749.8
32.35
10.7%
11.3%

Dec-13A
8,546.0
N/A
N/A
N/A
32.6%
N/A
N/A
N/A
N/A
N/A
23.8%

Dec-14F
22,797.0
N/A
N/A
N/A
32.3%
N/A
N/A
N/A
N/A
N/A
21.5%

Dec-15F
17,597.0
N/A
N/A
N/A
32.9%
N/A
N/A
N/A
N/A
N/A
19.2%

Dec-16F
17,597.0
N/A
N/A
N/A
33.4%
N/A
N/A
N/A
N/A
N/A
18.0%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
3,290

Dec-14F
4,414

Dec-15F
5,766

Dec-16F
7,116

(10,908)

(8,838)

896

(2,329)

(1,961)
(323)
(954)
(10,856)
(981)
0

230
(323)
(384)
(4,902)
(474)
0

(556)
(323)
(844)
4,938
(533)
0

(1,697)
(323)
0
2,767
(588)
0

0
(1,228)
(2,208)
11,662
1,839
0
(965)

0
3,233
2,759
2,231
4,825
0
(1,260)

0
33
(500)
(3,500)
64
0
(1,857)

0
33
(555)
(6,145)
3,939
0
(2,395)

(761)
11,776

570
6,366

896
(4,396)

896
(3,705)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Dec-13A
7,291

Jan-11

Jan-12

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

SOURCE: CIMB, COMPANY REPORTS

177

Property DevelopmentThailand
December 12, 2014

SC Asset Corporation
SC TB / SC.BK

Market Cap

Avg Daily Turnover

Free Float

US$407.4m

US$0.46m

34.5%

THB13,374m

THB15.08m

3,713 m shares

Current

THB3.60

Target

THB4.99

Prev. Target

THB4.59

Up/Downside

38.7%
Conviction|

More visibility for growth

CIMB Analyst(s)

We maintain our Add rating and continue to like SC for its improving
visibility in view of its increasingly solid backlog, sustainable gross
margins and well-contained SG&A. Our target price rises as we roll
over our valuation of 10x P/E (0.5 s.d. above its 5-year mean) to CY16.

Wattaipun EKATAKSIN
T (66) 2 657 9229
E wattaipun.ekataksin@cimb.com

Share price info


Share price perf. (%)

1M

3M

12M

Relative

0.6

-9.8

-6.3

Absolute

-0.6

-11.3

7.8

Major shareholders

% held

Shinawatra family
Mr. Bhanapot Damapong
Thai NVDR

61.2
4.8
2.3

Show Style "View Doc Map"

In view of its solid 9M14 performance,


we keep our EPS estimates unchanged.
We expect FY15 to show even stronger
earnings growth, backed by a high
lock-in rate of 30% for FY15 condo
revenue and sustainable gross margin.
Its P/E valuations of only 7-8.6x
CY15-16 are undemanding, lower than
its 5-year mean of 9x. Its FY15-16 EPS
growth of 19-27% is also compelling,
with 12% expected in FY14.

Cautiously optimistic
targets
Despite its solid 9M14 performance,
SC retained its FY14 targets for both
presales and revenue at THB12bn
each (+16% yoy for the former and
+7.5% yoy for the latter). SC expects
both presales and sales to continue to
grow at 10-15% in FY15, while
anticipating the bottomline to grow
even faster than the topline.
Additionally, SCs rental office
business remains intact with an
occupancy rate of 100% for ST1 and
ST2, and 95% for ST3. The total
rentable area for these three buildings
is 53,965 sq m.

Vol m

Price Close

106.8

3.50

99.9

3.00

92.9

2.50
50
40
30
20
10

86.0

Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range





Current

Target

Improving FY15 outlook


We expect sales to grow faster given
its increasingly solid backlog for
condos. SCs revenue mix consists of
20-30% condo and 70-80% SDH/TH,
reinforcing its strong earnings
visibility as our FY15-16 revenue
estimates are 20-28% secured by
condo backlog. Note that our FY14
sales forecast has been 70% locked in.
We expect FY14 EPS to grow by 12%,
while FY15 and FY16 EPS should
expand by 27% and 19%, respectively,
thanks to prudent expansion, rising
revenue visibility, sustainable gross
margins and a leaner back office with
higher efficiency.

Attractive valuations
Given SC's more compelling earnings
growth, valuation discount to its
5-year mean P/E of 9x (vs. the peer
average of 10x CY15 P/E and 9x CY16
P/E) and decent dividend yield of 5%
(vs. the peer average of 4%), we
remain positive about the company's
prospects as a solid long-term
investment.

Financial Summary

Relative to SET (RHS)

4.00

Dec-13

Total Net Revenues (THBm)


Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
8,358
1,385
1,219
0.33
12.9%
10.97
0.03
0.90%
7.70
NA
104%
1.40
12.9%

Dec-13A
10,031
1,311
1,082
0.29
(11.3%)
12.36
0.12
3.24%
7.18
NA
116%
1.27
10.8%

Dec-14F
11,804
1,616
1,216
0.33
12.5%
10.99
0.13
3.64%
6.18
17.41
100%
1.10
10.7%
0%
0.89

Dec-15F
13,270
2,055
1,550
0.42
27.5%
8.62
0.17
4.64%
5.46
20.07
85%
0.94
11.8%
0%
0.93

Dec-16F
15,171
2,449
1,853
0.50
19.5%
7.21
0.20
5.55%
4.69
26.15
69%
0.80
12.0%
0%
1.02

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

SC Asset CorporationThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Pref. & Special Div
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
10,031
3,566
1,311
(85)
1,226
(8)
0
56
3,528
0
1,273
(192)

Dec-14F
11,804
4,135
1,616
(81)
1,535
(44)
0
29
4,038
0
1,520
(304)

Dec-15F
13,270
4,653
2,055
(84)
1,972
(62)
0
29
4,536
0
1,938
(388)

(THBm)
Total Cash And Equivalents
Properties Under Development
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-16F
15,171
5,294
2,449
(91)
2,357
(70)
0
29
5,162
0
2,316
(463)

1,082
0
0

1,216
0
0

1,550
0
0

1,853
0
0

1,082
1,082
1,082

1,216
1,216
1,216

1,550
1,550
1,550

1,853
1,853
1,853

Cash Flow

Dec-14F
981

Dec-15F
1,196

Dec-16F
1,390

63
19,299
550
20,747
6,076
0
60
109
6,246
7,069

68
19,553
592
21,195
6,258
0
60
113
6,431
6,158

73
21,207
699
23,175
6,428
0
60
116
6,604
5,743

79
22,498
752
24,719
7,012
0
60
120
7,192
5,368

627
1,763
9,459
5,993

238
1,057
7,453
7,000

238
1,057
7,038
7,500

239
1,057
6,664
7,500

1,014
7,007
0
16,466
10,527
0
10,527

1,044
8,044
0
15,498
12,128
0
12,128

1,076
8,576
0
15,613
14,165
0
14,165

1,108
8,608
0
15,272
16,638
0
16,638

Dec-13A
20.0%
18.1%
35.5%
(3.29)
2.84
37.18
0%
12.3%
2.32
1,020
29.10
13.7%
15.9%

Dec-14F
17.7%
16.0%
35.0%
(3.28)
3.27
32.42
0%
12.0%
2.03
964
21.44
13.6%
16.6%

Dec-15F
12.4%
12.5%
35.1%
(3.25)
3.82
31.37
0%
13.7%
1.93
897
10.48
14.4%
17.3%

Dec-16F
14.3%
13.8%
34.9%
(3.09)
4.48
32.35
0%
14.4%
1.81
839
9.14
15.3%
18.3%

Dec-13A
1,328.0
N/A
N/A
N/A
35.5%
N/A
N/A
N/A
N/A
N/A
24.5%

Dec-14F
4,807.0
N/A
N/A
N/A
35.0%
N/A
N/A
N/A
N/A
N/A
23.0%

Dec-15F
3,004.5
N/A
N/A
N/A
35.1%
N/A
N/A
N/A
N/A
N/A
21.0%

Dec-16F
4,206.5
N/A
N/A
N/A
34.9%
N/A
N/A
N/A
N/A
N/A
20.0%

Key Ratios

(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
Straight Line Adjustment
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Disposals of Investment Properties
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing

Dec-13A
1,311

Dec-14F
1,616

Dec-15F
2,055

Dec-16F
2,449

(3,899)
85

(647)
81

(1,658)
84

(1,296)
91

299
(94)
(180)
(2,562)
(161)
0

113
(125)
(192)
765
(110)
0

762
(146)
(304)
709
(143)
0

387
(161)
(388)
991
(122)
0

0
47
(113)
2,425
423
0
(433)

0
16
(94)
96
1
0
(486)

0
16
(127)
84
0
0
(620)

0
17
(106)
(374)
0
0
(741)

345
2,760

(135)
(524)

169
(367)

424
(691)

Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (THB)
BVPS (THB)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)

Key Drivers

12-month Forward Rolling FD P/E (x)


40.0

Unbooked Presales (m) (THB)


Unbooked Presales (area: m sm)
Unbooked Presales (units)
Unsold attrib. landbank (area: m sm)
Gross Margins (%)
Contracted Sales ASP (per Sm) (THB)
Residential EBIT Margin (%)
Investment rev / total rev (%)
Residential rev / total rev (%)
Invt. properties rental margin (%)
SG&A / Sales Ratio (%)

35.0
30.0
25.0
20.0
15.0

10.0
5.0
0.0
Jan-10

Dec-13A
835

Jan-11

Jan-12

Jan-13

Jan-14

Amata Corporation

Ananda Development

AP (Thailand) PCL

Central Pattana

Hemaraj

Land And Houses

SOURCE: CIMB, COMPANY REPORTS

179

CementTHAILAND
December 12, 2014

Siam Cement
SCC TB / SCC.BK

Market Cap

Avg Daily Turnover

Free Float

US$16,887m

US$13.96m

67.9%

THB554,400m

THB454.7m

1,200 m shares

Current

THB462.0

Target

THB553.0

Prev. Target

THB553.0

Up/Downside

19.7%
Conviction|

Best play on oil price downturn

CIMB Analyst(s)

SCCs earnings momentum will accelerate in 2015-16 driven not only


by its well-diversified portfolio that includes domestic-driven sectors of
cement, building materials and auto, as well as its global-driven
petrochemical olefins group, but also from the sharp decline in oil price,
thanks to its high energy cost structure for cement and ceramics and
its naphtha-based petrochemical producer.

Suwat SINSADOK, CFA, FRM


T (66) 2 657 9228
E suwat.si@cimb.com

Share price info


Share price perf. (%)

1M

3M

Relative

4.8

2.8

-1.4

Absolute

3.6

1.3

12.7

Major shareholders

12M

% held

Crown Property Bureau (CPB)


NVDR
Crown Property Bureau Equity (CPBE)

30.0
9.5
1.9

Show Style "View Doc Map"

We trim our EPS forecasts for 2014-16


to reflect our lower utilisation for
SCCs PTA associate. We believe SCC
is the best play for Thailand as an
ASEAN play, oil beneficiary play, and
domestic cement and building
material play in 2015-16. Catalysts
include cement demand growth
recovery and rising petrochemical
olefin margins. We maintain Add and
our SOP-based target price.

Domestic recovery play


We expect SCCs earnings from the
cement and building materials group
to bottom in 3Q14 and start to recover
into 2015, driven by Thailands
cement demand growth recovery from
-3% in 3Q14 to +5% in 2015. This will
be boosted by government spending
that should inject much-needed
capital into the economy.

Petrochemical still a hero


As a naphtha-based olefin producer,
SCCs 2.9mtpa olefin production
should be a key earnings growth
driver in 2015, helped by the lower
naphtha cost and healthy demand
outlook that should lead to margin

Price Close

116.0

470

111.8

450

107.7

430

103.5

410

99.3

390

95.2

370
6

91.0

Vol m

4
2
Mar-14

Jun-14

Sep-14

Source: Bloomberg

52-week share price range

 


Current

Target

expansion. We believe petrochemical


earnings will help sustain SCCs
earnings in 2015-16, before they start
to decline when the new supply influx
from US shale gas-based producers
enter the market.

ASEAN reality growth


SCC will start to see its earnings
growth momentum accelerate in 2015
via its expansion into the ASEAN
market. Initially setting the foot print
via acquisitions and exports from
Thailand, SCC will then complete the
construction of a series of cement
plants in ASEAN in 2015-18, from
Indonesia and Myanmar to Cambodia
and Laos. This alone will add 30%
cement capacity growth to 30mtpa by
2018.

Attractive conglomerate
Given the solid cement growth
expectation, we believe its share price
will start rerating ahead of its
earnings growth momentum in 2015,
after a 2-year consolidation due to
Thailands weak cement demand
growth.

Financial Summary

Relative to SET (RHS)

490

Dec-13

Revenue (THBm)
Operating EBITDA (THBm)
Net Profit (THBm)
Core EPS (THB)
Core EPS Growth
FD Core P/E (x)
DPS (THB)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)

Dec-12A
407,601
31,434
23,580
19.65
(13.6%)
23.51
12.00
2.60%
20.12
30.56
88.6%
3.87
16.6%

Dec-13A
434,251
46,840
36,719
30.60
55.7%
15.10
15.50
3.35%
13.80
55.64
86.8%
3.42
24.1%

Dec-14F
446,295
55,819
37,069
30.89
1.0%
14.96
12.00
2.60%
11.28
14.58
63.4%
2.97
21.3%
0.01%

Dec-15F
456,360
63,087
42,530
35.44
14.7%
13.04
14.00
3.03%
9.80
15.50
46.6%
2.60
21.2%
(0.83%)

Dec-16F
459,534
67,298
45,025
37.52
5.9%
12.31
16.00
3.46%
8.92
34.82
31.7%
2.30
19.8%
(2.37%)

SOURCE: CIMB, COMPANY REPORTS


IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA

Siam CementThailand
December 12, 2014

Balance Sheet

Profit & Loss


(THBm)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit

Dec-13A
434,251
86,873
46,840
(15,718)
31,123
(8,193)
6,744
13,141
42,814
0
42,814
(5,003)

Dec-14F
446,295
96,962
55,819
(17,163)
38,656
(8,053)
8,040
11,837
50,481
0
50,481
(6,366)

Dec-15F
456,360
105,158
63,087
(18,775)
44,312
(7,854)
9,413
12,429
58,300
0
58,300
(7,333)

Dec-16F
459,534
109,661
67,298
(20,387)
46,911
(7,854)
9,417
13,051
61,524
0
61,524
(7,816)

37,811
(1,091)
0

44,115
(7,046)
0

50,967
(8,437)
0

53,708
(8,683)
0

36,719
36,719
36,719

37,069
37,069
37,069

42,530
42,530
42,530

45,025
45,025
45,025

(THBm)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity

Dec-13A
24,418
49,453
55,557
5,702
135,130
183,589
95,679
0
26,235
305,504
33,739

Dec-14F
48,042
53,826
55,870
5,860
163,598
200,442
95,679
0
26,235
322,356
33,739

Dec-15F
68,214
53,735
56,168
5,992
184,110
215,683
95,679
0
26,235
337,597
33,739

Dec-16F
94,991
49,048
55,956
6,034
206,028
229,311
95,679
0
26,235
351,226
33,739

51,211
4,785
89,735
153,103

51,499
18,075
103,314
153,103

51,775
18,186
103,701
153,103

51,579
18,221
103,539
153,103

10,576
163,678
0
253,414
161,989
25,230
187,219

10,576
163,678
0
266,993
186,686
32,276
218,961

10,576
163,678
0
267,379
213,616
40,713
254,328

10,576
163,678
0
267,218
240,641
49,395
290,036

Key Ratios

Cash Flow
(THBm)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Total Cash Generated
Free Cashflow To Equity
Free Cashflow To Firm

Dec-13A
46,840
6,744
(8,021)

Dec-14F
55,819
8,040
(4,424)

Dec-15F
63,087
9,413
47

Dec-16F
67,298
9,417
4,697

11,005
6,799
(8,193)
(5,003)
50,170
(32,284)
1
(6,314)
9,762
(28,835)
(11,372)
0
0
(17,999)

20,591
4,249
(8,053)
(6,366)
69,857
(31,834)
0
0
0
(31,834)
0
0
0
(14,400)</