Professional Documents
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PLEASE CLICK ON THE PAGE NUMBER TO MOVE TO THE RELEVANT PAGE. KEY INDICES
Symbol Close Chg %Chg
KEY HIGHLIGHTS SET 1,395.21 (0.82) (0.06)
Results SET50 946.88 0.10 0.01
Value (Btm) - SET 36,451,256
Aapico Hitech (AH TB/HOLD/Bt14.50/Target: Bt15.40) Page 2 Top 5 Sector
1Q14: In-line results, positive long-term outlook. Upgrade to HOLD. BANK 522.42 0.52 0.10
PETRO 947.93 4.14 0.44
Bangkok Dusit Medical Services (BGH TB/BUY/Bt15.50/Target: Bt17.00) Page 5
PROP 256.03 (2.45) (0.95)
1Q14: Better than expectation as cost control measures bear fruit. Earnings growth ENERG 19,292.78 (15.43) (0.08)
should continue into the next few years. ICT 219.17 (2.99) (1.35)
Source: Bloomberg
Central Plaza Hotel (CENTEL TB/BUY/Bt30.50/Target: Bt35.50) Page 8
1Q14: Results beat expectations by 10.3%. TOP VOLUME
Chg Volume
Hana Microelectronics (HANA TB/HOLD/Bt35.00/Target: Bt33.00) Page 11 Symbol Price (Bt) (%) (‘000)
SAWAD 14.30 (2.72) 273,026.6
1Q14: Significant gains from flood claims. TRUE 6.75 (4.26) 242,732.9
IEC 0.03 - 166,469.8
Thai Union Frozen Products (TUF TB/BUY/Bt69.50/Target: Bt80.00) Page 14 N-PARK 0.05 (16.67) 164,762.7
1Q14: Earnings in line with our expectation. ICHI 25.50 4.94 144,643.4
Source: Bloomberg
PRICE CHART
(lcy) (%)
KEY FINANCIALS 30
AAPICO HITECH PCL AAPICO HITECH PCL/SET INDEX
110
Year to 31 Dec (Btm) 2012 2013 2014F 2015F 2016F 100
25
Net turnover 16,120 15,627 13,949 14,723 15,566 90
think that in the next 1-2 years, a surge in replacement demand could stimulate Source: Bloomberg, UOB Kay Hian
domestic car sales again as car owners tend to replace their vehicles after 11 years.
CCI & DOMESTIC CAR SALES
EARNINGS REVISION/RISK
90
160,000
• Key risks include: a) decrease in total car production, b) a larger-than-expected plunge 140,000 85
in domestic sales, and c) the political turmoil being extended. 120,000
100,000 80
VALUATION/RECOMMENDATION 80,000
75
60,000
• We think 2Q14 could be the period for accumulating its shares as we expect weak 40,000 70
20,000
2Q14 earnings due to fewer working days (lower utilisation), which could have a - 65
negative impact on the share price.
Ju 1
Ju 2
Ju 3
O 11
O 12
O 13
11
Ja 1
A 12
J a 12
A 13
J a 13
14
-1
-1
-1
-1
l-
l-
l-
n-
n-
-
n-
-
n-
pr
pr
pr
ct
ct
ct
Ja
• Upgrade to HOLD with a target price at Bt15.40 pegged at 10.0x 2014F PE, or +0.5
A
Car Sales Consumer Con.
SD to its 4-year average. We believe that negative factors have been priced in. In the
Source: UTCC, UOB Kay Hian
longer term, the automobile industry could see positive effects from manufacturers’
relocation to Thailand, which will become an ASEAN car manufacturing hub. Entry GROSS MARGIN
price is Bt13.50.
11.0%
SHARE PRICE CATALYST 10.0%
8.0%
7.0%
6.0%
5.0%
4.0%
1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14
an increase of 7% yoy. BGH’s 1Q14 performance was also better qoq as the hospital’s (lcy)
20
BANGKOK DUSIT MED SERVICE/SET INDEX
(%)
120
tight cost control started to bear fruit.
110
18
100
16
90
KEY FINANCIALS 14
Year to 31 Dec (Btm) 2012 2013 2014F 2015F 2016F 80
12
Net turnover 45,305 50,461 57,000 66,272 77,263 70
• Earnings to continue to grow despite the low season in 2Q14. As BGH seemed to
find the right measures to control cost, we expect BGH’s earnings growth to continue in
the following quarters despite its plans to open up to six new hospitals this year. 26% 28% 28% 30%
However, the pace of growth may slow down slightly in 2Q14 as the hospital industry
enters the low season. Earnings growth should come back strongly in 3Q14 as the
74% 72% 72% 70%
industry enters the high season.
• Expect more acquisition of new hospitals soon. With cost control in place, we expect
2011 2012 2013 1Q14F
management may pay more attention on network expansion. In the pipeline is a
schedule to open six new hospitals in 2014, two new hospitals in 2015 and one new
Domestic Foreign
hospital in 2016. This will enable BGH to have 40 hospitals under its umbrella. We
expect more acquisitions soon to fulfil its target to have 50 hospitals under the group. Source: BGH
60,000
70
60
earnings growth momentum should slow down in 2Q14 as the industry braces for the low 50,000 50
season. We therefore maintain our forecasts for sales growth of 13% and 16% in 2014 40,000
27
40
24
and 2015, respectively. Its core profits are forecasted to grow by 27% and 24%, in 2014 30,000 30
20,000 20
and 2015, respectively. 10,000 13
16
10
- 0
VALUATION/RECOMMENDATION 2012 2013 2014F 2015F
Sales Core profit Sales growth yoy Core profit growth
• Maintain BUY. BGH is a good play on earnings recovery as evident in its good 1Q14
Source: BGH,UOB Kay Hian
results. We expect its earnings growth should continue and gather momentum in 3Q14.
We therefore maintain BUY on BGH. It also trades at 31x PE, on a par with the regional QUARTERLY NET PROFIT
(Btm)
peers’ yet offers catalysts on potential M&A deals in the foreseeable future. Current 3500
share price still offers 10% upside to our Bt17.00 target price, based on DCF model at a 3000
2000
1000
PEER COMPARISON 1Q 2Q 3Q 4Q
IHH Healthcare IHH MK 42.5 1.8 19.6 0.4 4.3 18.5 25%
KPJ Healthcare KPJ MK 30.3 2.8 16.5 1.6 9.2 6.8 20%
10%
Apollo APHS IN 38.3 4.4 19.5 0.6 11.8 7.7 5%
0%
1Q13 2Q13 3Q13 4Q13 1Q14 2Q13 3Q13 4Q13
Local aver. 28.4 5.4 17.0 2.0 19.8 22.0
Total aver. 31.5 4.3 17.8 1.5 14.9 7.3 Gross margin EBITDA margin Net margin
*Core Earnings
Source: Bloomberg, UOB Kay Hian Source: BGH
3.0
-1SD: 2.3x
2.0
-2SD: 1.1x
1.0
0.0
Jan-06 Nov-06 Sep-07 Jul-08 May-09 Mar-10 Jan-11 Nov-11 Sep-12 Jul-13 May-1
offset the negative impact of political turmoil to its hotels in Bangkok and Pattaya. 120
40 110
100
35
KEY FINANCIALS 90
30 80
Year to 31 Dec (Btm) 2012 2013 2014F 2015F 2016F
70
25
Net turnover 14,918 17,557 18,930 21,536 23,528 60
Note that Centara Grand Island Resort and Centara Ras Fushi Resort in Maldives OCCUPANCY, ARR AND REVPAR IN 2008-15F
reported strong RevPar growth of 17.5% in 1Q14. In addition, Centara Ras Fushi Resort (Bt)
6,000 81.9% 90.0%
& Spa Maldives, opened on 24 Mar 13, will have a full-year 2014 contribution. RevPar of 79.8%
75.8%
80.0%
5,000 69.9%
its Bangkok hotels declined 44% yoy to Bt1,391 in 1Q14 as a result of a lower occupancy 64.2%
60.5%
58.1%
63.9%
4,166
70.0%
rate of 48% (vs 78% in 1Q13) and a 9% drop in average room rate (ARR). However, 4,000
3,486
3,639 60.0%
50.0%
CENTEL’s hotels in upcountry were less affected as its RevPar managed to be flat yoy at 3,000
2,340
2,617
40.0%
2,162
Bt4,490 in 1Q14. In sum, its RevPar of CENTEL’s hotel portfolio, including resorts in 2,000
1,983 1,979
30.0%
Maldives, increased 6.7% yoy to Bt4,323 in 1Q14, driven by strong ARR growth while 1,000
20.0%
10.0%
occupancy dropped to 75.3% (vs 84.3% in 1Q13). Its gross margin from hotel business - 0.0%
rose to 67.7% in 1Q14 from 66.7% in 1Q13 due to solid ARR growth of 19% to Bt6,103 in 2008 2009 2010 2011 2012 2013 2014F 2015F
increased 10.4% yoy to 752. Meanwhile, the average SSS growth in 1Q14 was still 3,500
30.0%
25.0%
18.2%
negative 1.8% due to a slowdown in domestic consumption. Note that SSS growth of 3,000
11.8%
14.5%
20.0%
2,500 15.0%
most food brands except KFC (+2.2%) and Ootoya (+5.7%) was negative. Its gross 2,000 5.7%
4.4%
10.0%
margin from food business declined to 50.1% in 1Q14 compared with 51.5% in 1Q13 but 1,500 -0.2% 5.0%
0.0%
1,000
was flat qoq as a result of higher cost of certain raw food ingredients and packaging 500
-8.3% -5.0%
-10.0%
materials, as well as the increased sales promotions and new menu offerings. -
2,162 1,983 1,979 2,340 2,617 3,486 3,639 4,166
-15.0%
2008 2009 2010 2011 2012 2013 2014F 2015F
• Maintain BUY due to its promising long-term outlook and more flexibility in restaurant
17%
Maldives
portfolio management. CENTEL’s normalised profit is expected to grow strongly at a 23% Hua Hin
10%
CAGR of 19.8% for 2013-15. We maintain our target price for CENTEL at Bt35.50 based on
sum-of-the-parts valuation. We value CENTEL’s hotel business at Bt22.55, pegged at 14.3x Hat Yai
2%
Mae Sot
2014F EV/EBITDA, and its restaurant business at Bt12.95, based on 21.9x 2014F PE. 0.4%
Sam ui Krabi
SHARE PRICE CATALYST 8% 7%
10.0% 300
6.2%
5.0% 150
1.5% 0.9% 1.0%
9.1% 2.3% 15.4% 23.7% 27.1% 9.7% 11.5%
0.0% 0
2008 2009 2010 2011 2012 2013 2014F
-5.0% -150
-4.5%
-10.0% -300
SSS TSS No. of outlets
increased 60.1% qoq and 66.5% yoy to Bt240m, while normalised net profit soared to OMAC (Thailand) Limited 5.0
Bt1,590m on flood claims (business interruption claims) of Bt1.3b from. Revenue Rainbow Joy Limited 5.0
increased 19% yoy in US$ terms from US$120m to US$143m, while the Thai baht FY14 NAV/Share (Bt) 22.26
depreciated 9% yoy to Bt32.66/US$, which led to sales rising 29% yoy. In addition, FY14 Net Cash/Share (Bt) 7.90
gross margin was maintained at 12.4% due to the weakening baht.
• Outstanding claims. HANA still has outstanding claims of around Bt81m, which will be PRICE CHART
recognised in 2014. (lcy)
HANA MICROELECTRONICS PCL
KEY FINANCIALS 35
150
Year to 31 Dec (Btm) 2012 2013 2014F 2015F 2016F 30
130
• We raise our assumptions for capacity from Lamphun Plant by 25%, utilisation rate, -
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
gross margin by 0.5ppt, and flood claims from Bt1,000m to Bt1,431m.
EARNINGS REVISION Source: Bloomberg, UOB Kay Hian
2014F 2014F chg 2015F 2015F chg
Year to 31 Dec (Btm) Old New (%) Old New (%) BOOK-TO-BILL RATIO
(x)
Net turnover 19,394 20,857 7.5 20,624 21,449 4.0 1.60
Net profit 2,742 3,470 26.6 1,954 2,136 9.3 +3SD: 1.4x
1.40
Net profit excl. claims 1,742 2,039 17.1 1,954 2,136 9.3 +2SD: 1.2x
1.20
+1SD: 1.1x
EPS (adj) (Bt) 3.4 4.3 26.6 2.4 2.7 9.3 Mean: 1.0x
1.00
EPS excl. claims (adj) (Bt) 2.2 2.5 17.1 2.4 2.7 9.3
0.80
Source: UOB Kay Hian -1SD: 0.8x
0.60 -2SD:0.7x
• Key risks include: a) low utilisation rate of new plants, b) the Cambodian plant may face
0.40
bureaucratic problems, and c) fluctuations in the Thai baht. Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan-
04 05 06 07 08 09 10 11 12 13 14
VALUATION/RECOMMENDATION
• We think share price has reflected the growth catalysts from capacity expansion and Source: SEMI, UOB Kay Hian
new customers. But HANA is a good dividend stock, and we forecast a dividend yield
6.0% in 2014-15.
• Maintain HOLD with a new target price at Bt33.00, pegged at 13.0x 2014F PE, or
+1.5SD to its 4-year mean of 9.1x, reflecting growth from the new plant and industry
upturn, as seen in the book-to-bill ratio at above 1.0x. Entry price is Bt30.00.
SHARE PRICE CATALYST
• Capacity expansion from new plants.
Net margins 2.8 3.7 3.4 1mth 3mth 6mth 1yr YTD
Source: TUF, UOB Kay Hian 1.5 4.9 9.4 8.6 (3.1)
RESULTS Major Shareholders %
Mr. KRAISORN CHANSIRI 9.0
• 1Q14 earnings increased 41% yoy but decreased 18% qoq. Thai Union Frozen
Products (TUF) posted a net profit of Bt950m in 1Q14, which was in line with our Mr. THIRAPHONG CHANSIRI 5.2
expectation. Sales grew 14% yoy due to baht depreciation and higher sales of tuna, Mr. CHENG NIRUTTINANON 4.9
shrimp & related business, pet food and value-added & other products. However, sales in
FY14 NAV/Share (Bt) 37.47
1Q14 dropped 9% qoq owing to the low selling season. Gross margin improved from 13%
FY14 Net Debt/Share (Bt) 33.44
in 4Q13 to 15% in 1Q14 thanks to higher margin of branded tuna from declining raw
material cost. In addition, a foreign exchange gain of Bt254m supported earnings in 1Q14.
1Q14 revenue comprised tuna at 48%, shrimp and related business at 23%, sardine & PRICE CHART
mackerel at 6%, salmon at 4%, pet food at 8% and value added and other products at (lcy)
THAI UNION FROZEN PROD PUB
promotional activities thanks to relatively lower tuna raw material prices in 2014. In 2014
300
addition, gross margin in OEM tuna may gradually improve qoq given more timely price 250
adjustment when raw material price stabilises and orders pick up while gross margin of 200
150
branded business should benefit from lower cost of raw material. For shrimp business, 100
TUF still maintained the view of supply improvement in 2H14 and the whole year output 50
0
would vary from 250,000 tons to 300,000 tons. However, we noticed shrimp price has
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
dropped to Bt210 per kg from average price of Bt260 in Apr 14, which should be a
Source: CPF
positive sign of the EMS problem easing. In addition, TUF expected lower per unit
overhead cost and improving production efficiency from the integration of PPC’s and
TUF’s shrimp plant facilities in 1Q14, which should support cost control in the shrimp SALES BREAKDOWN BY COUNTRIES IN 1Q14
business going forward. Furthermore, TUF believed that US Pet Nutrition would
breakeven in 2H14 as the market has grown with demand becoming inelastic and with
margin improving.
• 1Q14 earnings should be the quarterly bottom of this year. Given the above-
mentioned outlook and the high selling season for both tuna and shrimp in 2Q and 3Q,
we believe that 1Q14 earnings would be the quarterly bottom of this year.
EARNINGS REVISION/RISK
• No significant changes for earnings projection in 2014-15. We project revenue growth for
2014 at 13% and gross margin at 14.5%, which both are in line with management
guidance.
VALUATION/RECOMMENDATION
• Maintain BUY with a target price of Bt80.00, pegged at 18.00x 2014F PE, +1.5SD to its
5-year mean at 13x.
Source: TUF
SHARE PRICE CATALYST
• The EMS problem being resolved.
in 1Q14. 110
100
20
KEY FINANCIALS 90
15 70
Net turnover 27,350 25,762 27,258 27,371 27,948 6
• Rising palm oil prices, which should reduce pressure on soybean oil prices.
• The successful development of a new product, Eproxidize soybean oil, in 2015 should
be a catalyst for TVO as the product may have the highest gross margin among TVO’s
products
• Japan’s lifting of a ban on raw chicken from Thailand since end-13 may stimulate
soybean meal demand from 2014 as this is animal feed.
• TVO is seeking for new businesses as it aims to be a more globalised company.
10
60
KEY FINANCIALS 8
10
50
Year to 31 Dec (Btm) 2012 2013 2014F 2015F 2016F Volume (m)
5
Net turnover 16,933 17,332 20,676 22,462 25,570
EBITDA 1,657 116 389 472 573 0
May 13 Jul 13 Sep 13 Nov 13 Jan 14 Mar 14 May 14
Operating profit 1,657 116 389 472 573
Net profit (rep./act.) 1,562 198 395 488 565 Source: Bloomberg
Net profit (adj.) 1,562 198 395 488 565
EPS (Bt) 1.3 0.2 0.3 0.4 0.5 ANALYST
PE (x) 8.0 62.8 31.5 25.5 22.0 Arsit Pamaranont
P/B (x) 0.7 0.8 0.8 0.8 0.8 +662 659 8317
EV/EBITDA (x) 8.5 121.2 36.2 29.8 24.6 arsit@uobkayhian.co.th
Dividend yield (%) 8.2 1.9 2.9 3.3 3.3
Net margin (%) 9.2 1.1 1.9 2.2 2.2
Net debt/(cash) to equity (%) 6.0 11.9 10.6 7.2 6.3
Interest cover (x) 13.3 0.7 2.3 3.0 3.3
ROE (%) 9.4 1.2 2.5 3.1 3.6
Consensus net profit - - 357 450 645
UOBKH/Consensus (x) - - 1.11 1.08 0.88
Source: VNT, Bloomberg, UOB Kay Hian
CORPORATE
BEC WORLD PUBLIC COMPANY (BEC TB/BUY/Bt52.00/Target:Bt67.50)
1Q14: Results Earnings Lower Than Our Expectation
Year to 31 Dec 1Q13 4Q13 1Q14 yoy qoq Remarks
(Btm) (Btm) (Btm) %chg %chg
Sales 3,815 4,073 3,751 -2% -8% Sales dropped both yoy and qoq due
to the impact from political turmoil
Gross profit 2,192 2,266 1,926 -12% -15%
SG&A expense 421 547 474 13% -13%
Other income 57 57 60 4% 4%
EBT 1,780 1,726 1,459 -18% -15%
EBIT 1,780 1,728 1,462 -18% -15%
Net profit 1,381 1,341 1,149 -17% -14%
Ratio-%
Gross margins 57% 55% 51%
EBITDA 59% 56% 54%
margins
Net margins 36% 32% 30%
DE-x - - -
Source: BEC, UOB Kay Hian
Result: BEC posted 1Q14 earnings at Bt1,149 m, down 17% yoy and 14% qoq. The results were lower than our expectation due to larger-
than-expected impact from the political unrest.
Impact: Sales declined 2% yoy and 8% qoq due to lower advertising revenue as a result of the sluggish economic as well as the political
turmoil. Gross margin decreased from 55% in 4Q13 to 51% in 1Q14 following the economic downturn and more investment in both
instruments and human resources.
Recommendation: We still maintain our BUY recommendation with a target price at Bt 67.50 , pegged at 24x 2014F PE but plan to revise
down our earnings forecast to reflect the lower-than-expected 1Q14 earnings after attending the analysts’ meeting today.
Results: SPALI reported 1Q14 net profit of Bt741.2m, down 57.8% qoq but up 57.3% yoy. The results were in line with our expectations.
Revenue from residential sales declined 52.9% qoq but increased 54.3% yoy to Bt3,126.8m in 1Q14, driven by the continued unit transfers
at Supalai Premier Ratchathewi project. Condo contributed 54% of total revenue from residential sales in 1Q14 while the rest came from
low-rise housing projects. Its gross margin from residential sales widened to 41.9% in 1Q14 compared with 40.6% in 1Q13 and 41.2% in
4Q13. Meanwhile, its SG&A expenses-to-revenue ratio in 1Q14 fell to 11.5% vs 14.0% in 1Q13 due to a larger revenue base.
Recommendation: We maintain our BUY rating on its strong growth prospects with high earnings visibility, solid balance sheet position,
and cheap valuations. Our TP of Bt23.00 is based on 9.8x PE, which is in line with -0.5SD to its historical average PE since 2012.
Results: TICON reported a 1Q14 net profit of Bt143.7m, down 84.2% qoq and 43.6% yoy due to: a) lower rental income, b) the absence of
insurance claims for flooded properties and no gain on sales of investments in TFUND and TLOGIS in 1Q14, c) a drop in realised
additional gains on sales of properties to property funds, and d) higher SG&A expenses and interest expenses.
TICON’s rental income declined 18.3% qoq and 25.0% yoy to Bt202m in 1Q14 due to the sale of factories and warehouses worth
Bt5,514.5m to TICON Industrial Growth Leasehold Property Fund (TGROWTH) in Dec 13. Its gross margin from rental improved to 75.4%
in 1Q14 from 66.8% in 1Q13 since the company reclassified properties transferred to TGROWTH as a non-current assets held-for-sale of
Bt3,200.5m, and all these assets were not required to be depreciated. Meanwhile, the company recorded revenue from property sales of
Bt498.2m to TGROWTH amounting to Bt414.2m and TFUND worth Bt84m in 1Q14. Overall gross margin improved to 64.4% in 1Q14 vs.
63.7% in 1Q13.
SECTOR
Property: Sector set to suffer sales decline in 2014. Overall property sales are likely to fall by up to 10% this year, hit by weak
domestic consumption over the political strife, which has been ongoing for more than six months now. The SET-listed property developers
Pruksa Real Estate Plc (PS) and Quality Houses Plc (QH) both predict overall property sales will decline by 5-10% this year from a value of
Bt650b last year. "If the political crisis drags on until year-end, the sector could see a contraction of as much as 10%," Rutt Phanijphand,
president and chief executive of QH, said yesterday. He compared this with average annual growth of 10-20% in recent years. Thailand's
real estate market has been suffering from weak domestic demand, while several developers have delayed project launches in the first
quarter. On Wednesday, Pruksa chief operating officer Lersuk Chuladesa also projected the Thai property market would decline by 5-10%
this year while predicting the economy would grow by only 2%. "The market's recovery will hinge largely on how soon the political
stalemate can be settled," said Mr Rutt. (Source: Bangkok Post)
ECONOMICS / POLITICS
Economy: Negative growth seen for 1Q14. The Bank of Thailand (BOT) has said the country's economic growth from 4Q13 to
1Q14 is likely to be negative while the Kingdom's credit-default swap (CDS) remains stable. Dr Roong Mallikamas, spokeswoman of the
BOT, said the latest political developments continued to create high uncertainty for the economy and it was most likely that GDP growth
from 4Q13 to 1Q14 would be negative. The National Economic and Social Development Board (NESDB) will announce the 1Q14 GDP
figure on Monday. Roong said the economic slowdown would have only a small impact on the currency market, as the market was well
aware of the situation and had absorbed some of the effects from the slump already. In terms of the country's CDS level, she said that the
ratings of the surrounding countries such as Malaysia and Philippines had decreased but Thailand's rating had remained stable. While the
spread had widened, it was considerably small and not related to the political uncertainty. (Source: The Nation)
Disclosures/Disclaimers
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