Thailand Daily Financial Report: Comprehensive Analysis of Key Companies

Date: Thursday, 07 November 2024

Broker: UOB Kay Hian Securities (Thailand) Public Company Limited

Impact of Trump’s Policies on Key Sectors

Donald Trump’s victory in the recent election is expected to have significant implications for various sectors in Thailand. His policies, particularly the US-China trade war, are likely to benefit the industrial estate and electronics sectors, potentially leading to the relocation of Chinese companies to Thailand. This could also boost the import of electronic components from the US to replace Chinese products. Additionally, coal mine operators and coal-fired power plants may benefit from Trump’s support for fossil energy. Our top picks in this context are AMATA, BANPU, DELTA, STGT, and WHA.

PTT Global Chemical (PTTGC TB)

3Q24: Net Loss of Bt19.3b Due to Huge Impairment Loss

PTT Global Chemical reported a net loss of Bt19.3 billion in 3Q24, primarily due to an impairment loss of Bt17.5 billion. The core operations experienced a smaller loss quarter-on-quarter (qoq), supported partially by a solid adjusted EBITDA performance in the refinery and aromatics businesses. However, the outlook for 4Q24 remains bleak, with expected net losses due to provision expenses for PTTAC and a continued decline in petrochemical spreads.

Financial Highlights:

• Revenue: Bt150.6 billion, down 7% year-on-year (yoy) and 11% qoq.
• EBITDA: Bt6.9 billion, down 37% yoy and 24% qoq.
• Net Profit: Loss of Bt19.3 billion, significantly impacted by a Bt17.5 billion impairment loss.
• Gross Profit Margin: 6.0%.
• EBITDA Margin: 4.6%.
• Net Profit Margin: -12.8%.

Our recommendation is to maintain a HOLD on PTTGC with a target price of Bt24.50. We suggest switching to BCP and IVL due to a more favorable outlook in the oil & gas sector.

Quality Houses (QH TB)

3Q24: In Line With Expectations

Quality Houses reported a net profit of Bt573 million for 3Q24, down 10% yoy and 8% qoq, aligning with expectations. Revenue from the low-rise segment saw a decrease, while condo transfers underpinned the company’s revenue. Hotel operations faced a slowdown due to renovations. The outlook remains unexciting as the residential segment continues to face challenges.

Financial Highlights:

• Revenue: Bt2.3 billion, flat yoy and qoq.
• Operating EBIT: Bt231 million, down 13.6% yoy and 9.9% qoq.
• Net Profit: Bt573 million, down 9.6% yoy and 7.6% qoq.
• Gross Margin: 30.5%.
• Net Margin: 24.4%.

We maintain a HOLD rating with a target price of Bt1.82, based on a sum-of-the-parts (SOTP) method, valuing the core property business and investments separately.

Thai Union Group (TU TB)

3Q24: Earnings In Line With Our and Market Expectations

Thai Union Group reported a core profit of Bt1.5 billion for 3Q24, flat yoy and qoq, aligning with expectations. The better EBT was offset by higher tax expenses following the divestment of Red Lobster. A slight qoq increase in 4Q24 earnings is anticipated.

Financial Highlights:

• Revenue: Bt34.8 billion, up 2.7% yoy but down 1.3% qoq.
• Gross Profit: Bt6.8 billion, up 9.0% yoy and 4.0% qoq.
• Net Profit: Bt1.4 billion, up 16.1% yoy and 14.9% qoq.
• Gross Margin: 19.5%.
• Net Profit Margin: 4.0%.

We maintain a BUY rating with a target price of Bt18.00, expecting core earnings to grow 12.5% yoy in 2024.

Bangkok Chain Hospital (BCH TB)

3Q24 Results Preview: Modest Yoy Growth

Bangkok Chain Hospital is expected to report a net profit of Bt451 million for 3Q24, up 2.3% yoy and 62.7% qoq. The increase in outpatient department (OPD) patients during the rainy season and decent growth in revenue from Thai and social security patients are key contributors. The new cancer center is also expected to start contributing from 4Q24 onwards.

Financial Highlights:

• Revenue: Bt3.3 billion, up 4% yoy and 16% qoq.
• Gross Profit: Bt1.0 billion, down 3% yoy but up 40% qoq.
• Net Profit: Bt451 million, up 2% yoy and 63% qoq.
• Gross Margin: 31.5%.
• Net Profit Margin: 13.7%.

We maintain a BUY rating with a target price of Bt20.00, optimistic about the reduction in referral costs and positive development in the complex treatment fee.

Central Plaza Hotel (CENTEL TB)

3Q24 Results Preview: Slight Positives

Central Plaza Hotel is expected to report a net profit of Bt109 million for 3Q24, up 52.2% yoy but down 35.2% qoq. Strong hotel performances in Bangkok and Osaka are key contributors. The pre-opening expense of two new hotels has been revised down, providing a slight positive impact.

Financial Highlights:

• Revenue: Bt5.5 billion, up 5.2% yoy but down 1.0% qoq.
• Gross Profit: Bt2.2 billion, up 7.1% yoy but down 0.9% qoq.
• Net Profit: Bt109 million, up 47.2% yoy but down 35.2% qoq.
• Gross Margin: 40.8%.
• Net Profit Margin: 2.0%.

We maintain a SELL rating with a target price of Bt47.00, citing a gloomy growth outlook and high expenses in 4Q24.

CH Karnchang (CK TB)

3Q24 Results Preview: Yoy and qoq Growths Expected

CH Karnchang is expected to report a net profit of Bt955 million for 3Q24, up 49% yoy and 96% qoq. The growth is driven by increased equity income, especially from CK Power (CKP). Despite limited near-term catalysts, the company’s strong backlog supports a positive earnings outlook.

Financial Highlights:

• Revenue: Bt9.2 billion, up 3.2% yoy and flat qoq.
• Operating EBIT: Bt220 million, up 1.1% yoy but down 5.2% qoq.
• Net Profit: Bt955 million, up 49.0% yoy and 95.8% qoq.
• Gross Margin: 7.0%.
• Net Profit Margin: 10.4%.

We maintain a BUY rating with a target price of Bt26.50, based on 1.6x 2024F P/B, optimistic about the company’s robust backlog and growth potential.

Minor International (MINT TB)

3Q24 Results Preview: Strong Yoy Growth in Core Profit

Minor International is expected to report a core profit of Bt2.5 billion for 3Q24, up 11.0% yoy. The key drivers are robust hotel performances in Europe and Thailand. The company is actively controlling costs and adapting strategies to cope with the dynamic outlook in China.

Financial Highlights:

• Revenue: Bt41.8 billion, up 5.1% yoy but down 4.5% qoq.
• EBITDA: Bt11.1 billion, up 2% yoy but down 11% qoq.
• Net Profit: Bt469 million, down 78% yoy and 83% qoq.
• Gross Margin: 46.0%.
• Net Profit Margin: 1.1%.

We maintain a BUY rating with a target price of Bt38.00, citing MINT’s adaptability and active cost-saving strategies as key strengths.