bua_tuf@tb_101414_63923

7/27/2019 BUA_TUF@TB_101414_63923

http://slidepdf.com/reader/full/buatuftb10141463923 1/7

See disclaimer at the end of report

COMPANY UPDATE

Thai Union Frozen

Products TUF TB / TUF.BK 14 October 2014

Insights into 3Q14—earningsrecovery in play

Sector: Food Neutral

Rating: BUY

Target Price: Bt88.50

Price (13 October 2014): Bt72.50

Price chart

Investment thesis

Following the analyst meeting, we expect TUF’s earnings recovery to

continue playing out through 2H14 (YoY and HoH growth), led by

fatter branded tuna margins, greater Thai shrimp profitability and a

turnaround at USPN. There may be scope for upside to our forecast if

the firm acquires a new food company in FY15. BUY!

Insights into 3Q14—the YoY and QoQ core profit jumps

We estimate a Bt1.85bn net profit for 3Q14, up by 84% YoY and 22%

QoQ. Stripping out FX, core earnings would be Bt1.75bn, up by 94%

YoY and 27% QoQ. During the quarter, TUF reversed an accrued

interest expense provision amounting to Bt215m (which had been

booked in 2Q14) because a holder of a big tranche of convertible

bonds (CBs) exercised its call option to convert them into 45.36m

shares at Bt52.91/share. Hence, interest expenses would have fallen

in 3Q14. In the absence of CB conversion, our core profit estimate

would be Bt1.54bn for 3Q14, up 70% YoY but down 4% QoQ.

The expected YoY core profit jump is due to fatter GM for branded

tuna margin (led by the low tuna pricing environment in 1H14 and

sales price increases for branded EU tuna products since early 2014),

greater OEM sales volume, thanks to more promotional activities,

fatter shrimp margin as a result of a higher proportion of value-added

shrimp products in the sales mix and break-even at USPN. The

estimated QoQ rise was led by high season and break-even at USPN.

GM should have risen to 16.7% in 3Q14 from 13.9% in 3Q13 and

16.1% in 2Q14.

Tuna price volatility in 3Q14—not much of a concern

Because of the greater proportion of branded tuna in the sales mix

(~60% of TUF’s tuna sales), we believe that the 4Q14 blended tuna

margin will be sustained, despite raw tuna price volatility during 3Q14.

Branded tuna margin is supported by the low tuna pricing environment

that prevailed through 1H14. Note that there is a 4- to 6-month time

lag between a change in the cost of raw tuna and branded tuna GM

rising or falling. The 3Q14 raw tuna price volatility might squeeze

OEM tuna margin in 4Q14, as there may be stock losses on high-

priced inventory, but we believe that fatter branded margin will

outweigh the effect of slimmer OEM margin for the quarter.

The raw tuna price looks set to be low in the US$1,000-1,400/tonne

range during 4Q14, due to colder weather in major fishing grounds

(which causes tuna to swim nearer the surface, making them easier tocatch) and an expanded global fishing fleet. Hence, we expect a fatter

branded tuna margin in 1H15.

0

50

100

150

200

1

21

41

61

81

10/13 12/13 02/14 04/14 06/14 08/14 10/14

Price Rel. to SETBt Rel. Idx

Share price perf. (%) 1M 3M 12M

Relative to SET 5.9 9.8 29.2

Absolute 3.6 10.7 34.9

Key statistics

Market cap Bt83.2bn USD2.6bn

12-mth price range Bt55.0/Bt75.0

12-mth avg daily volume Bt183m USD5.7m

# of shares (m) 1,148

Est. free float (%) 60.3

Foreign limit (%) 45.0

Consensusrating

BLS Target pricevs. Consensus

BLS earningsvs. Consensus

03

97

020406080

100

1

Buy

%

HoldSell

75.0

80.0

85.0

90.0

BLS Cons.BLS Cons.

Bt

0

2000

4000

6000

8000

14E 15E

BLS Cons.Btm

Financial summary

FY Ended 31 Dec 2013 2014E 2015E 2016E

Revenues (Btm) 112,813 123,494 142,564 153,013

Net profit (Btm) 2,853 5,494 6,484 6,877

EPS (Bt) 2.49 4.69 5.43 5.76

EPS grow th (%) -43.3% +88.8% +15.8% +6.1%

Core profit (Btm) 2,186 5,058 5,984 6,377

Core EPS (Bt) 1.90 4.32 5.02 5.35Core EPS growth (%) -55.7% +126.9% +16.1% +6.6%

PER (x) 24.8 15.4 13.3 12.6

PBV (x) 1.6 1.8 1.7 1.6

Dividend (Bt) 1.5 2.8 3.3 3.5

Dividend yield (%) 2.4 3.9 4.5 4.8

ROE (%) 7.4 13.4 14.7 14.7

CG rating

Prasit Sujiravorakul

Securities Fundamental Investment Analyst

[email protected]+66 2 618 1342

7/27/2019 BUA_TUF@TB_101414_63923


TUF - 2

TUF : Financial Tables – Year

PROFIT & LOSS (Btm) 2012 2013 2014E 2015E 2016ERevenue 106,698 112,813 123,494 142,564 153,013

Cost of sales and services (90,336) (98,590) (105,963) (122,638) (132,056)

Gross profit 16,362 14,222 17,532 19,926 20,957

SG&A , , , , ,EBIT 6,869 3,988 6,853 7,731 8,119Interest expense (1,708) (1,655) (1,445) (1,252) (1,142)

Other income/exp. 485 798 949 1,090 1,167

EBT 5,646 3,131 6,357 7,569 8,144Corporate tax 5 , ,

After-tax net profit (loss) 5,312 2,636 5,531 6,510 6,922Minority interest (778) (626) (665) (748) (783)

Equity earnings from affiliates 70 176 192 222 238

Extra items 90 667 436 500 500

Net profit (loss) 4,694 2,853 5,494 6,484 6,877Reported EPS . . . 5. 5.7

Fully diluted EPS 4.09 2.49 4.60 5.43 5.76

Core net profit 4,604 2,186 5,058 5,984 6,377Core EPS 4.30 1.90 4.32 5.02 5.35

EBITDA 9,520 6,311 9,368 10,470 11,090

KEY RATIOS

Revenue growth (%) . . . . .Gross margin (%) 15.3 12.6 14.2 14.0 13.7EBITDA margin (%) 8.9 5.6 7.6 7.3 7.2Operating margin (%) 6.4 3.5 5.5 5.4 5.3

Net margin (%) 4.4 2.5 4.4 4.5 4.5

Core profit margin (%) . . . . .

ROA (%) 5. . 5. 5.7 5.

ROCE (%) 6.8 3.6 6.5 7.4 7.8

Asset turnover (x) 1.2 1.1 1.1 1.3 1.3

Current ratio (x) 1.4 1.2 1.2 1.1 1.1

Gearing ratio (x) 0.8 0.9 0.8 0.7 0.6

Interest coverage (x) . . . . .

BALANCE SHEET (Btm)Cash & Equivalent 1,400 3,214 3,288 2,733 2,738

Accounts receivable 11,918 13,948 14,210 15,623 15,930

Inventory 33,290 36,917 34,837 36,959 35,094

PP&E-net 7, , 7 ,5 ,5 ,Other assets , , 7,7 , ,5

Total asse ts 94,759 108,290 109,751 117,676 119,657 Accounts payable 10,545 9,802 10,741 14,784 16,281

ST debts & current portion 23,410 33,452 31,980 32,469 31,242

Long-term debt 9,159 6,885 7,191 5,286 2,391

Other liabilities 7, , , 5 , 7 ,7

Total liabilities 54,415 64,943 62,581 67,164 65,611Paid-up capital 1,148 1,148 1,165 1,165 1,165

Share premium 17,501 17,501 18,443 18,443 18,443

Retained earnings 17,820 18,836 21,034 23,627 26,378

Shareholders equity 37,215 39,536 42,694 45,287 48,038Minority interests , , , , ,

Total Liab.&Shareholders' equity 94,759 108,290 109,751 117,676 119,657

CASH FLOW (Btm)Net income 4,694 2,853 5,494 6,484 6,877

Depreciation and amortization 2,651 2,323 2,516 2,740 2,971

Change in w orking capital (5,242) (6,399) 2,757 507 3,055

FX, non-cash adjustment & others , 5, 5 7

Cash flows from operating activitie 4,451 3,871 10,798 10,071 13,121Capex ( Invest) /Divest (3,647) (4,227) (3,626) (3,737) (3,852)

Others (138) (1,772) (3,984) (2,027) (1,619)

Cash flows from investing activitie (3,785) (5,999) (7,610) (5,764) (5,471)Debt financing (repayment) , , ,

Equity f inancing ,

Dividend payment (1,884) (1,836) (3,296) (3,890) (4,126)

Others (138) (1,772) (3,984) (2,027) (1,619)

Cash flow s from f inancing activitie (168) 2,348 (3,002) (4,806) (7,749)Net change in cash 498 221 186 (499) (99)

Free cash flow (Btm) 804 (356) 7,171 6,334 9,269

FCF per share (Bt) 0.7 (0.3) 6.0 5.3 7.8

Key ass umptions 2012 2013 2014E 2015E 2016ESales volume - tuna loin (tonnes) 8,455 13,588 13,996 14,416 14,848

Sales volume - canned tuna (tonnes) 291,051 280,436 288,849 297,515 306,440

Sales volume - frozen shrimp (tonnes) , , , , ,

Avg. selling price - tuna loin (US$/tonne) , , , , ,

Avg. selling price - canned tuna (US$/to 3,271 3,824 3,977 4,176 4,384 Avg. selling price - f rozen shr imp (US$/t 10,192 12,046 12,528 13,154 13,812

1.01.11.11.21.21.31.31.4

0

10

20

30

40

10 11 12 13 14E 15E 16E

Revenue growth (%) (LHS)

Asset turnover (x) (RHS)

% x

0

1020

30

40

50

60

10 11 12 13 14E 15E 16E

AR / Sales (days)

AP / Cost of Goods (days)

days

0

5

10

15

20

10 11 12 13 14E 15E 16E

Gross margin (%)

EBIT margin (%)%

0

5

10

15

20

25

0

1

2

3

4

5

10 11 12 13 14E 15E 16E

Capex (Bt,bn)

Capex / Net PPE (%)Bt,bn %

0

2

4

6

810

10 11 12 13 14E 15E 16E

(ST debt + Interest) / EBITDA

(Debt + Interest) / EBITDA

x

1.60 1.56

2.10

1.49

2.823.26 3.46

0

10

20

30

40

50

60

70

0.00.51.01.52.0

2.53.03.54.0

10 11 12 13 14E 15E 16E

Dividend (Bt)

Payout ratio (%)Bt/Shr %

Revenue growth and asset turnover

A/C receivable & A/C payable days

Profit margins

Capital expenditure

Debt serviceability

Dividend payout

7/27/2019 BUA_TUF@TB_101414_63923


TUF - 3

TUF : Financial Tables – Quarter

QUARTERLY PROFIT & LOSS (Btm) 2Q13 3Q13 4Q13 1Q14 2Q14

Revenue 28,119 29,464 30,788 27,948 30,258

Cost of sales and services (24,623) (25,379) (26,812) (23,791) (25,373)

Gross profit 3,496 4,085 3,976 4,158 4,885

SG&A (2,538) (2,591) (2,864) (2,715) (2,848)

EBIT 959 1,494 1,112 1,443 2,037Interest expense (365) (406) (521) (474) (574)

Other income/exp. 151 168 253 207 219

EBT 744 1,257 845 1,176 1,682

Corporate tax (157) (266) 28 (302) (158)

Af ter-tax net prof it (loss) 587 991 873 874 1,524

Minority interest (39) (150) (356) (154) (189)

Equity earnings from af f iliates 48 60 48 39 46

Extra items (237) 103 250 190 141

Net profit (loss) 359 1,004 815 950 1,522

Reported EPS 0.31 0.87 0.71 0.83 1.33

Fully diluted EPS 0.31 0.87 0.71 0.83 1.33

Core net profit 596 901 565 759 1,381

Core EPS 0.52 0.79 0.49 0.66 1.20

EBITDA 1,500 2,087 1,788 2,039 2,656

KEY RATIOSGross margin (%) 12.4 13.9 12.9 14.9 16.1

EBITDA margin (%) 5.3 7.1 5.8 7.3 8.8

Operating margin (%) 3.4 5.1 3.6 5.2 6.7

Net margin (%) 1.3 3.4 2.6 3.4 5.0

Core profit margin (%) 2.1 3.1 1.8 2.7 4.6

BV (Bt) 35.6 36.5 37.8 38.6 38.7

ROE (%) 3.9 10.6 8.2 9.4 14.9

ROA (%) 1.4 3.9 3.0 3.4 5.5

Current ratio (x) 1.3 1.2 1.2 1.5 1.3

Gearing ratio (x) 1.0 1.0 1.0 1.0 1.0

Interest coverage (x) 2.6 3.7 2.1 3.0 3.5

QUARTERLY BALANCE SHEET (Btm )

Cash & Equivalent 1,610 1,552 3,214 8,460 8,385

Accounts receivable 14,754 13,055 13,948 13,284 14,859Inventory 34,637 36,181 36,917 34,464 33,885

PP&E-net 21,229 21,804 21,473 21,354 21,318

Other assets 27,907 28,898 31,273 30,862 30,862

Total assets 101,763 103,135 108,290 110,099 110,789

Accounts payable 10,300 10,891 9,802 9,203 11,180

ST debts & current portion 29,689 32,278 33,452 27,449 29,292

Long-term debt 11,517 7,955 9,598 17,664 14,847

Other liabilities 7,508 8,354 8,414 8,277 7,956

Total liabilities 60,887 61,275 64,943 65,777 66,323

Paid-up capital 1,148 1,148 1,148 1,148 1,148

Share premium 17,501 17,501 17,501 17,501 17,501

Retained earnings 17,706 18,021 18,836 19,778 20,280

Shareholders equity 37,172 37,984 39,536 40,411 40,816

Minority interests 3,704 3,876 3,811 3,911 3,649

Total Liab.&Shareholders' equity 101,763 103,135 108,290 110,099 110,789

Key statistics 2Q13 3Q13 4Q13 1Q14 2Q14

Sales volume - tuna (tonnes) 78,073 76,276 73,990 75,286 81,286

Sales volume - frozen shrimp (tonnes) 17,138 17,317 17,811 12,302 13,496

Sales volume - shrimp feed (tonnes) 27,909 28,453 22,622 17,403 22,143

Avg. selling price - tuna (US$/tonne) 176,574 182,996 183,726 178,850 181,871

Avg. selling price - frozen shrimp (US$/t 331,608 391,970 441,824 478,756 460,020

Avg. selling price - s hrimp feed (US$/ton 32,377 32,387 32,594 31,539 32,471

100

2436

71

100

17

45

0

20

40

60

80

100

120

0

1,000

2,000

3,000

4,000

5,000

4Q12 2Q13 4Q13 2Q14

Accum. Profit (Bt,m)% of FY Profit

Bt,m%

0

1

2

3

4

5

67

8

4Q12 2Q13 4Q13 2Q14

FY EBIT margin (%)

EBIT margin (%)

%

(5)

0

5

10

15

20

0

5

10

15

20

25

30

35

4Q12 2Q13 4Q13 2Q14

Revenue (Bt,bn) (LHS)

Revenue growth (% YoY)

Bt,bn %

100

22

47

73

100

23

47

0

20

40

60

80

100

120

0

20

40

60

80

100

120

4Q12 2Q13 4Q13 2Q14

Accum. Revenue (Bt,bn)

% of FY RevenueBt,bn %

02468

1012141618

4Q12 2Q13 4Q13 2Q14

FY GPM (%)

Gross margin (%)%

Revenue trend

Revenue trend (accumulated)

Net profit trend (accumulated)

EBIT margin

Gross profit margin

Company profile

Thai Union Frozen Products (TUF) is a leading producer and exporter of frozen and canned seafood. It has 18 subsidiaries—nine domesticand nine overseas—and six affiliates to cater to its expansion and integration plans. Its product range includes tuna loin, canned tuna,frozen shrimp, canned pet food, canned seafood, cephalopod, canned sardines and mackerel and shrimp feed. As of 2Q14, tuna and

frozen shrimp represented the largest contributors—53% and 21%, respectively, of consolidated sales.

7/27/2019 BUA_TUF@TB_101414_63923


TUF - 4

Figure 1: WPO and EPO skipjack tuna prices Figure 2: Skipjack, Yellowfin and Albacore tuna prices

WPO Sep =1,280

-

250

500

750

1,000

1,250

1,500

1,750 2,000

2,250

2,500

2,750

J a n - 0 6

A p r - 0 6

J u l - 0 6

O c t - 0 6

J a n - 0 7

A p r - 0 7

J u l - 0 7

O c t - 0 7

J a n - 0 8

A p r - 0 8

J u l - 0 8

O c t - 0 8

J a n - 0 9

A p r - 0 9

J u l - 0 9

O c t - 0 9

J a n - 1 0

A p r - 1 0

J u l - 1 0

O c t - 1 0

J a n - 1 1

A p r - 1 1

J u l - 1 1

O c t - 1 1

J a n - 1 2

A p r - 1 2

J u l - 1 2

O c t - 1 2

J a n - 1 3

A p r - 1 3

J u l - 1 3

O c t - 1 3

J a n - 1 4

A p r - 1 4

J u l - 1 4

WPO price EPO price

(US$/tonne)

EPO Sep =1,633

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

J a n - 0 6

A p r - 0 6

J u l - 0 6

O c t - 0 6

J a n - 0 7

A p r - 0 7

J u l - 0 7

O c t - 0 7

J a n - 0 8

A p r - 0 8

J u l - 0 8

O c t - 0 8

J a n - 0 9

A p r - 0 9

J u l - 0 9

O c t - 0 9

J a n - 1 0

A p r - 1 0

J u l - 1 0

O c t - 1 0

J a n - 1 1

A p r - 1 1

J u l - 1 1

O c t - 1 1

J a n - 1 2

A p r - 1 2

J u l - 1 2

O c t - 1 2

J a n - 1 3

A p r - 1 3

J u l - 1 3

O c t - 1 3

J a n - 1 4

A p r - 1 4

J u l - 1 4

Skipjack

Yellowfin

Albacore

(US$/tonne)

AlbacoreSep =3,000

Yellowfin Sep

= 2,400

SkipjackSep =1,280

Source: Company data

Source: Company data

Figure 3: Daily shrimp price—40 counts/kg Figure 4: Daily shrimp price—70 counts/kg

110

125

140

155

170

185

200

215

230

245

260

275

290

305

320

O c t - 0 8

J a n - 0 9

A p r - 0 9

J u l - 0 9

O c t - 0 9

J a n - 1 0

A p r - 1 0

J u l - 1 0

O c t - 1 0

J a n - 1 1

A p r - 1 1

J u l - 1 1

O c t - 1 1

J a n - 1 2

A p r - 1 2

J u l - 1 2

O c t - 1 2

J a n - 1 3

A p r - 1 3

J u l - 1 3

O c t - 1 3

J a n - 1 4

A p r - 1 4

J u l - 1 4

O c t - 1 4

(Bt/kg)Oct 13 = Bt215/kg

Shrimp price - 40 counts/kg

85

105

125145

165

185

205

225

245

265

285

305

O c t - 0 8

J a n - 0 9

A p r - 0 9

J u l - 0 9

O c t - 0 9

J a n - 1 0

A p r - 1 0

J u l - 1 0

O c t - 1 0

J a n - 1 1

A p r - 1 1

J u l - 1 1

O c t - 1 1

J a n - 1 2

A p r - 1 2

J u l - 1 2

O c t - 1 2

J a n - 1 3

A p r - 1 3

J u l - 1 3

O c t - 1 3

J a n - 1 4

A p r - 1 4

J u l - 1 4

O c t - 1 4

(Bt/kg)

Oct 13 = Bt200/kg


Source: www.oae.go.th Source: www.oae.go.th

Figure 5: Monthly shrimp price—40 counts/kg Figure 6: Monthly shrimp price—60 counts/kg

Sep =Bt225/kg

-

50

100

150

200

250

300

J a n - 0 8

A p r - 0 8

J u l - 0 8

O c t - 0 8

J a n - 0 9

A p r - 0 9

J u l y - 0 9

O c t - 0 9

J a n - 1 0

A p r - 1 0

J u l y - 1 0

O c t - 1 0

J a n - 1 1

A p r - 1 1

J u l - 1 1

O c t - 1 1

J a n - 1 2

A p r - 1 2

J u l y - 1 2

O c t - 1 2

J a n - 1 3

A p r - 1 3

J u l y - 1 3

O c t - 1 3

J a n - 1 4

A p r - 1 4

J u l y - 1 4


-

50

100

150

200

250

300

J a n - 0 8

A p r - 0 8

J u l - 0 8

O c t - 0 8

J a n - 0 9

A p r - 0 9

J u l y - 0 9

O c t - 0 9

J a n - 1 0

A p r - 1 0

J u l y - 1 0

O c t - 1 0

J a n - 1 1

A p r - 1 1

J u l - 1 1

O c t - 1 1

J a n - 1 2

A p r - 1 2

J u l - 1 2

O c t - 1 2

J a n - 1 3

A p r - 1 3

J u l y - 1 3

O c t - 1 3

J a n - 1 4

A p r - 1 4

J u l y - 1 4


Sep = Bt220/kg

Source: www.oae.go.th Source: www.oae.go.th

7/27/2019 BUA_TUF@TB_101414_63923


TUF - 5

Figure 7: 3Q14 earnings preview

3Q14E 3Q13 % YoY 2Q14 % QoQ 9M14E 9M13 % YoY

Sales 31,821 29,464 8.0 30,258 5.2 90,028 82,025 9.8

Cost of sales (26,507) (25,379) 4.4 (25,373) 4.5 (75,671) (71,778) 5.4

Gross profit 5,314 4,085 30.1 4,885 8.8 14,357 10,246 40.1

SG&A (3,087) (2,591) 19.1 (2,848) 8.4 (8,650) (7,370) 17.4

EBIT 2,227 1,494 49.1 2,037 9.3 5,707 2,876 98.5

Interest expense (165) (406) (59.3) (574) (71.3) (1,214) (1,134) 7.0

Other income/exp. 230 168 36.8 219 5.0 656 545 20.5

EBT 2,292 1,257 82.4 1,682 36.3 5,150 2,286 125.2

Corporate tax (344) (266) 29.4 (158) 118.3 (803) (523) 53.7

After-tax profit 1,949 991 96.6 1,524 27.8 4,347 1,764 146.5

Minority interest (250) (150) 67.0 (189) 32.0 (593) (270) 119.7

Equity earnings 51 60 (14.6) 46 9.9 136 127 7.1

Extra items & FX 100 103 (2.8) 141 (28.8) 431 417 3.4 Net profit 1,850 1,004 84.2 1,522 21.6 4,321 2,038 112.1

Reported EPS 1.61 0.87 84.2 1.33 21.6 3.77 1.78 112.1

Fully diluted EPS 1.61 0.87 84.2 1.33 21.6 3.77 1.78 112.1

Core net profit 1,750 901 94.1 1,381 26.7 3,890 1,621 140.0

Core EPS 1.52 0.79 94.1 1.20 26.7 3.39 1.41 140.0

EBITDA 2,857 2,087 36.9 2,656 7.6 7,553 4,523 67.0

Gross margin (%) 16.7 13.9 16.1 15.9 12.5

EBITDA margin (%) 9.0 7.1 8.8 8.4 5.5

Operating margin (%) 7.0 5.1 6.7 6.3 3.5

Net margin (%) 5.8 3.4 5.0 4.8 2.5Core profit margin (%) 5.5 3.1 4.6 4.3 2.0

3Q14 3Q13 % YoY 2Q14 % QoQ 9M14 9M13 % YoY

Tuna price (US$/tonne)

- WPO 1,560 1,868 (16.5) 1,473 5.9 1,419 2,082 (31.8)

- IDO 1,567 2,017 (22.3) 1,265 23.8 1,313 2,172 (39.6)

- EPO 1,633 2,050 (20.3) 1,433 14.0 1,494 2,161 (30.8)

Shrimp (Bt/kg)

- 40 pieces/kg 225 243 (7.5) 243 (7.5) 249 214 16.6

- 60 pieices/kg 220 233 (5.7) 237 (7.0) 242 204 18.8

Sources: Company data, Bualuang Research estimates

7/27/2019 BUA_TUF@TB_101414_63923


TUF - 6

Sector comparisons

B lo omberg P rice M a rket C ap

Code ( local curr. )(US$

equivalent) 2014E 2015E 2014E 2015E 2014E 2015E 2014E 2015E 2014E 2015E

Seafresh Industry CFRESH TB THB9.05 129 9.6 8.6 n.m. 11.7 2.5 2.1 31.3 27.4 4.2 4.7

Charoen Pokphand Foods CPF TB THB32.00 7,645 19.4 15.0 81.2 29.3 1.8 1.7 11.4 13.9 2.8 3.7

GFPT GFPT TB THB20.40 789 13.6 10.8 25.1 26.1 2.9 2.4 23.4 24.9 2.2 2.8

Khon Kaen Sugar Industry KSL TB THB13.00 670 12.0 10.1 21.8 18.9 1.4 1.3 15.9 17.2 3.7 4.3

Thai Union Frozen Products TUF TB THB72.50 2,567 15.7 13.3 85.2 18.0 1.8 1.7 13.4 14.7 3.9 4.5

Thai Vegetable Oil TVO TB THB22.10 551 12.1 12.7 53.8 -4.6 2.5 2.3 21.3 19.4 6.2 5.9

Simple average 13.7 11.8 53.4 16.6 2.2 1.9 19.5 19.6 3.8 4.3

PER (x) EPS Growth (%) PBV (x) ROE (%) Div Yield (%)

PER band versus SD (next 12 months)

PBV band versus SD (next 12 months)

0

5

10

15

20

25

30

YE01 YE03 YE05 YE07 YE09 YE11 YE13 YE15

x

-2.0 SD = 1.94x

+2.0 SD = 20.60x

+3.0 SD = 25.26x

LT-average = 11.27x

-1.0 SD = 6.61x

+1.0 SD = 15.94x

0.1

0.6

1.1

1.6

2.1


+2.0 SD = 2.17x

-1.0 SD = 1.17x

+1.0 SD = 1.84x

x

LT-average = 1.50x

-2.0 SD = 0.84x

PER band and share price

PBV band and share price

0

10

20

30

40

50

60

70

80

90


Bt/share

7x

9x

11x

13x

15x

5x

0

20

40

60

80

100

120


Bt/share

2.6x

2.1x

1.7x

1.4x

1.1x

0.8x

Foreign holding Management trading activities during past six months

46.6

0

10

20

30

40

50

5/14 6/14 7/14 8/14 9/14 10/14

TUF Food%

-10.0

-5.0

0.0

5.0

10.0

5/14 6/14 7/14 8/14 9/14 10/14

Buy

Sell

Btm

7/27/2019 BUA_TUF@TB_101414_63923


TUF - 7

Bualuang Securities Public Company Limited

BUALUANG SECURITIES PUBLIC COMPANY LIMITED (BLS) is a subsidiary of BANGKOK BANK PUBLIC COMPANY LIMITED (BBL). This document

is produced based upon sources believed to be reliable but their accuracy, completeness or correctness is not guaranteed. The statements or

expressions of opinion herein were arrived at after due and careful consideration to use as information for investment. Expressions of opinion containedherein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell

any securities. The use of any information shall be at the sole discretion and risk of the user.

BUALUANG SECURITIES PUBLIC COMPANY LIMITED MAY BE IN RELATIONSHIP WITH THE SECURITIES IN THIS REPORT. “Opinions,

projections and other information contained in this report are based upon sources believed to be accurate including the draft prospectus, but no

responsibility is accepted for any loss occasioned by reliance placed upon the contents hereof. Bualuang Securities Public Company Limited may from

time to time perform investment, advisory or other services for companies mentioned in this report, as well as dealing (as principal or otherwise) in, or

otherwise being interested in, any securities mentioned herein, This report does not constitute a solicitation to buy or sell any securities”. Investors

should carefully read details in the prospectus before making investment decision.

BUALUANG SECURITIES PUBLIC COMPANY LIMITED MAY ACT AS MARKET MAKER AND ISSUER OF DWs, AND ISSUER OF STRUCTURED

NOTES ON THESE SECURITIES. The company may prepare the research reports on those underlying securities. Investors should carefully read the

details of the derivative warrants and structured notes in the prospectus before making investment decisions.

BUALUANG SECURITIES PUBLIC COMPANY LIMITED IS OR MAY BE A UNDERWRITER/CO-UNDERWRITER/JOINT LEAD IN RESPECT OF THE

INITIAL PUBLIC OFFERING (“IPO”) OF SECURITIES.

Financial AdvisorLead underwriter/

Underwriter/Co-underwriter

TSE BA, BGH, TSE

Score Range Score Range Description

90 – 100 Excellent

80 – 89 Very Good

70 – 79 Good60 – 69 Satisfactory

50 – 59 Pass

Below 50 No logo given N/A

CORPORATE GOVERMANCE REPORT DISCLAIMER

This research report was prepared by Bualuang Securities Public Company Limited and refers to research prepared by Morgan Stanley. Morgan Stanley

does not warrant or guarantee the accuracy or completeness of its research reports. Morgan Stanley reserves copyright and other proprietary rights in

the material reproduced in this report. Morgan Stanley is under no obligation to inform Bualuang Securities or you if the views or information referred to

or reproduced in this research report change.

Corporate Governance Report disclaimer

The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy

of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the StockExchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The

result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not base on inside information.

The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be

changed after that date. Bualuang Securities Public Company Limited does not conform nor certify the accuracy of such survey result.

BUALUANG RESEARCH – RECOMMENDATION FRAMEWORK

STOCK RECOMMENDATIONS

BUY: Expected positive total returns of 15% or more over the next 12

months.

HOLD: Expected total returns of between -15% and +15% over the next 12

months.

SELL: Expected negative total returns of 15% or more over the next 12

months.TRADING BUY: Expected positive total returns of 15% or more over the next

3 months.

SECTOR RECOMMENDATIONS

OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is

expected to outperform the relevant primary market index over the next 12 months.

NEUTRAL: The industry, as defined by the analyst's coverage universe, is

expected to perform in line with the relevant primary market index over the next 12

months.

UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, isexpected to underperform the relevant primary market index over the next 12

months.

DISCLAIMER

bua_tuf@tb_101414_63923

Documents