tmn141211

8/10/2019 TMN141211

1/10Please note that due to the interest of timeliness, this product was not edited.

ThanachartsMo

rningNote

THAILANDsTOP LOCAL KNOWLEDGE Thursday, December 11, 2014

Current Market Net trade SET Index vs MSCI Asia x JP

Market data Close %

SET Index 1,559.6 -1.0%

Turnover (Bt m) 55,408 -9.7%

Mkt Cap (Bt bn) 14,364 -1.0%

Stock Gainers 297 stocks

Stock Losers 523 stocks

Net trade (Bt bn) Prev. -1M YTD

Foreign -3.5 +9.2 -6.4

Retail +3.6 -13.7 -57.6

Institutes +1.2 +0.8 +49.2

Proprietary -1.2 +3.6 +14.8

450

500

550

600

650

1,0001,100

1,2001,3001,4001,5001,6001,700

Jan-13 Jun-13 Nov-13 Apr-14 Oct-14

(index)(index) SET index (LHS)

MSCI Asia x JP ( RHS)

TOP STORY

Siam Senses | Thailands next wave

The SET has performed well throughout the political turmoil and thecoup, running up by 20% YTD. At 1,560 SET level, there is only 12%potential upside to our 2015 year-end target of 1,750 and a lot ofstocks are already at high valuations. Siam Senses identifies new-wave stocks in this report, thus leading to major adjustments to ourportfolio.

Ad Hoc |SAMART (BUY) | Second earnings breakthrough

We recently met with management (President) and came away withgreater conviction in SAMARTs ability to post a second earningsbreakthrough to the Bt3bn profit mark in 2017, after reaching Bt1bn in2012. We see this driven by the governments digital economy policyand SAMARTs entry into the utility business. We lift our DCF-basedTP to Bt45.0; BUY.

Ad Hoc |SIM (SELL) | Lackluster growth

Rising smartphone market competition and higher MVNO businesslosses lead us to cut SIMs earnings by 11-24% for 2014-16F. Webelieve 3G migration benefits are over, with MVNO business not yet anew core business to boost SIMs earnings. With EPS growth of 6% in

2015F and 1% decline in 2016F, we downgrade SIM to SELL with anew TP of Bt3.0.

SAWAD (BUY) Cabinet approves nano-financing policy P.5

Lending limit is up to 120,000 baht while interest ceiling is 36%.This policy is to become effective from January 2015.SAWAD should be a prime beneficiary but this may take time.We see SAWAD as a super-growth stock with high ROE. BUY.

Market Valuation

Market data 2014F 2015F 2016F

PE (x) 17.3 14.7 13.1

Norm EPS growth (%) 1.5 16.4 11.8

EV/EBITDA (x) 10.6 9.3 8.6

P/BV (x) 2.3 2.1 1.9

Yield (%) 2.9 3.3 3.8

ROE (%) 14.6 15.8 16.3

Net D/E (x) 0.7 0.6 0.6Major Indices

Close %

Dow Jones 17,533 -268.0 -1.5%

NASDAQ 4,684 -82.4 -1.7%

FTSE 6,500 -29.4 -0.5%

SHCOMP (China) 2,940 83.7 2.9%

Hang Seng 23,525 38.7 0.2%

FTSSI (Singapore) 3,326 6.0 0.2%

KOSPI 1,946 -25.4 -1.3%

JCI (Indonesia) 5,165 43.1 0.8%

MSCI Asia 124 -1.2 -1.0%

MSCI Asia x JP 564 -0.4 -0.1%Currency /Bond data

Close %

Dollar index 88.3 -0.4 -0.5%

Bt/US$ 32.8 -0.1 -0.4%

100JPY/US$ 119.3 -0.6 -0.5%

10Y bond yield (TH) 2.9 0.0 -0.7%

10Y treasury yield (US) 2.2 0.0 -2.2%

Commodities

Close %

NYMEX (US$/bbl) 60.9 -2.9 -4.5%

BRENT (ICE) (US$/bbl) 64.2 -2.6 -3.9%

DUBAI (US$/bbl) 63.3 -0.1 -0.2%Baltic Dry Index 911.0 -22.0 -2.4%

GRM (US$/bbl) 7.7 -0.2 -1.9%

Gold (US$/oz) 1,229.4 -2.6 -0.2%

Coal (BJI)* 63.3 -1.4 -2.2%

HDPE-Naphtha 815.0 -10.0 -1.2%

Ethylene-Naphtha 555.0 -5.0 -0.9%

PX-Naphtha 365.0 30.0 9.0%

BZ-Naphtha 290.0 -12.5 -4.1%

Steel-HRC 470.0 -5.0 -1.1%

Rubber SICOM TSR20 1,433 -26.0 -1.8%

Rubber TOCOM 1,623 -39.3 -2.4%Raw Sugar** 15.4 0.1 0.8%

White Sugar** 18.1 0.1 0.4%

(US$/tonne)* (US$ cent/lb)**

Source: Thanachart , Bloomberg, Datastream, BanpuNote: * Weekly data

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Than

achartSecurities

THAILAND STRATEGY NOTE 11 DECEMBER 2014

Siam Senses

PIMPAKA NICHGAROON, CFA

Head of Research

662 617 [email protected]

Thailands next wave

The SET has performed well throughout the political turmoil and thecoup, running up by 20% YTD. At 1,560 SET level, there is only 12%

potential upside to our 2015 year-end target of 1,750 and a lot of stocks

are already at high valuations. Siam Sensesidentifies new-wave stocks

in this report, thus leading to major adjustments to our portfolio.

Our top-down view remains a new Thai era

Despite slower-than-expected economic pump-priming by the

government, Siam Senses remains a bull on the Thai market seeing

only a delayed rather than a failed recovery. We dont think the big

picture has changed and we still see a new Thai era involving: 1) a

stable political period for many years to come, 2) a kick-starting of a

period of economic sustainability with eventual implementation of the

countrys economic roadmap, including infrastructure spending and the

identification of new focus industries, and 3) a sharp drop in the risk of a

financial crisis induced by unsustainable, extreme populism that has led

to jumps in both public and household debt.

Hefty self-funding for multi-year economic cycle

As opposed to many emerging economies that rely on foreign money to

a large degree to fund their growth, we believe Thailand is in a far less

risky position regarding capital outflows during the Feds policy rate

reversal period. The country is heavily self-funded with only ~15% in

foreign bond holdings while having as much as 22% of GDP as excessliquidity in the form of BOT bonds that can be released into the system

if there are capital outflows. Together with an end to the extreme

populist period which used to cost the country 4-4.5% of GDP p.a., we

dont expect Thailand to have any problem in funding its multi-year

infrastructure-driven economic cycle. At the corporate level, Thai

companies are in a cycle of very strong cash flows and low debt.

Our way to play the SET in 2015

We dont believe sector fundamentals and outlook have changed much

from our view in 2H14 when we liked infrastructure, tourism, healthcare,

bank and renewable energy. The problem is that prices of key stocks in

those sectors have already performed very well, leaving limitedpotential upside. Our way to outperform the SET in 2015 is to reduce

exposure in those sectors while adding exposure in potential

turnaround sectors such as media and auto and bottom-up stock picks.

Next wave of stocks to invest in

The SET surged 20% YTD with many stocks up sharply, so we make

major changes to our portfolio. We remove AOT, BTS and EA because

of their significant outperformances over the past two years. The two

underperformers in our portfolio in 2014 have been BBL and KBS and

they are out on slower-than-expected business recoveries. We add

MAJORand RSgiven their successful strategies to stand out despite

the still weak media sector. We also add SAMART on its new businesswave that we see shifting up its earnings base. We add TISCO on a

bottoming out of the auto hire-purchase market and SAWADas play on

the markets untapped micro-financing demand.

Top Picks

EPS growth PE Yield

14F 15F 14F 15F 15F

(%) (%) (x) (x) (%)

BGH 19.6 17.1 38.7 33.1 1.5

CENTEL (3.7) 41.2 38.2 27.0 1.5

CK 42.6 8.8 35.4 32.5 1.5

KBANK 10.6 22.8 12.5 10.2 2.0

MAJOR * 20.3 19.6 23.1 19.3 4.7

RS * 11.1 98.7 38.7 19.5 3.6

SAMART * 12.0 20.9 22.1 18.3 3.0

SAWAD * 31.0 37.6 30.3 22.0 1.8

STEC 11.5 7.6 24.5 22.7 1.8

TISCO * (3.9) 9.7 8.5 7.8 5.1

Stocks taken out

AOT 21.1 20.9 33.8 28.0 1.4

BBL 3.5 14.3 10.2 8.9 3.8

BTS 13.4 1.7 53.8 52.9 6.7

EA 588.5 101.0 58.5 29.1 1.0KBS (16.1) 19.6 11.7 9.7 5.1

Source: Thanachart estimatesNote: * New additionFor BTS, financial year ends in March.Based on 8 December 2014 closing prices

Market Earnings Growth

34.9

2.7

19.9

11.2

1.5

16.411.8

0

10

20

30

40

2010

2011

2012

2013

2014F

2015F

2016F

(%) Market earnings growth

Sources: SET, Thanachart estimates

Market ROE

16.3

5

10

15

20

2007

2008

2009

2010

2011

2012

2013

2014F

2005F

2016F

(%) ROE

Sources: SET, Thanachart estimates

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11 DECEMBER 2014

Please see the important notice on the back page.

BUY (Unchanged) TP: Bt 45.00 (From: Bt 36.50)

Change in Numbers Upside: 22.4%

Samart Corporation Pcl(SAMART TB)

SIRIPORN ARUNOTHAI


Second earnings breakthrough

We recently met with management (President) and came away with greater

conviction in SAMARTs ability to post a second earnings breakthrough to

the Bt3bn profit mark in 2017, after reaching Bt1bn in 2012. We see this

driven by the governments digital economy policy and SAMARTs entry

into the utility business. We lift our DCF-based TP to Bt45.0; BUY.

Another big upward-earnings base shift

SAMART has enjoyed a profit breakthrough to the Bt1bn mark from 2012

onward on the back of the smartphone boom and hefty turnkey constructionof 3G infrastructure for TOT. We now foresee another big upward shift in

SAMARTs earnings base to the Bt3bn mark in 2017, or 89% above the

current years base, despite the maturing smartphone market. The earnings

boost should be driven by more ICT infrastructure and solutions work as a

result of the governments digital economy policy, SAMARTs entry into the

utility business and its expansion of service-based air traffic management

(ATM). To us, it is not just a matter of higher earnings, but also one of

earnings quality with recurring profit contribution from utility and ATM rising to

34% of total profit in 2017F (vs 13% in 2014F).

Plans to invest in waste-to-energy power plants

Entering the utilities business hasnt come out of the blue for SAMART. With

its experience in building electrical substations and transmission lines in

Thailand, running a 23-MW power plant in Cambodia as well as strong

relationships with governments, SAMART plans to invest in waste-to-energy

(WTE) power plants via its 100%-owned Samart U-Trans. We see SAMART

investing in four WTE projects with capacity of 7-10MW each. By using

Refuse Derived Fuel (RDF) technology, SAMART expects an investment

cost at Bt150m/MW and plans to hold a 70-80% stake in each project. The

first project is due to be announced in 1Q15 with commencement scheduled

for 4Q16. For its next step into a far bigger league (and not yet in our model),

SAMART plans to invest in a 1,000-MW clean coal power plant in Cambodia.

Beneficiary of governments digital economy policy

SAMART is the countrys top ICT infrastructure and solutions company via its70%-owned Samart Telecom (SAMTEL TB, not rated) and we therefore

expect it to be a beneficiary of the governments digital economy policy. We

estimate SAMARTs new project value of Bt5.4bn in 2014 (dropping from

Bt7.1bn in 2013 as a result of the political turmoil) to increase on pent-up

demand or delayed projects to Bt11.4bn in 2015 and Bt9.0bn in 2016, which

should boost SAMARTs earnings growth in both those years.

Adding Bt9.0 from 4 WTE plants to our TP; reiterate BUY

We revise up our earnings in 2017-25F by 20% on average to reflect 4 WTE

plants starting up from 4Q16F onward (average of Bt176m/plant in 2017F).

Despite the 5-7% cuts to our 2014-16F earnings on a weaker-than-expected

Samart i-Mobile (SIM TB) performance, we raise our DCF-based 12-month

TP to Bt45.0 from Bt36.50 to reflect its new utility business. We reiterate our

BUY on SAMART for its better quality and less volatile earnings that we also

forecast to offer a 3-year EPS CAGR of 24% in 2015-17. SAMART shares

are inexpensive, in our view, with a 2015F PE to 3-year EPS CAGR of 0.8x.

COMPANY VALUATION

Y/E Dec (Bt m) 2013A 2014F 2015F 2016F

Sales 22,315 26,008 27,866 29,319

Net profit 1,468 1,650 1,996 2,264

Consensus NP 1,758 2,099 2,439

Diff frm cons (%) (6.1) (4.9) (7.2)

Norm profit 1,468 1,650 1,996 2,264

Prev. Norm profit 1,741 2,156 2,418

Chg frm prev (%) (5.2) (7.4) (6.4)

Norm EPS (Bt) 1.5 1.6 2.0 2.2

Norm EPS grw (%) 34.9 12.0 20.9 13.4

Norm PE (x) 25.1 22.4 18.5 16.3

EV/EBITDA (x) 10.7 10.8 10.2 9.5

P/BV (x) 5.9 5.2 4.6 4.0

Div yield (%) 2.2 2.5 3.0 3.4

ROE (%) 25.1 24.6 26.2 26.1

Net D/E (%) 95.6 66.3 71.8 69.2

PRICE PERFORMANCE

(20)

020

406080100120

0

10

20

30

40

Dec-13 Apr-14 Aug-14 Dec-14

(%)(Bt/shr) SAMART

Rel to SET Index

COMPANY INFORMATION

Price as of 9-Dec-14 (Bt) 36.75

Market cap (US$ m) 1,122.6

Listed shares (m shares) 1,006.5

Free float (%) 55.5

Avg daily turnover (US$ m) 8.0

12M price H/L (Bt) 36.25/14.00

Sector ICT

Major shareholder Wilailuk family 26.1%

Sources: Bloomberg, Company data, Thanachart estimates

ThanachartAdHocResearch





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11 DECEMBER 2014

Please see the important notice on the back page.

SELL (From: HOLD) TP: Bt 3.00 (From: Bt 3.70)

Change in Recommendation Downside: -12.8%

Samart i-Mobile Pcl (SIM TB)

SIRIPORN ARUNOTHAI


Lackluster growth

Rising smartphone market competition and higher MVNO business losses

lead us to cut SIMs earnings by 11-24% for 2014-16F. We believe 3G

migration benefits are over, with MVNO business not yet a new core

business to boost SIMs earnings. With EPS growth of 6% in 2015F and

1% decline in 2016F, we downgrade SIM to SELL with a new TP of Bt3.0.

Earnings and TP cut; downgrade to SELL

We downgrade SIMs earnings by 11-24% for 2014-16F. Increasing

smartphone market competition leads us to cut our 2014-16 gross marginassumptions by 0.3-2.2 ppts to 21.8%, 21.5% and 21.5%. Meanwhile, the

delay to 3G phase II and heavy sales promotions by the three mobile

operators have also made SIMs Mobile Virtual Network Operator (MVNO)

business weaker than our expectation (see Exhibit 1). We lower our 12-

month DCF-based TP for SIM to Bt3.0 from Bt3.7. With our expectation for

SIM to see flat earnings growth over the next two years, we view its 16.2x

trading PE in 2015F as rich, and thus downgrade SIM to SELL from Hold.

Growth to cool over the next two years

We believe SIMs very impressive EPS growth of 81% in 2012 and 464% in

2013 is behind us, and we forecast only 8%, 6% and -1% in 2014-16. We

expect intensifying competition from China mobile imports and from existing

brands such as Samsung in the low-end handset market, rising subsidization of

mobile operators and a higher sales mix of low-margin smartphone sales volume

due to wider 3G service coverage in the provinces leading to a downtrend in

gross margin that we see outweighing the benefit from higher smartphone sales

volumes. We estimate SIMs average gross margin for its handset business to

drop from 24.2% in 2013 to 20.7%, 20.2% and 19.6% in 2014-16. Given the

already-high 2G to 3G migration rate of 80% in 3Q14, we also project SIMs

growth rate for smartphone sales volumes to drop to 30% in 2015 and 5% in

2016 (from 222% in 2013 and 85% in 2014).

MVNO business not a yet a new earnings booster

We project an improved performance of SIMs MVNO service for TOTs 3G

business on rising subscribers via bundling of packages with i-mobilehandsets sales and better economies of scale. However, given the limited

coverage of TOTs 3G service network with only 5,300 base stations for the

phase 0 and phase I investments, the delay to TOTs 3G phase II and heavy

sales promotions by the three large mobile operators, we forecast continued

losses from this business (after a Bt86m loss in 2013) of Bt61m in 2014 and

Bt34m in 2015 before turning positive at Bt55m in 2016.

Strong 4Q14F earnings but below expectation

We expect SIM to post 4Q14 earnings growth of 60% both y-y and q-q with

net profit of Bt243m, below its peak quarterly earnings in 2Q14. The growth

appears strong but is lower than our previous expectation given sluggish

domestic consumption which has not yet recovered in 4Q14. However, a bulk

sale of low-priced smartphones to Total Access Communication (DTAC TB)

amounting to 500,000 units, and sales of DTV set-top boxes and antenna

after DTV subsidy coupons were distributed to households from mid-October

this year should be the two core engines boosting earnings growth.

COMPANY VALUATION

Y/E Dec (Bt m) 2013A 2014F 2015F 2016F

Sales 10,239 12,822 13,520 13,016

Net profit 807 881 936 927

Consensus NP 1,014 1,171 1,372

Diff frm cons (%) (13.2) (20.1) (32.4)

Norm profit 807 881 936 927

Prev. Norm profit 986 1,145 1,225

Chg frm prev (%) (10.7) (18.3) (24.3)

Norm EPS (Bt) 0.2 0.2 0.2 0.2

Norm EPS grw (%) 464.2 8.0 6.0 (0.9)

Norm PE (x) 18.5 17.1 16.2 16.3EV/EBITDA (x) 16.0 16.1 14.7 14.5

P/BV (x) 4.8 4.2 3.8 3.5

Div yield (%) 3.2 3.5 3.7 3.7

ROE (%) 28.3 26.2 24.9 22.4

Net D/E (%) 61.6 92.8 72.0 42.9

PRICE PERFORMANCE

(25)

(20)(15)

(10)(5)0510

2.0

2.5

3.0

3.5

4.0

4.5

Dec-13 Apr-14 Aug-14 Dec-14

(%)(Bt/shr) SIM Rel to SET Index

COMPANY INFORMATION

Price as of 9-Dec-14 (Bt) 3.44

Market cap (US$ m) 459.4

Listed shares (m shares) 4,400.3

Free float (%) 15.3


12M price H/L (Bt) 3.96/2.72

Sector ICT

Major shareholder Samart Corp 70.0%

Sources: Bloomberg, Company data, Thanachart estimates






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THAILANDs TOP LOCAL KNOWLEDGE Thursday, December 11, 2014

THANACHARTSECURITIES 5

Srisawad Power 1979 Pcl (SAWAD TB) - BUY News Update

Sarachada Sornsong | Email: [email protected]

Chalida Tantriyanont, Assistant Analyst | Email: [email protected]

Cabinet approves nano-financing policy

Lending limit is up to 120,000 baht while interest ceiling is 36%.

This policy is to become effective from January 2015.

SAWAD should be a prime beneficiary but this may take time.

We see SAWAD as a super-growth stock with high ROE. BUY.

The cabinet recently approved six economic measures which are to becomeeffective from January 2015 onward.

One of the measures is to allow non-banks to conduct nano financing atlending limits not exceeding 120,000 baht per borrower. Meanwhile, the

ceiling interest rate is set at 36% p.a.

The purpose is to reduce the role of unsystemetic, overcharging loan sharks.

As one of the leading micro-financing plays with the most extensive branchcoverage, we see SAWAD as poised to benefit from this policy.

The ceiling interest rate for nano financing of 36% p.a. is also higher than the15% ceiling for personal loans that SAWAD is currently subject to.

That being said, SAWAD would need time to study and find ways to start thisnano-financing business as loans would be non-collateralized. However, it

should represent good business potential for SAWAD in the future.

Also, with or without the nano-financing business, we remain bullish onSAWAD. With plenty of untapped grassroots loan demand and the huge

interest gap versus loan sharks, we see SAWAD as a super-growth stock

with a sustainable high and rising ROE trend. We look for a five-year EPS

CAGR of 40% with ROE reaching 48% in 2019F.

There is 35% potential upside to our Bt33.0 TP. Reiterate BUY on SAWAD.

Key Valuations

Y/E Dec (Bt m) 2013A 2014F 2015F 2016F

Pre Provision Profit 858 1,238 1,747 2,441

Net profit 575 789 1,135 1,609

Norm profit 575 789 1,135 1,609

Norm EPS (Bt) 0.6 0.8 1.1 1.6

Norm EPS grw (%) 42.1 31.0 37.6 41.7

Norm PE (x) 38.9 29.7 21.6 15.2

P/BV (x) 16.3 8.7 7.0 5.5

Div yield (%) 2.4 1.3 1.9 2.6

ROE (%) 66.1 40.0 35.9 40.4

ROA (%) 10.9 11.3 12.6 13.9

Source: Thanachart estimates

Stock Data

Closing price (Bt) 24.50

Target price (Bt) 33.00

Market cap (US$ m) 744


12M H/L price (Bt) 25.00/10.20

Price Performance

0

50

100

150

200

250

300

048

121620

2428

May-14 Jun-14 Aug-14 Oct-14 Dec-14

(%)(Bt)SAWAD Rel to SET Index

Source: Bloomberg

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NEWS CLIPPING

Abhisit opposes directly elected PM, cabinet, warns they could be corrupted by power : Democrat

Party leader Abhisit Vejjajiva yesterday expressed his opposition to the proposal for direct election of the

prime minister and cabinet, saying such an administration could easily be corrupted by power.

The Nation

Loans to poor plan gets the nod : The cabinet has endorsed plans to set up "nano financing" operators toprovide loans to the poor and to issue state bonds worth 100 billion baht.

Bangkok Post

SET mulls next step for gold : Hopes for regional leadership in balance. Talks with major gold dealers over

management of a proposed physical gold exchange have failed so far, and the Stock Exchange of Thailand

is set to decide its next move early next year.

Bangkok Post

Traders getting more positive on gold price : The gold confidence index' rise by 4.95 points from last

month to 51.72 reflects the first positive outlook in four months, supported by the weak baht, gold demand

during the Indian wedding season and the buying period at the beginning of a new year.

The Nation

Energy price restructuring plan ready : The Energy Policy and Planning Office will, on December 15,

propose the energy price restructuring plan, while the 2015 Power Development Plan (PDP) would focus on

more coal-fired power plants.

The Nation

Narongchai defends small price cuts at the petrol pumps : Energy Minister Narongchai Akrasanee has

defended the decision not to cut retail oil prices in Thailand at the same pace as the decrease in global

crude prices.

Bangkok Post

Govt says hands are tied on rubber prices : The government said yesterday it is a difficult task to shore

up rubber prices to 80 baht per kilogramme as its hands are tied by market mechanisms.

Bangkok Post

Officials to meet on Dawei's initial phase : Officials from Myanmar and Thailand will meet next month to

approve the framework of the initial phase of the delayed Dawei development project.

Bangkok Post

Retail chains embrace digital revolution : Multi-channel strategies enhance efficiency, customer

satisfaction. Top modern retailers have reshuffled their business strategies to cash in on the booming digital

economy in Thailand, which has not only facilitated their back-office operations, but also enhanced

communication with potential clients.

The Nation

NBTC panel to look into the benefits of 4G :Auctions of 1,800mhz, 900mhz spectra planned for July. The

National Broadcasting and Telecommunications Commission has set up a working panel to study the

benefits for the country from its plan to licence 1,800- and 900-megahertz spectra.

The Nation

Krungthai Bank to target lending strategy at medium-sized businesses : Krungthai Bank will next year

strongly go after medium-sized enterprises - those with annual turnover of up to Bt500 million - along with

smaller businesses upcountry through the bank's new "loan factory" credit-analysis system.

The Nation

TMB Bank expects more Thais to chase higher returns in funds : Thailand's low level of investment in

funds are providing an opportunity for fund managers to attract more individual investors by offering high

yields, said Kamolwan Imruthaicharoenchok, senior vice president for investment products at TMB Bank.

The Nation

IVL upbeat about 2015 margins : Aloke Lohia, chief executive of SET-listed Indorama Ventures Plc (IVL),

one of the world's largest integrated polyester product makers, says the company is sustainable thanks to its

strong principles, as polymers is a cyclical business.

Bangkok Post

Gunkul earmarks Bt15 billion to boost capacity : Gunkul Engineering is setting aside Bt15 billion to fund

a three-year (2015-2017) investment plan to raise production capacity to 350 megawatts and increase the

listed company's profit proportion accounted for by alternative energy to 60-70 per cent by 2017.

The Nation

MCOT warns NBTC on Ch 3 concession : Broadcast on other systems "possible" only with its permission .

MCOT has warned the National Broadcasting and Telecommunications Commission (NBTC) that its ordersmust not affect the concession contract the state broadcaster granted to Bangkok Entertainment Co, an

MCOT source said.

The Nation

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Market data Close %

SET Index 1,559.6 -16.0 -1.0%

SET50 Index 1,041.0 -14.8 -1.4%

SET100 Index 2,304.9 -30.2 -1.3%

MAI Index 729.9 3.0 0.4%

Economic data Current -1M -3M

Saving Rate (%) 0.50 0.50 0.50

Fixed Deposit - 3M (%) 1.13 1.13 1.13

Fixed Deposit - 1Y (%) 1.75 1.75 1.75

Govt Bond Yield 1Y (%) 1.99 2.09 2.11

Govt Bond Yield 10Y (%) 2.89 3.04 3.60

Treasury Yield 10Y (%) 2.16 2.32 2.59

Policy Rate (%) 2.00 2.00 2.00

VIX Index 18.53 13.31 14.12

TED Spread (%) 0.21 0.23 0.22

Source: Bloomberg, Datastream, Thai BMA

SET Forward PE Band

0

500

1,000

1,500

2,000

2,500

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014F

2016F

(index)

7x

10x

14x

18x

22x25x

SET PE Discount to MSCI Asia x JP

(8)

(6)

(4)

(2)

0

2

4

6

8

10

Jan-03 Sep-06 May-10 Jan-14

(x)

+2 STD = 5.7x

+1 STD = 2.9x

Average = 0.1x

-1 STD = -2.8x

-2 STD = -5.6x

Source: Bloomberg

PRICE CHANGE - MOST ACTIVE

Change 1 Day (%) Change 1 Week (%)

(10) 0 10 20 30

PTT

PTTEP

PTTGC

ADVANC

CK

SCB

KBANK

TRUE

RS

PAF

(20) (10) 0 10 20 30 40

PTTGC

PTTEP

PTT

SCB

KBANK

DEMCO

TRUE

ADVANC

INTUCH

RS

Change 1Month (%) Change Year-To-Date (%)

(20) (10) 0 10 20 30

PTTEP

DEMCO

PTT

MTLS

JAS

KBANK

SCB

ADVANC

TRUE

ITD

0 20 40 60 80 100

BBL

INTUCH

JAS

PTT

ADVANC

SCB

KTB

KBANK

AOT

TRUE

SECTOR CHANGE

Change 1 Day (%) Change 1 Week (%)

(4) (3) (2) (1) 0 1

ENERG

PETRO

HELTH

SET

CONMAT

FOOD

COMM

PROP

ICT

TRANS

AUTO

ETRON

BANK

MEDIA

(8) (6) (4) (2) 0 2 4

PETRO

ENERG

COMM

BANK

HELTH

PROP

SET

CONMAT

TRANS

FOOD

ETRON

MEDIA

AUTO

ICT

Change 1 Month (%) Change Year-To-Date (%)

(10) (5) 0 5 10

ENERG

PETRO

ETRON

AUTO

PROP

HELTH

SET

COMM

BANK

FOOD

CONMAT

ICT

MEDIA

TRANS

(40) (20) 0 20 40 60

PETRO

ENERG

AUTO

COMM

FOOD

MEDIA

SET

CONMAT

ICT

PROP

BANK

ETRON

TRANS

HELTH

Source: Bloomberg

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General Disclaimers And Disclosures:

This report is prepared and issued by Thanachart Securities Public Company Limited (TNS) as a resource only for clients of TNS,

Thanachart Capital Public Company Limited (TCAP) and its group companies. Copyright Thanachart Securities Public Company

Limited. All rights reserved. The report may not be reproduced in whole or in part or delivered to other persons without our written

consent.

This report is prepared by analysts who are employed by the research department of TNS. While the information is from sources

believed to be reliable, neither the information nor the forecasts shall be taken as a representation or warranty for which TNS or

TCAP or its group companies or any of their employees incur any responsibility. This report is provided to you for informational

purposes only and it is not, and is not to be construed as, an offer or an invitation to make an offer to sell or buy any securities.

Neither TNS, TCAP nor its group companies accept any liability whatsoever for any direct or consequential loss arising from any use

of this report or its contents.

The information and opinions contained herein have been compiled or arrived at from sources believed reliable. However, TNS,

TCAP and its group companies make no representation or warranty, express or implied, as to their accuracy or completeness.

Expressions of opinion herein are subject to change without notice. The use of any information, forecasts and opinions contained in

this report shall be at the sole discretion and risk of the user.

TNS, TCAP and its group companies perform and seek to perform business with companies covered in this report. TNS, TCAP, its

group companies, their employees and directors may have positions and financial interest in securities mentioned in this report. TNS,

TCAP or its group companies may from time to time perform investment banking or other services for, or solicit investment banking or

other business from, any entity mentioned in this report. Therefore, investors should be aware of conflict of interest that may affect the

objectivity of this report.

8/10/2019 TMN141211

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THANACHART SECURITIES 10

Recommendation Structure:

Recommendations are based on absolute upside or downside, which is the difference between the target price and the current

market price. If the upside is 10% or more, the recommendation is BUY. If the downside is 10% or more, the recommendation is

SELL. For stocks where the upside or downside is less than 10%, the recommendation is HOLD. Unless otherwise specified, these

recommendations are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a temporary mismatch

between upside/downside for a stock based on the market price and the formal recommendation.

For sectors, we look at two areas, ie, the sector outlook and the sector weighting. For the sector outlook, an arrow pointing up, or the

word Positive, is used when we see the industry trend improving. An arrow pointing down, or the word Negative, is used when we

see the industry trend deteriorating. A double-tipped horizontal arrow, or the word Unchanged, is used when the industry trend does

not look as if it will alter. The industry trend view is our top-down perspective on the industry rather than a bottom-up interpretation

from the stocks we cover. An Overweight sector weighting is used when we have BUYs on majority of the stocks under our

coverage by market cap. Underweight is used when we have SELLs on majority of the stocks we cover by market cap. Neutral is

used when there are relatively equal weightings of BUYs and SELLs.

Thanachart Securities Pcl.

Research Team

28 Floor, Siam Tower Unit A1

989 Rama 1, Pathumwan Road, Bangkok 10330

Tel: 662 - 617 4900

Pimpaka Nichgaroon, CFA

Head of Research

Economics & Strategy

[email protected]

Supanna Suwankird

Energy, Utilities

[email protected]

Siriporn Arunothai

Ad Hoc Research, Healthcare

[email protected]

Sarachada Sornsong

Banks, Telecom

[email protected]

Saksid Phadthananarak

Construction, Transportation

[email protected]

Noppadol Pririyawut

Senior Technical Analyst

[email protected]

Phannarai Tiyapittayarut

Property, Retail

[email protected]

Kalvalee Thongsomaung

Food, Media, Hotel

[email protected]

Adisak Phupiphathirungul, CFA

Retail Market Strategy

[email protected]

tmn141211

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