Banks
SCB, KBANK and BBL will reverse provisions, which will raise profit, if IFRS 9 is postponed to 2022.  SCB has made provisions of Bt26bn, KBANK Bt34bn and BBL Bt20bn. KTB has set aside Bt40bn provisions and it will book a profit if AQ can liquidate its land and repay debt. (Kao Hoon, 9/5/18)
Comment: So this is from the news that the Accounting board of Thailand (or it goes by some other name) requested that the IFRS implementation be postponed as it could negatively impact Thailand’s economic recovery. It is rather sad if an accounting change is going to harm’s Thailand’s economy…wth are they hiding in the books then?
BCPG
BCPG expects to close deal for 100MW power plant in 2H18. On May 11, it will announce a good 1Q18. It will spend Bt7bn on a “Smart Park”. (Kao Hoon, 9/5/18)
BM
BM got an order from DTAC and has backlog of Bt600mn. It targets to receive orders a thousand communication towers. It expects a good 1H18 with all businesses performing well. It is confident that 2018 revenue will grow 10-20% to Bt1.03bn. It has backlog of Bt600mn. It plans to expand overseas and expects to make a decision by end May. (Thun Hoon, 9/5/18)
BR
BR will benefit from overseas investment as duck prices have been rising in 2Q18. BR’s 2018 revenue will grow supported by its investments in Indonesia and Vietnam. Duck price is expected to increase in 2Q18.  Its plan to move its food processing plant to Pathum Thani is on schedule. (Thun Hoon, 9/5/18)
CHAYO
CHAYO expects 2Q18 to grow substantially, backed by a larger portfolio. It will spend Bt500-600mn to buy non-performing loans. It will sign a contract a deal of at least Bt1bn soon. It expects its portfolio will reach Bt33bn. (Thun Hoon, 9/5/18)
Comment: They are trying their best to catchup with JMT as quickly as possible Issue is that we do not know what they are paying for this debt. And if this government does agree to the postponement of IFRS9 then what will happen to the supply of non performing loans that both JMT and CHAYO were banking on for this year.
CMO
CMO with its business partner will launch MACROWAVE. CMO will do a joint venture with BEC-Tero Music and Malama Collective to launch MACROWAVE. It will have a music festival in 3Q18. It has backlog of Bt766mn. (Kao Hoon, 9/5/18)
EKH
EKH will focus on Chinese customers. It expects strong revenue in 2Q18 backed by a number of Chinese customers. Its utilization rate is almost 70% and it will expand to complex medical care. It will make a final decision on a Lasix center by the end of the year with investment cost of Bt40mn. (Thun Hoon, 9/5/18)
FPI
FPI expects 2018 revenue and profit to jump on strong orders for automotive spare parts and full year recognition of revenue from a biomass power plant. (Kao Hoon, 9/5/18)
GRAND
GRAND reports a YoY growth in presales in 1Q18. It recently sold 70% or Bt4.2-4.3bn of the newly launched Hyde Sukhumvit 11. It has backlog of Bt1bn, of which 70% will recognized as revenue this year.  It will launch a new project worth Bt6bn late this year. (Thun Hoon, 9/5/18)
INET
INET expects revenue to grow 40% YoY in 2018 backed by a growing IT business and increased number of customers plus booking of profit from Netbay-Inet IDC 3. It expects to reach 2,400-2,500 customers by year end. (Kao Hoon, 9/5/18)
KTC
KTC maintains its loan target and NPLs at 0.82%. KTC’s personal loans grew 10% YoY to 40,000 customers in 1Q18. It expects personal loans to grow 10% to 26,500 customers this year. It will launch three campaigns to boost loan portfolio and number of customers. (Kao Hoon, 9/5/18)
Comment: A question a team member asked me today was how does KTC keep its NPL so low? First define what an NPL is, if the customer is paying the minimum amount each month then they are not an NPL. If they “restructure” the debt then its not an NPL. However this doesn’t take away from what management has been able to achieve in the past 7 years.
PCSGH
PCSGH’s backlog reached Bt1.7bn, which will support revenue growth of 10% in 2018. This is backed by strong automotive sales that will boost production to more than 2mn cars. (Kao Hoon, 9/5/18)
PPP
PPP’s 1Q18 net profit dropped 58.7% to Bt13.48mn due to lower revenue, rising expenses and provision for loss on a construction project. (Kao Hoon, 9/5/18)
PRM
PRM expects better results in 2H18. It will consolidate Big Sea’s income statement in 3Q18, raising its fleet. It will continue merger and acquisition deals. (Thun Hoon, 9/5/18)
Comment: Their share price has dropped to its first day trading levels. Perhaps a company visit is required here.
SAMCO
SAMCO will launch two residential projects in 2Q18 worth Bt1.5bn. It targets revenue growth of 10% this year. (Kao Hoon, 9/5/18)
SMART
SMART reported earnings recovery in 1Q18 with a 77% cut in losses YoY and revenue growth of 11.2% to Bt88.2mn. Management expects 2Q18 performance will continue to improve after more investment in the private sector in EEC and higher demand for its products. The company also expects more orders from neighboring countries, mainly Cambodia and Laos. (Thun Hoon, 9/5/18)
SPCG
SPCG expects more interest from Singapore institutional investors after a recent company visit. Management reaffirms revenue growth for this year of >10% from revenue recognition of the solar power business in Japan with capacity of 30MW, plus more installation of solar rooftop and more investment in solar business in Japan. It expects a 480MW solar project, Ukujima Mega Solar Project, will be concluded by the end of June. (Thun Hoon, 9/5/18)
Comment: They will have to figure out what to do with the cash pile that they are generating
THRE
THRE revised its revenue growth from 15% to 8% this year after having to make Bt68mn provisions for doubtful debt related to the suspension of Chao Phaya Insurance. This was the key factor behind a loss of Bt478mn in 1Q18. Management still expects 2Q18 earnings to turn to a profit given a more proactive marketing campaign and more revenue from overseas business. (Thun Hoon, 9/5/18)
Comment: Again more provisions from this company, “unexpected”, nope it’s a poorly run company in a difficult industry
TMILL
TMILL reaffirms its revenue target of 10% this year with net profit growth expected at 20% YoY. This will be driven by stronger economic activity, capacity expansion and a larger customer base. The company plans to invest in new automatic machine project within the next two years. (Khao Hoon, 9/5/18)
TPIPP
TPIPP expects 2Q18 performance to maintain positive momentum after a net profit growth of 7.93% in 1Q18, driven by its waste power plant (TG6) and waste heat power plant (TG4) commenced operations in April under a long-term PPA with EGAT for 90MW. It will be paid with base tariff plus adder of Bt3.5/kwH.  (Post Today, 9/5/18)
Comment: Same story, ignore the news around the government not buying renewable energy, the ones that have the contracts are going to continue doing fine.
UTP
UTP expects 1Q18 to be strong on the back of a 15-20% drop in raw material costs this year. The company said that purchasing orders for this year will be healthy. It will expand production, which will be fully utilized by 3Q18. (Thun Hoon, 9/5/18)
  1. Hi Pon,

    Regarding your comments on THRE, their 18Q1 loss of THB478 mil was mainly due to (1) write-off of deferred tax assets of THB295 mil and (2) reduction of THB143 mil in profit commission estimate from the Excess of Loss contract which will expire in 2019. There were two other factors: (3) valuation loss of THB 98 mil from their THREL holding and (4) provisions of THB68 million for Chao Phaya Insurance.

    (1), (2), and (4) are one off; (3) will continue to impact their quarterly earnings as long as they hang on to their 14.8% stake in THREL (which was hammered yesterday).

    Is THRE a ‘poorly run company in a difficult industry’? It is definitely in a very difficult industry. Is it ‘poorly run’? I would give them a few more quarters to clean up their balance sheet. They have people from Fairfax watching them, and Fairfax has a solid track record in fixing insurance businesses that run into trouble.

    I enjoy reading your blog posts. Thank you very much for sharing your thoughts and ideas!

    • How long have they been trying to clean up their balance sheet? 6 years? 1-2 years I would give them a break, 6 years no. But thanks for reading and your comments, keep ‘me coming 🙂

      • Hi Pon,

        I agree the past six years have not been fun riding this thing down to a muti decade low. GIC finally bailed out while Aberdeen funds are still sticking with them and Fairfax increased their stake to 47% in the meantime. I don’t think Fairfax will just sit around and let this business deteriorate much further, given what they have accomplished with previous acquisitions of formerly ‘poorly run’ insurance companies.
        Thanks again for your analysis and ideas. Since I don’t read Thai, I tend to rely on your posts on what local publications are saying about Thai companies.

        • The issue for ThaiRE was that in the past it was an effective monopoly for reinsurance, today it isn’t the case due to the changes in the industry and they are attempting to be product creators for the other insurance co’s. At one point some value may be recongised in this company. But I can only see it happening if its another international group buying Fairfax’s stake. Every dog has its day 🙂

  2. PTT& co. are heavyweight can push SET index up, but anything else pretty weak, earning reports are pretty bad, foreign capital outflows and uncertain on elections…

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