CLSA ออกงานวิจัยล่าสุด เพิ่มน้ำหนักการลงทุน BAY+HANA นอกเหนือจาก MINT+DTAC+AP+CPN+KBANK+BBL+BANPU
Posted on Monday, February 18, 2008
CLSA Asia-Pacific nwewly research today still stated our positive view on Thailand Stock as we see more stable politics, the end of a long earnings downcycle, locals (who account for about 70% of the market) starting to buy, and consumers eventually starting to spend. We would consider four themes in Thailand:
1) Short term mega project hype 2) Consumption recovery
3) Capex cycle return and 4) A coal price super cycle.
In this new report we review our third theme, capex, and show that it is further away than most realize, so play consumption first. To play the consumer we have recently completely removed externally driven energy stocks from our top picks list and have gone heavily overweight the largest domestic sector, banks.
Our bank?s analyst, James Moss, makes a strong positive argument for
consumer and SME focused banks KBANK and BAY, where he sees strong loan growth and high margins. Due to a slow pick up in large corporate capex James? expects only a 200bp pick up in loan growth at BBL in 2008, but for the growth to hit 14% in 2009 and accelerate to 16% in 2010 as the capex cycle firmly kicks in.
Despite our expectation that large corporate capex will take time to recover we have BBL in our top picks because first, we expect 17% 2008 earnings growth, driven by steady loan growth and margins, but mainly from strong cost control and an absence of exceptional US CDO losses in 2008. In addition, the bank is historically cheap at 1.3x PB, while the valuation gap between SCB, trading now on 2.4x, is the largest it has ever been.
In our 4 February report Crazy positive 1: we reviewed the mega hype theme and nine stocks which could move on that theme. Mega projects pumped up the prior Thaksin administration and we think they are coming back. We call it hype because stocks fly, but the real work takes a lot longer than expected. Play the ST hype, and get out quick. We highlighted nine companies which could benefit from the mega hype theme.
Two steel companies: Bangsaphan Barmill and Tata Steel Thai; Three contractors: Italian-Thai Dev, Ch Karnchang, and Sino Thai E&C; Two banks: Krung Thai Bank and TMB Bank; and two cement companies: Siam Cement, Siam City Cement. On average these stocks are up about 10% since the issuance of that report, we think there could be another leg to mega hype as the government starts announcing its new mega project plans. Just remember to get out once we get through that period.
Crazy positive theme 2: Consumer recovery is next driver and highlighted five leading consumption indicators. We believe that there will be a consumer recovery which will drive economic growth and the stock market. Hence, we have positioned our top picks for this recovery. Consumption growth has been below average for about eight quarters, starting with the lifting of the diesel subsidy in July 2005, diesel prices were up 60% in that year. That cost-push brought inflation to 6% until 2Q06. This was followed by another year or so of political turmoil.
We argue that after recovering from these blows and facing a slightly more stable political environment, Thais are ready to spend.
Consumption is important as it accounts for 63% of Thai GDP. Five statistics which have historically been leading indicators of consumption growth and market performance: car sales growth, retail sales growth, advertising spending growth, consumer confidence and inflation (inverse relationship).
Four are either very low or bouncing back. The risk is inflation which has risen to long term average levels. The latest January 2008 numbers released out of the five are advertising spending which was down 7% YoY, and consumer confidence which was up slightly to 78% vs. 77% in December 2007. So the consumption recovery remains our expectation, not yet firmly reality.
Crazy positive theme 3 ? we focus our top picks on the consumption theme as we believe that the capex upcycle theme will take time to arrive. This is because capacity utilization may not be as full as it appears. Thailand?s capacity utilization, as announced by the Bank of Thailand, at slightly over 76%, it appears that capacity is approaching full, possibly leading to an investment and lending boom. Moreover, it shows the possibility of this boom more dramatically when plotted against GDP and loan growth, both of which have been very weak for years, despite the rising capacity utilization.
The BOT capacity utilization data only goes back to 1995, which was the last year of nine which experienced an amazingly high average 29% loan growth,this collapsed after 1995. It would seem that the massive lending and investment boom that happened from 1987 to 1995 would have brought capacity utilization down by 1995. Hence we suspect that the prior peak of about 80% in 1995 was not the prior peak, but rather just the earliest data released by the BOT.
To test this we plot a comparable bottom up ratio, asset turnover
(revenue/assets), from an aggregate of 200 listed companies back to 1991.We then assume that the ratio of capacity utilization to asset turnover was the same in prior years and use this to plot our estimated line of where capacity utilization theoretically was. We accept the weakness of extrapolating, but would argue that at least we can see that if capacity utilization were revealed it would show that 80% was not the prior peak. This method shows a theoretically estimated average capacity utilization rate from 1992 to 1994 of 98%. We later questioned the BOT staff who concurred that 80% was unlikely the prior peak.
Our conclusion is that we do not see a broad based investment upcycle just yet. In addition, if the US economy were to weaken it could cause Thai exports to slow, taking pressure off of these factories. Lastly, the sectors which are at full capacity (hard disk drives, commercial car production, and petrochemicals throughout the whole stream) are sophisticated factories built and/or run by some of the brightest minds and companies in Thailand and the world and hence could possibly be expected to run near full capacity for years.
We make no changes to our top picks this week after last week?s removal of PTT (PTT Bt332.0 - BUY), this was due mainly to our heightened focus on the domestic sector, rather than PTT?s fundamentals which remain strong. We continue to be strongly overweight consumer and SME banks KBANK and BAY.
We are less positive on SCB and willing to get into BBL, despite its strong
capex exposure, because it is historically cheap at 1.3x PB, while the
valuation gap between SCB, trading now on 2.4x, is the largest it has ever been.
We have shifted energy to underweight, taken out PTT and added BAY and HANA
Company Story
Bangkok Bank (BBL ? Bt125.0 ? BUY ) Profits to rise 50% by 2010CL, liquidity rundown to raise returns, undervalued franchise
Kasikornbank (KBANK ? Bt90.0 ? BUY ) Profits to rise 76% by 2010CL from SMEs and an aggressive cross-selling drive
Bank of Ayudhya (BAY TB ? Bt24.8 ? BUY ) Profitability doubling from aggressive retail push; 2010CL is 60% above consensus
Banpu (BANPU TB ? Bt472.0 ? BUY ) Expect 08E earnings to jump 50% driven by high coal prices amid tight regional mkt
Central Pattana (CPN TB ? Bt26.8 ? BUY ) Expect 20%+ EPS growth in 2008CL driven by improved confidence post the election
Asian Property (AP TB ? Bt6.6 ? BUY ) Expect 30%+ EPS growth in 2008CL driven by strong condo backlog
Total Access Comm. (DTAC TB ? Bt47.0 ? BUY ) 40% 2008CL profit inc due to falling reg costs&organic growth. More reg upside ahead
Hana Microelec. (HANA TB ? Bt19.3 ? BUY ) Cheap, trading 2 stdev below avg PB & PE. Will survive & thrive w/ $100m net cash
Minor Inter. (MINT TB ? Bt15.8 ? BUY ) Expect 35% 08CL profit growth from new hotels in high-end tourist destination
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http://www.moneychannel.co.th/BreakingN ... fault.aspx