TH Morning Matters 20130516€¦ · However, its 2013 revenue growth target of 30% should be achievable, with targeted sales at THB6bn. Its FV in end-2012 stood at THB21. We expect

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16-May-2013

Morning Matters

WHAT’S INSIDE

On The Platter

Oishi Group (OISHI TB; FV THB130.00 – Sell) Results R eview: Pallid Numbers From Soft Drinks Segment in 1Q13 Oishi’s 1QCY13 results reflected several negative factors: i.) profit from its green tea drinks segment sank and have shown no signs of recovering, ii) sales jumped 6% y-o-y but its absolute SG&A spiked up by 50%, mainly in the drinks business. As group net debt has risen to 0.7x while interest expense are shooting up, this is an unrealistic price level for investing. Given the company’s current P/E of 40x and slow growth, we maintain a Sell rating, a THB130 TP.

Sanko Diecasting (SANKO TB; FV THB1.66 – Sell) Results Review: Higher Tax And Lower Margins Erode 1Q Earnings Sanko, which made its debut on the SET on 9 May, is now trading 100% higher than its IPO price. Its 1Q13 earnings of THB430k (-93% y-o-y) only comprised 1.1% of our full-year forecast, mainly due to a 6% y-o-y drop in sales and a high effective tax rate of 23% (vs our estimate of 10% for FY13F). This prompts us to trim our TP from THB2.00 to THB1.66, based on a 12x P/E. Maintain SELL.

Amata Corporation (AMATA TB; FV THB35.00 – Buy) Resu lts Review: Strong Growth Catalyst In 2H13 1Q13 was AMATA’s weakest quarter this year. We remain optimistic over its earnings growth outlook, as its substantial backlog is waiting to be realized via future sales and improved margins. We maintain our full-year profit growth forecasts of c.30% p.a. for 2013-2014. We are also positive on the company’s plan to rapidly unlock asset value. Maintain BUY, with our TP at THB35, based on a sum-of-the-parts valuation.

Hemaraj Land & Dev (HEMRAJ TB; FV THB4.60 – Neutral) Results Review: Gheco-One Woes Weigh On Outlook HEMRAJ’s presales of 421 rai and revenue of THB2bn for 1Q13 were healthy and Management recently increased its 2013 target land sales from 1,600 rai to 1,800 rai. However, its 2Q13 results will be adversely impacted by problems at the Gheco-One power plant. We do not favor HEMRAJ, given its too-conservative land sales guidance, limited landbank, unimpressive backlog, and power plant woes.

Ticon Ind Connection (TICON TB; FV THB31.00 – Buy) R esults Review: Waiting For The Next Round Of Asset Sales TICON’s 1Q13 results were soft as it had no asset sales in the period. However, its 2013 revenue growth target of 30% should be achievable, with targeted sales at THB6bn. Its FV in end-2012 stood at THB21. We expect its FV to rise to THB31.00/share by year-end on the back of rising asset prices, more new rental space and a stronger balance sheet after the conversion of 245m warrants in end-2013.

SET Intra -Day Graph

Source: Bloomberg

Key Market Indices (14 May 2013)

Value Chg % Chg % YTD SET 1630.09 6.61 0.4% 17.1%

SET50 1081.13 6.78 0.6% 14.4%

SET100 2413.73 12.08 0.5% 16.1%

Dow Jones 15275.69 60.44 0.4% 16.6%

S&P500 1658.78 8.44 0.5% 16.3%

Nasdaq 3471.62 9.01 0.3% 15.0%

FTSE 6693.55 7.49 0.1% 13.5%

FSSTI 3441.53 8.77 0.3% 8.7%

Hang Seng 23044.24 113.96 0.5% 1.7%

Nikkei 15096.03 136.49 0.9% 45.2%

KLCI 1783.03 -5.40 -0.3% 5.6%

SHANGHAI SE 2224.80 7.79 0.4% -2.0%

JCI 5089.88 7.94 0.2% 17.9%

SET 5-yr avg 2012 2013F

PE (x) 14.5 18.7 15.1

P/BV(x) 1.9 2.6 2.5

Yield(%) 4.0 2.6 3.0

Key Statistics

SET Value by investor Type: Daily Buy (THBm) Sell (THBm) Net (THBm) Institution 5,221.71 3,943.09 1,278.62 Proprietary 5,400.95 5,440.82 -39.87 Foreign 15,236.94 10,591.84 4,645.10 Retail 28,602.08 34,485.94 -5,883.86 SET Value by investor Type MTD (THBm) YTD (THBm) Institution 553.25 38,802.10 Proprietary 3,000.71 1,526.77 Foreign 7,356.64 -8,588.25 Retail -10,910.60 -31,740.62 SET50 Index Future Long Short Net MTD YTD Institution 4,558 4,390 168 -3,682 2,458 Foreign 1,340 2,258 -918 659 -6,497

Local 7,745 6,995 750 3,023 4,039


16-May-2013

Banpu (BANPU TB; FV THB355.00 – Sell) Results Review: Higher production, lower costs should improve earnings ove r the next several quarters Banpu’s coal business should pick up in 2Q13, with higher production and more or less stable coal price. Cost cutting remains very much a goal for this year in both Australia and Indonesia. We do not expect any strong rebound in the coal business in the near-term and without any major catalyst over the next several quarters, we maintain our SELL on this stock with TP of THB355/share.

Airports of Thailand (AOT TB; FV THB188.00 – Buy) Re sults Review: On a Record-Breaking Streak AOT (Airports of Thailand) is still in record-breaking mode. Its 1HFY13 core earnings rose to THB5.59bn (YTD: 55%) as margin compression was not as severe as we had anticipated, thus giving scope for more earnings upside. As its earnings exceeded our projections, we raise our FY13/FY14/FY15 estimates by some 8.4%/10%/12.7% respectively. Maintain Buy, with our FV nudged higher to THB188.

MEDIA HIGHLIGHTS

♦ PTTGC seeks co-investment with Sinochem in China

♦ Indorama in deal for fibre plant in Rayong

♦ Nok Air migrates to Myanmar as a test

♦ KBank hunts upcountry millionaires

♦ Food, hotels getting equal slice of Centel's B24bn pie

♦ Centre Point moves out of apartments

♦ PTT eyes USD27bn Vietnam refinery

♦ Cinemas refuse to cut ticket prices ECONOMIC HIGHLIGHTS

♦ Thailand: European firms push Thai-EU FTA talks

♦ Malaysia: Modest GDP growth in 1Q

♦ Japan: Economy grows more-than-forecast in 1Q

♦ EU: Eurozone now in its longest recession

♦ EU: French economy returns to recession

♦ UK: Unemployment rises in sign labor market Is slowing

♦ UK: King declares recovery Is in sight as outlook raised

♦ US: Production Falls as US feels global weakness

See import ant disclosures at the end of this report 3

Media Highlights PTTGC seeks co -investment with Sinochem in China PTT Global Chemical is keen to join with China's Sinochem to set up a petrochemical plant in that country, said Anon Sirisaengtaksin, chief executive officer of PTTGC. The two companies recently signed a memorandum of understanding on a joint feasibility study on co-investment in petrochemical business focusing on polyurethane and bio-based chemicals to serve the growing auto, construction, and electronics industries. PTTGC has already piloted exporting its products to test China's market. If they are enthusiastically welcomed, this might lead to joint investment between PTTGC and Sinochem to set up a petrochemical plant there. (The Nation)

Indorama in deal for fibre plant in Rayong Indorama Ventures will open a plant in Rayong for fibre and yarn made from a special polyester in the second quarter of 2015. Aloke Lohia, CEO of the global polyester manufacturer, said the company's board yesterday approved a 50:50 joint venture with a world-class manufacturer of non-woven fibre to set up the factory for bi-component fibre with 14,500 tonnes in annual capacity. It will be located at IVL's manufacturing complex. (The Nation)

Nok Air migrates to Myanmar as a test Nok Air's planned resumption of international flights will focus solely on Myanmar, where it plans to capture a new travel segment largely untapped by other airlines. The Thai budget airline wants to penetrate various Myanmar cities by staging flights from Thai provincial airports in Mae Sot, Chiang Mai and Ranong, said deputy chief executive Piya Yodmani. Nok Air now looks set to commence its Myanmar flights with its first route from the northwestern Thai city of Mae Sot to Mawlamyine, the town previously known as Moulmein, in September. That route should be followed shortly after by flights from Mae Sot to Yangon, then from Don Mueang to Yangon in the fourth quarter. (Bangkok Post)

KBank hunts upcountry millionaires Kasikornbank (KBank) plans to expand its private banking business aggressively this year, targeting a growth rate of 12% in assets under management (AUM) and 15% for the wealthy customer base. The bank's AUM is THB500bn with a combined 6,500 high-net-worth clients, 15-20% of whom live upcountry. With double-digit economic growth in provincial areas outpacing single-digit growth in the capital, KBank will focus on new private banking business in the provinces. The bank's private banking customers are required to have a minimum portfolio of THB50m. (Bangkok Post)

Food, hotels getting equal slice of Centel's B24bn pie Central Plaza Hotel Plc (Centel) has earmarked THB24bn to expand its hotel and food businesses through next year. Of the total, half will be spent this year and the other half next year. The investment budget has been evenly allocated to hotels and food at 50:50. Centel plans seven new hotels abroad this year and eight more in 2014. CEO Thirayuth Chirathivat said the seven hotels are in India, China, Mauritius, Sri Lanka, Bali and Vietnam. In food, Centel will introduce two new global brands in 2013 with 80 new branches for both brands. Meanwhile, the company reported year-on-year first-quarter revenue growth of 21.1% to 4.51 billion baht, with 52% derived from hotels and 48% from food. (Bangkok Post)

Centre Point moves out of apartments Centre Point Hospitality, a subsidiary of the SET-listed developer Quality Houses Plc (QH), has repositioned its business to focus on hotels instead of serviced apartments to capitalise on the growing number of tourists and expats in Thailand. Suwanna Buddhaprasart, a senior executive vice-president of QH, said Centre Point recently completed its hotel business registration, enabling it to serve both short- and long-stay customers. QH has spent THB1.1bn to renovate four serviced apartment buildings in the Chidlom, Pratunam, Silom and Sukhumvit Soi 10 areas into Centre Point hotels since 2010, shortly after it was awarded hotel licences. (Bangkok Post) PTT eyes USD27bn Vietnam refinery

The Vietnamese government gave the greenlight to an oil refinery and petrochemical complex by the energy giant PTT Plc, paving the way for a detailed feasibility study within a year. Last November PTT submitted a proposal to the Vietnamese government to build a 660,000-barrel oil refinery for an estimated USD27bn. Chief executive Pailin Chuchottaworn yesterday said Vietnamese Prime Minister Nguyen Tan Dung agreed in principle to the construction of the complex in the south-central coastal province of Binh Dinh. Construction at the refinery is expected to start in 2016 with commercial operation scheduled for 2020. (Bangkok Post) Cinemas refuse to cut ticket prices Thailand's leading cinema operators, Major Cineplex and SF Cinema Group, insist they will hold ticket prices at current levels, and claim their popcorn is expensive because it is imported. On Tuesday, representatives of the two main cinema and cineplex operators met with Jirachai Moontongroi, secretary-general of the Office of the Consumer Protection Board (OCPB), in an investigation the board said began with "many complaints" from moviegoers about what they said were unreasonable prices for tickets, snacks and beverages. (Bangkok Post)


Economic Highlights

Thailand: European firms push Thai-EU FTA talks Representatives of the European business community in Thailand yesterday said the country's service sector was in a dangerous situation due to strict local regulations that obstruct foreign investment, especially from Europe. The government should speed up FTA (free-trade agreement) negotiations with the European Union to reduce such barriers, said Rolf-Dieter Daniel, president of the European-Asean Business Centre in Thailand (EABC). Thailand's strict commercial regulation of its service industries has placed the sector in a perilous position by obstructing investment and limiting business expansion, he said. (Bloomberg) Malaysia: Modest GDP growth in 1Q The Malaysian economy grew at a modest 4.1% in the first quarter, in line with the slower growth pace across Asia, says Bank Negara Malaysia. Powered by robust domestic demand, it still remains within the 5.0 to 6.0% growth projection for 2013, said governor Tan Sri Dr Zeti Akhtar Aziz. It will continue to remain on a steady growth path, led by the private sector. At this point, there is no need to adjust (the growth outlook) as we see strong domestic demand still intact; consumption demand is holding steady with improvement in employment. (BT) Japan: Economy grows more-than-forecast in 1Q Japan’s economy expanded more than analysts estimated in 1Q13 on gains in consumer spending and exports, building momentum for Prime Minister Shinzo Abe’s campaign for a sustained growth revival GDP rose an annualized 3.5%, the most in a year, a Cabinet Office report showed in today. GDP rose 0.9% q-o-q. Japan’s economy is showing signs of making a comeback as central bank Governor Haruhiko Kuroda rolls out unprecedented monetary easing. Officials are seeking to contain volatility in the bond market as investors assess the likelihood of Kuroda fueling inflation. (Bloomberg)

EU: Eurozone now in its longest recession The Eurozone has slumped into its longest recession ever, after economic activity across the region fell for the sixth quarter in a row. Economic output across the single currency area fell by 0.2% in the first three months of 2013, statistics body Eurostat reported yesterday. France, Spain, Italy and the Netherlands all saw their economies shrink as the economic crisis in the Eurozone continued to hit its largest economies. Eurostat's figures showed that the Eurozone economy has contracted by 1% over the last year, putting further pressure on leaders as unemployment climbs to new record highs. (The Guardian)

EU: French economy returns to recession France has entered its second recession in four years after the economy shrank by 0.2% in the first quarter of the year, official figures show. Its economy shrank by the same amount in the last quarter of 2012. President Francois Hollande has said he expects zero growth in 2013, lower than a 0.1% growth forecast by the French government. Within the Eurozone, France has record unemployment and low business and consumer confidence. (BBC) UK: Unemployment rises in sign labor market Is slow ing UK unemployment rose in the first quarter and the number of people in work fell the most in 1 1/2 years as the pressure on wages intensified, adding to signs that the labor market is slowing. Joblessness as measured by International Labor Organization methods rose 15,000 in the three months through March to 2.52 million, a rate of 7.8%, the Office for National Statistics said yesterday. Employment fell by 43,000. Average earnings grew 0.4%, the least since 2009. The labor market, which proved resilient during the financial crisis, may be slow to pick up as companies meet demand from existing workers. (Bloomberg) UK: King declares recovery Is in sight as outlook r aised Bank of England Governor Mervyn King declared a UK recovery is now “in sight” as he presented his final forecasts with an improved outlook for the economy. In the central bank’s quarterly Inflation Report and King’s last before he retires in July, officials predicted that growth may accelerate to 0.5% this quarter from 0.3% in the 1Q13. They also raised projections for the next three years. On inflation, the central bank sees it peaking at 3.1% in the 3Q13, lower than expected in February. (Bloomberg) US: Production Falls as US feels global weakness Industrial production declined in April by the most in eight months, indicating American manufacturers will provide little support for an economy beset by weaker global markets and federal budget cuts. The larger-than-forecast 0.5% decrease in output at factories, mines and utilities followed a revised 0.3% gain that was weaker than first reported, Federal Reserve figures showed yesterday. An increase in homebuilder optimism indicated housing remains the economy’s bright spot. (Bloomberg)


Outperform

Current Target Upside/

Recc. Price Price Downside PE (x) Yield (%) Remarks

(Bt) (Bt) (%) 2013f 2013f

THAI Buy 32.50 36.90 13.5 16.6 2.4

Underperform

Current Target Upside/

Recc. Price Price Downside PE (x) Yield (%) Remarks

(Bt) (Bt) (%) 2013f 2013f

PTTGC Sell 75.25 60.19 -20.0 10.1 3.5

TOP Sell 66.00 55.31 -16.2 10.8 3.7

SPALI Sell 21.60 15.50 -28.2 11.4 3.5


Diary of Events 7-May 8-May 9-May 10-May 11-May

US Data Arial 7pt. MY Data MY Results Second Chance Properties SIA Engineering OSIM International

US Data MY Data MY Results

US Data MBA Mortage Applications (May 4) MY Data Automobile COE Open Bid Cat A (May 9) Automobile COE Open Bid Cat B (May 9) Automobile COE Open Bid Cat C (May 9) MY Results Singapore Airlines Ltd ASL Marine Holdings Ellipsiz Ltd Sembcorp Marine United Overseas Bank

US Data Initial Jobless Claims (May 5) Continuing Claims (Apr 28) MY Data MY Results Wilmar International City Developments Hiap Hoe Singapore Telecommunications Vicom Ltd

US Data MY Data MY Results Sembcorp Industries Mewah International

14-May 15-May 16-May 17-May 18-May US Data MY Data MY Results SATS Ltd ComfortDelgro Corp

US Data MY Data Retail Sales Ex Auto (YoY) (Mar) Retail Sales (YoY) (Mar) Retail Sales (MoM) sa (Mar) MY Results Fragrance Group Global Premium Hotels First Resources Ltd Armstrong Industrial Olam International

US Data MBA Mortage Applications (May 11) MY Data MY Results

US Data Initial Jobless Claims (May 12) Continuing Claims (May 5) MY Data MY Results

US Data MY Data MY Results Tiger Airways

21-May 22-May 23-May 24-May 25-May US Data MY Data MY Results

US Data Existing Home Sales (Apr) Existing Home Sales MoM (Apr) MY Data MY Results Avago Technologies Ltd

US Data MBA Mortage Applications (May 18) New Home Sales (Apr) New Home Sales MoM (Apr) MY Data Automobile COR Open Bid Cat A (May 23) Automobile COR Open Bid Cat B (May 23) Automobile COR Open Bid Cat C (May 23) MY Results

US Data Initial Jobless Claims (May 12) Continuing Claims (May 5) MY Data Initial Jobless Claims (May 19) Continuing Claims (May12) MY Results Global Logistics Properties Ltd

US Data MY Data MY Results

15 14 13 10 9 15 14 13 10 9

1 CPN 1,989.1 20.5 -74.9 44.4 -75.4 BBL -166.9 -37.6 35.1 190.0 -796.4 INTUCH 3,118.5 CK -632.6 INTUCH 28,376.1 SCC -5,662.8

2 INTUCH 574.9 855.2 617.3 829.3 527.4 KK -52.2 9.9 14.8 29.5 17.7 CPN 1,988.2 TRUE -464.0 DTAC 9,943.3 LH -2,854.3

3 BAY 390.5 266.8 265.3 208.8 73.3 ASP -50.3 -2.0 1.0 -4.3 4.6 KBANK 1,881.5 ADVANC -366.6 ADVANC 8,627.0 BANPU -2,761.2

4 SCB 296.4 40.5 22.9 149.5 53.1 AMATA -46.0 -47.7 -1.8 10.3 6.2 PTTEP 1,840.8 HMPRO -196.4 PTTEP 8,226.8 SIRI -1,632.6

5 TUF 206.1 59.2 -19.4 2.4 9.2 CFRESH -43.8 -16.9 -3.9 0.0 0.0 PTT 1,677.8 SIRI -104.5 PTTGC 7,156.9 DEMCO -822.3

6 PTT 194.5 271.0 57.4 179.4 148.3 ADVANC -43.7 -741.2 66.3 14.4 33.2 PTTGC 1,278.3 CFRESH -80.3 BAY 7,122.3 CK -768.0

7 LH 137.5 -10.6 22.8 -37.8 -17.2 HANA -24.6 1.2 0.0 0.4 0.9 CPALL 1,222.7 UV -77.2 PTT 7,010.5 TRUE -685.3

8 QH 137.0 55.6 -5.3 7.0 23.2 KTB -22.3 80.2 -18.0 -164.8 72.2 BAY 1,146.2 BECL -71.5 KBANK 5,820.2 UV -500.3

9 KBANK 133.3 289.0 -325.4 549.8 339.7 UV -18.0 -6.9 -6.5 -13.0 -6.7 MAKRO 882.7 SVI -67.2 BBL 4,250.1 HMPRO -490.9

10 TMB 131.7 24.4 38.1 100.1 107.2 SVI -17.7 -9.4 -35.3 0.5 0.0 SCB 703.0 ROBINS -66.7 TMB 3,934.6 ASP -369.7

11 MAKRO 130.5 0.9 360.4 228.8 95.4 NOBLE -13.9 -0.0 -0.3 -1.8 -0.1 TMB 629.3 CENTEL -64.9 TCAP 3,489.0 RML -327.7

12 PTTGC 128.8 245.9 313.8 109.2 16.6 HFT -13.6 -9.0 -20.2 -0.0 0.4 THCOM 604.8 JAS -62.0 TOP 3,069.3 AAV -285.0

13 BANPU 121.3 6.8 -1.7 17.2 -2.2 SCC -13.1 -3.1 37.2 -84.4 48.7 MINT 558.2 MCOT -54.6 CPALL 2,879.6 STPI -269.5

14 DTAC 114.1 -158.3 -48.2 222.2 18.3 JMART -11.8 -4.2 -0.3 0.3 -14.0 TCAP 518.8 HFT -40.6 CPF 2,781.7 MINT-W4 -238.0

15 PTTEP 93.8 72.4 -126.1 807.4 268.1 CPF -10.5 17.1 30.4 0.7 -13.1 THAI 477.5 IFEC -40.2 BIGC 2,715.7 TRC -196.6

16 TISCO 93.0 35.9 1.4 3.1 44.2 TVO -7.6 -0.3 0.2 -11.0 0.6 AOT 472.7 RML -36.8 MAKRO 2,612.1 LRH -180.4

17 THCOM 75.2 297.3 90.1 98.6 51.5 MBKET -7.4 -12.2 -7.1 -0.7 0.0 BBL 423.3 TRC -36.6 SCB 2,339.2 GUNKUL -172.7

18 TCAP 69.5 135.9 124.8 9.3 16.7 MCOT -7.0 -13.8 -9.4 4.7 0.8 BEC 392.6 MBKET -36.3 CPN 1,973.6 IRPC -154.2

19 CPALL 56.8 101.2 -10.8 128.3 221.8 BCP -6.5 4.1 24.8 2.0 5.7 BGH 330.4 HEMRAJ -35.7 SPALI 1,961.6 CNT -136.3

20 LPN 52.4 27.5 16.4 10.3 15.3 EASTW -6.4 -2.7 -2.2 -0.4 -8.1 TUF 263.0 UMI -33.3 TUF 1,848.3 WHA -119.6

% % of % of

Turn. paidup paidup

1 N-PARK 4.71 1 TISCO-P 66.16 65.86

2 IEC 1.96 2 BBL 31.19 29.99

3 CPN 28.89 3 KBANK 29.38 28.50

4 TMB 19.84 4 SPALI 21.93 17.94

5 LH 52.35 5 GOLD-W1 21.50 14.87

6 QH 12.62 6 LPN 20.97 21.73

7 ASP 14.38 7 TWFP 19.93 24.77

8 BAY 32.45 8 E-W1 19.42 22.27

9 SIRI 3.26 9 THRE 18.01 15.50

10 INTUCH 44.90 10 LH 17.90 21.18

11 BLAND 1.13 11 TCAP 16.29 12.60

12 GJS 2.11 12 SPCG-W1 16.29 13.31

13 MK 32.60 13 INTUCH 15.90 5.41

14 KGI 16.00 14 DTAC 15.76 13.33

15 PAP 8.84 15 BAY 15.47 13.89

16 JAS 4.50 16 AP 15.13 12.92

17 AP 9.73 17 CITY 15.10 9.51

18 HEMRAJ 16.54 18 THIP 14.64 12.64

19 CPALL 5.70 19 TISCO 14.16 13.69

20 KTB 8.44 20 LALIN 14.01 13.53

Source : SET.OR.TH

16 May 2013

May 13 May 13

Total Volume Shares

(Last)

NVDR Shrs. Paid up CapitalNVDR Shrs.

15-May-13 2-Jan-13

Net Buy Net Sell Net Buy Net Sell

2 Jan- 15 May 131-15May 13

1,908,842,894

108,209,900 116,300,000 22,400 22,300 224,509,900 -8,090,100

90,813,000

33,858

52,543,200 13,139,800 65,683,000

NetBuy Sell Total

52,195,230 4,984,200 57,179,430

572,486,791 -6,907,100

703,239,185 682,155,834

595,338,690 97,720,100 188,533,100

1,716,553,249

39,403,400

418,421,323

2,393,260,193

376,377,333

74,970,598 89,947,903

47,211,030 307,949,569

1,475,698,768

25,860,532 15,678,200

14,975,200 11,410,600

2,705,900 14,010,000 16,715,900 -11,304,100

13,192,900

41,538,732 10,182,332

16,540,600 10,941,400

38,352,067 30,980,533 309,419,140 320,609,239

1,782,300

13,741,000 2,799,600

34,666,300 3,685,767

9,506,055

347,000,000

1,894,216 2,354,634

67,380,642 77,281,246

3,512,494,860

10,025,921,523

632,583,436 544,461,149

1,794,600,831 2,123,251,472

161,065,653 1,277,816,397 208,208,582

45,618,400 37,278,800 279,999,581

727,878,228

8,000,000

2,859,920,138

45,301,700

99,645,251

367,964,647

300,000,000

2,409,500 6,137,000

6,099,000

2,536,699 3,811,200

2,598,300 3,500,700

3,727,500

6,347,899

111,592,900 825,000,000

6,684,700 4,659,100

1,171,300 1,011,300

103,075,397

115,558,200 -902,400

1,318,000

-1,274,501

28,526,200

939,676,095 843,803,210

432,828,679 3,041,500

6,074,143,747 9,555,800

11,424,100

1,204,400

509,803,603 173,363,101 3,206,420,305

2,367,811,000 373,221,964 315,525,949

10,445,316 3,914,006 14,359,322 6,531,310

12,490,400 1,066,300 13,556,700

5,671,900 1,012,800

10,735,200

104,800

5,936,200 4,799,000

9,774,800109,500

10,646,800 10,751,600

8,491,100

10,542,000

5,370,800

9,665,300

2,329,300 7,700,100

1,137,200

10,899,9009,695,500

Most Active Volume (shares) NVDR Shares to Total Paid-up Shares(%)

NET BUY NET SELL Month to Date Year to Date

Most Active Values (Btmn)

THAI NVDR : Top Ranking

See important disclosures at the end of this report Powered by Enhanced Datasystems’ EFATM

Platform

Results Review, 14 May 2013

Ticon Ind Connection (TICON TB) Buy Property - Real Estate Target Price: THB31.0

Market Cap: USD723m Price: THB23.5

Waiting For The Next Round Of Asset Sale

Macro

2.00

Risks

2.00

Growth

2.00

Value

2.00

TICON’s 1Q13 results were soft as it had no asset sales in the period. However, its 2013 revenue growth target of 30% should be achievable, with targeted sales at THB6bn. Its FV in end-2012 stood at THB21. We expect its FV to rise to THB31.00/share by year-end on the back of rising asset prices, more new rental space and a stronger balance sheet after the conversion of 245m warrants in end-2013.

No asset sale in 1Q13 but rental income was healthy. Overall, Ticon

Industrial Connection (TICON)’s core earnings were weak, as it did not book any asset sales unlike in 1Q12 and 4Q12. Rental income surged 27% y-o-y to THB278m, a contrast from that of 1Q12 which was affected by the floods in end-2011.

Rental gross margin improved to 65%. TICON’s gross margin for

rental sank to its low of 55% in 1Q12 due to the floods, but gradually rebounded to 65% currently. However, the margin has yet to reach its normal level of >70%, as its occupancy rate is still low at 72% vs 80% prior to the floods.

1Q13 earnings ticked up y-o-y. 1Q13 earnings came in at THB255m

(+6.3% y-o-y, -72% q-o-q), including THB70m in insurance claims.

Net rental space in end-1Q13 grew by 44,500 sq m, from 841,131 sq

m in end-2012. Its warehouse space increased at a faster rate of 35,300 sq m, compared to factory space which only increased by 9,250 sq m.

Aggressive target for 2013. The company targets its FY13 revenue to

grow 30% y-o-y from THB5.8bn to THB7.5bn, of which THB6bn would come from the proceeds of the sale of its assets into property funds, TFUND (NR) and TLOGIS (NR), and a REIT. We expect its net new rental space for ready-built factories (RBF) and warehouses to grow to 150,000 sq m and 200,000 sq m respectively this year, more than double the total rental space of 150,000 sq m in 2012. Rental rates are likely to increase by 10%-15% in the non-flood zone areas, where the occupancy rates are full.

Source: Bloomberg

Avg Turnover (THB/USD) 145m/4.92m

Cons. Upside (%) 19.1

Upside (%) 31.9

52-wk Price low/high (THB) 12.1 - 26.3

Free float (%) 57

Shareholders (%)

Rojana Industrial Park 20.6

Thai NVDR 7.9

Shariah compliant

Wanida Geisler 66 2862 9748

[email protected]

Source: Company data, RHB Estimates

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Ticon Ind Conection PCL (TICON TB)

Price Close Relative to Stock Exchange of Thailand Index (RHS)

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Forecasts and Valuations Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

Total turnover (THBm) 2,784 1,997 5,557 7,385 8,217

Recurring net profit (THBm) 988 477 1,649 2,025 2,293

Net profit growth (%) 25.8 (46.9) 196.9 23.3 14.0

Consensus EPS (THB) 1.56 1.61

EPS (THB) 1.22 0.60 1.56 1.59 1.60

DPS (THB) 1.00 0.40 1.00 1.05 1.20

Dividend Yield (%) 4.3 1.7 4.3 4.5 5.1

Return on average assets (%) 7.0 3.1 7.4 7.2 7.0

Return on average equity (%) 15.5 7.7 19.1 15.2 13.5

P/E (x) 19.3 39.5 15.0 14.8 14.7

P/B (x) 2.88 3.20 2.62 2.03 1.94

Net debt to equity (%) 91.9 133.6 120.4 72.6 85.8

Ticon Ind Conection (TICON TB) 14 May 2013

See important disclosures at the end of this report 2

Figure 1: 1QFY13 results review

Year to 31 Dec 1QFY13 y-o-y q-o-q

(THBm) % % Remarks

Rental and Service income 278 26.9 (5.1)

Meaningful recovery from 1Q12 which was hard hit by end-11 floods

Total revenue 286 (71.3) (92.6) EBITDA 356 (36.2) (77.4) EBIT 251 (47.4) (82.8)

Net profit 255 6.3 (71.7) Better than expected, with an insurance claim of THB70m

Gross margin%

-Rental 65.1

Improved from 55% in 1Q12 and 62% in 4Q12

Overall gross margin% 64.0

EBITDA margin% 124.5

Net margin% 89.2

Source: TICON, RHB

Figure 2: Breakdown of rental spaces

end-2010 end-2011 end-2012 end-March

(sq m) (sq m) (sq m) (sq m)

Leased 400,195 592,867 518,948 565,308

Pre-leased 76,180 49,381 89,695 44,360

Available 135,919 40,250 187,938 231,463

Under Construction

52,550 195,431 183,707 189,607

Site Preparation

292,668 914,215 1,012,679 1,451,900

Total TICON factories and warehouses

957,512 1,792,144 1,992,967 2,482,638

Source: TICON, RHB

Figure 3: Breakdown of occupancy rates

end-2010 end-2011 end-2012 End Mar-13

Factories 82% 93% 76% 72%

Warehouses 71% 97% 77% 73%

Factories & Warehouses

78% 94% 76% 72%

Source: TICON, RHBRI



Financial Exhibits



Profit & Loss (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

Total turnover 2,784 1,997 5,557 7,385 8,217

Cost of sales (1,282) (988) (3,204) (4,208) (4,653)

Gross profit 1,502 1,009 2,353 3,177 3,564

Other operating costs (300) (341) (418) (498) (579)

Operating profit 1,202 668 1,935 2,680 2,985

Operating EBITDA 1,472 989 2,324 3,183 3,515

Depreciation of fixed assets (270) (321) (389) (504) (530)

Operating EBIT 1,202 668 1,935 2,680 2,985

Net income from investments 207 161 169 188 244

Other recurring income 150 132 287 253 263

Interest expense (261) (267) (411) (473) (509)

Exceptional income - net (219) (59) (424) (558) (614)

Pre-tax profit 1,079 635 1,556 2,090 2,369

Taxation (258) (199) (260) (492) (548)

Profit after tax & minorities 821 436 1,296 1,598 1,821

Net income to ord equity 821 436 1,296 1,598 1,821

Recurring net profit 988 477 1,649 2,025 2,293

Cash flow (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

Operating profit 1,202 668 1,935 2,680 2,985

Depreciation & amortisation 270 321 389 504 530

Change in working capital 16 (145) 402 34 150

Other operating cash flow 130 122 340 219 263

Operating cash flow 1,618 966 3,066 3,436 3,928

Interest paid (261) (267) (411) (473) (509)

Tax paid (258) (199) (260) (492) (548)

Cash flow from operations 1,099 500 2,395 2,471 2,871

Capex (469) (2,706) (3,512) (5,259) (2,925)

Other investing cash flow (230) (184) (1,502) (992) (1,071)

Cash flow from investing activities (699) (2,890) (5,014) (6,252) (3,996)

Dividends paid (537) (924) (156) (881) (1,199)

Proceeds from issue of shares 339 642 964 4,593 -

Increase in debt 706 2,583 1,844 (200) 1,800

Other financing cash flow 9 146 (27) 8 50

Cash flow from financing activities 517 2,447 2,625 3,520 651

Cash at beginning of period 113 1,030 1,087 1,093 832

Total cash generated 917 57 6 (261) (473)

Implied cash at end of period 1,030 1,087 1,093 832 359



Financial Exhibits



Balance Sheet (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

Total cash and equivalents 1,030 1,087 1,093 832 359

Accounts receivable 14 107 119 120 120

Other current assets 79 62 126 140 140

Total current assets 1,123 1,256 1,338 1,092 619

Total investments 1,821 1,898 2,755 3,867 5,024

Tangible fixed assets 9,228 11,586 14,560 18,714 20,454

Total other assets 313 549 1,088 1,200 1,400

Total non-current assets 11,362 14,033 18,403 23,781 26,877

Total assets 12,485 15,289 19,741 24,874 27,497

Short-term debt 1,159 2,695 3,095 2,900 3,200

Accounts payable 113 329 666 700 800

Other current liabilities 329 44 185 200 250

Total current liabilities 1,601 3,068 3,946 3,800 4,250

Total long-term debt 5,014 6,061 7,505 7,500 9,000

Other liabilities 273 419 392 400 450

Total non-current liabilities 5,287 6,480 7,897 7,900 9,450

Total liabilities 6,888 9,548 11,843 11,700 13,700

Share capital 686 781 877 1,136 1,136

Retained earnings reserve 1,948 1,450 2,609 3,326 3,949

Other reserves 2,963 3,510 4,378 8,712 8,712

Shareholders' equity 5,597 5,741 7,864 13,174 13,797

Other equity - - 34 - -

Total equity 5,597 5,741 7,898 13,174 13,797

Total liabilities & equity 12,485 15,289 19,741 24,874 27,497

Key Ratios (THB) Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

Revenue growth (%) 17.3 (28.3) 178.3 32.9 11.3

Operating profit growth (%) 45.6 (44.4) 189.5 38.5 11.4


EPS growth (%) 23.1 (51.2) 162.7 1.6 1.0

Bv per share growth (%) 7.8 (9.9) 22.0 29.3 4.7

Operating margin (%) 43.2 33.5 34.8 36.3 36.3

Net profit margin (%) 29.5 21.9 23.3 21.6 22.2




DPS 1.00 0.40 1.00 1.05 1.20

Recurrent cash flow per share 1.63 0.68 2.89 2.46 2.53



SWOT Analysis

Thailand’s largest developer/operator of ready-built factories and warehouses

Uses REITs and property funds as vehicles to monetize assets

Its industrial estate (IE) in Ayuthaya will take time to regain investor confidence post-2011 floods

Sensitive to external and internal risks

Healthy FDI to Thailand

Rental income from a standard three-year contract is a buffer against any downturn

New public infrastructure like high-speed trains and a flood protection system will restore value of its Ayuthaya properties

Demand is slow in the Ayuthaya flood zone, where half of its rental properties are located

High gearing

Source: Company data, RHB Estimates Source: Company data, RHB Estimates

Company Profile Ticon Industrial Connection is Thailand's largest developer and operator of ready-built factories and warehouse spaces for rent.

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P/BV (x) vs ROAE

P/B (x) (lhs) Return on average equity (rhs)



Recommendation Chart

Source: RHB Estimates, Bloomberg

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May-08 Aug-09 Nov-10 Mar-12

Price Close

NR

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31.0

Recommendations & Target Price

Buy Neutral Sell Trading Buy Take Profit Not Rated

Source : RHB Estimates, Bloomberg

Date Recommendation Target Price Price

2013-03-15 Buy 31.0 25.3

2012-08-08 Buy 15.0 12.6

See import ant disclosures at the end of th is report Powered by Enhanced Datasystems’ EFATM Platform

Results Review , 15 May 2013

Oishi Group PCL (OISHI TB) SellConsumer Cyclical - Retail Target Price: THB130Market Cap: US D973m Price : THB154

Pallid Numbers From Soft Drinks Segment in 1Q13 Macro ��

Risks ��

Growth �

Value �

Oishi’s 1QCY13 results reflected several negative fa ctors: i.) profit from its green tea drinks segment sank and have shown no signs of recovering, ii) sales jumped 6% y-o-y but its absol ute SG&A spiked up by 50%, mainly in the drinks business. As group net debt has risen to 0.7x while interest expense are shooting up, this i s an unrealistic price level for investing. Given the company’s current P/ E of 40x and slow growth, we maintain a Sell rating, a THB130 TP.

♦ 1Q13 earnings -22%/-72% below our/consensus estimat e as drink

sales plummet. 1Q13 earnings stood at THB86m (-65% y-o-y, +26% q-o-q). The surprise was in the higher-than-expected SG&A and interest expenses. The y-o-y declines are attributed mainly to the sharp drop in net profit from the company’s green tea drinks segment, while net profit from the food business came in very strong.

♦ Net profit from drink business sinks to THB3m (-99% y-o-y, -93%). Performance from this segment has been weak for three consecutive quarters owing to intense competition from its main rival, Ichiton. Despite the fact that sales in this segment rose 7% y-o-y, the company’s promotion and market expenses grew at a faster 50% to 60% y-o-y, which resulted in its profit plummeting and net profit margin shrinking to only 0.2% vs 16% in 1Q12.

♦ Very strong earnings from food business. Nevertheless, earnings from the group’s food segment soared 137% y-o-y and 295% q-o-q. Propelled by a consistent sales growth of 25%, the segment’s net profit improved significantly to THB83mn due to tight cost controls.

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Oishi Group Plc (OISHI TB)


11111222

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m

Source: Bloomberg

Avg Turnover (THB/USD) 23.3m/0.79m


Upside (%) -15.6

52-wk Price low/high (THB) 117 - 226

Free float (%) 20.7%

Shareholders (%)

ThaiBev 79.3%

Shariah compliant

Chalie Kueyen 66 2862 9745 [email protected]

Forecasts and Valuations Dec-10 Dec-11 Dec-12 Dec-1 3F Dec-14F


Reported net profit (THBm) 975 808 654 637 756

Recurring net profit (THBm) 965 810 660 637 756

Recurring net profit growth (%) 28.5 (16.1) (18.5) (3.4) 18.7

Core EPS (THB) 5.15 4.32 3.52 3.40 4.03

Core P/E (x) 29.9 35.7 43.8 45.3 38.2


P/B (x) 10.8 9.9 9.3 8.7 7.2

P/CF (x) 24.0 22.3 17.9 13.1 11.8

EV/EBITDA (x) 20.7 23.3 27.2 25.7 21.9


Our vs consensus EPS (%) 0.0 0.0


Oishi Group PCL (OISHI TB) 15 May 2013


Figure 1: OISHI’s quarterly performance

Unit : T H B m 1Q12 2Q12 3Q12 4Q12 1Q13 QoQ YoY

Sales 2,427 3,401 2,705 3,101 2,808 -9% 16%Cost of sales 1,605 2,279 1,979 2,169 1,894 -13% 18%Gross profit 822 1,123 726 933 914 -2% 11%SG&A 549 773 764 870 822 -5% 50%Operating profit 273 349 (38) 63 92 45% -66%Other income 10 12 15 31 18 -40% 82%EBIT 283 361 (22) 94 110 17% -61%Interest Expenses 9 10 11 16 15 -5% 63%Pretax profit 274 352 (34) 78 95 22% -65%FX gain/loss (1) (4) 5 (37) (7) -81% 1081%

Impairments (from flooding) - - - (6) -

Income Tax 27 2 (20) 16 2 -89% -93%Net profit 247 347 (9) 68 86 26% -65%EPS (THB) 1.32 1.85 (0.05) 0.36 0.46 26% -65%

Key figures and ratio Balance sheet (THBm)Cash and cash equivalents 39 111 94 96 131 A/R 800 865 842 709 1,001 Inventories-net 226 384 359 310 435 PP&E 3,254 3,413 4,161 4,742 5,469 Total assets 5,981 6,382 6,898 7,260 8,209

S-T debt 1,054 917 1,766 1,836 1,478 A/P 850 1,093 898 933 1,099 L-T debt - - - 58 1,000 Total liabilities 2,829 3,012 3,837 4,139 5,002 Equity 3,152 3,371 3,062 3,121 3,207 Key ratios Net D/E 0.32 0.24 0.55 0.56 0.73 ROA (%) 16.5% 21.7% -0.5% 3.8% 4.2%ROE (%) 31.4% 41.2% -1.2% 8.8% 10.8%

Gross margin (%) 33.9% 33.0% 26.8% 30.1% 32.5%EBIT margin (%) 11.7% 10.6% -0.8% 3.0% 3.9%Net margin (%) 10.2% 10.2% -0.3% 2.2% 3.1%SG&A/sales (%) 22.6% 22.7% 28.2% 28.0% 29.3%Effective tax rate 9.9% 0.7% -59.2% -20.5% -1.9%

Figure 2: OISHI’s performance by segment

T H B mn 1Q12 2Q12 3Q12 4Q12 1Q13 QoQ YoY

Breakdown by segment Sales (THBm) 2,427 3,402 2,704 3,101 2,808 -9% 16% - Beverage 1,257 2,012 1,344 1,701 1,348 -21% 7% - Food 1,170 1,390 1,360 1,400 1,460 4% 25%

Net profit (THBm) 247 350 (9) 66 86 30% -65% - Beverage 212 331 (51) 45 3 -93% -99% - Food 35 19 42 21 83 295% 137%

by percent Sales - Beverage 52% 59% 50% 55% 48% - Food 48% 41% 50% 45% 52%

Net prof it - Beverage 86% 95% n.a. 68% 3% - Food 14% 5% n.a. 32% 97%

Net profit margin 10.2% 10.3% -0.3% 2.1% 3.1% - Beverage 16.9% 16.5% -3.8% 2.6% 0.2% - Food 3.0% 1.4% 3.1% 1.5% 5.7%





Financial Exhibits

Profit & Loss (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec -14F

Total turnover 8,733 9,501 11,634 14,322 17,521

Cost of sales (5,900) (6,558) (8,031) (9,805) (11,887)

Gross profit 2,833 2,943 3,604 4,517 5,634

Gen & admin expenses (1,785) (2,129) (2,956) (3,858) (4,822)

Operating profit 1,047 814 648 659 811

Operating EBITDA 1,411 1,291 1,160 1,212 1,409


Operating EBIT 1,047 814 648 659 811


Interest expense - (16) (46) (50) (70)

Exchange gains (24) 26 (37) - -

Exceptional income - net 10 (2) (6) - -

Pre-tax profit 1,057 859 628 685 827

Taxation (82) (50) 26 (48) (70)

Profit after tax & minorities 975 808 654 637 756

Reported net profit 975 808 654 637 756

Recurring net profit 965 810 660 637 756



Operating profit 1,047 814 648 659 811


Change in working capital (256) (917) 283 923 698

Other operating cash flow 47 937 233 112 406

Operating cash flow 1,201 1,311 1,676 2,247 2,513

Interest paid - (15) - - -

Tax paid - - (58) (48) (70)

Cash flow from operations 1,201 1,296 1,618 2,199 2,443

Capex (1,383) (1,530) (1,766) (1,500) (1,500)

Other investing cash flow - - 10 - -

Cash flow from investing activities (1,383) (1,530) (1,756) (1,500) (1,500)

Dividends paid (668) (600) (431) (382) (538)

Increase in debt 600 581 655 (84) (284)

Other financing cash flow - - (46) 50 70

Cash flow from financing activities (68) (19) 178 (417) (752)

Cash at beginning of period 558 309 56 96 362

Total cash generated (249) (253) 40 282 190

Implied cash at end of period 309 56 96 378 553




Financial Exhibits

Balance Sheet (THBm) Dec-10 Dec-11 Dec-12 Dec-13F Dec -14F

Total cash and equivalents 309 56 96 362 377

Inventories 496 225 310 490 274

Accounts receivable 606 502 709 859 1,051

Other current assets 87 1,467 1,061 871 1,162

Total current assets 1,499 2,251 2,176 2,582 2,864


Intangible assets 139 118 33 56 56

Total other assets 179 220 310 228 47


Total assets 4,783 5,719 7,260 8,604 9,408

Short-term debt - 1,181 2,764 1,880 1,796

Accounts payable 796 643 933 1,226 1,486

Other current liabilities 678 923 384 1,395 1,517


Total long-term debt 627 66 58 800 600

Total non-current liabilities 627 66 58 800 600


Share capital 375 375 375 375 375


Other reserves 609 646 646 646 646


Total equity 2,682 2,905 3,121 3,303 4,009




Revenue growth (%) 22.5 8.8 22.5 23.1 22.3

Operating profit growth (%) 44.5 (22.3) (20.4) 1.6 23.2

Net profit growth (%) 29.7 (17.1) (19.1) (2.6) 18.7

EPS growth (%) 29.5 (17.1) (19.1) (2.6) 18.7

Bv per share growth (%) 14.9 8.3 7.4 5.8 21.4










SWOT Analysis

• An integral part of Thai Beverage Plc (THBEV)

• Intense competition has prompted the company to increase marketing expenses to defend its market share

• Strong distribution channels and networks in the local and international markets

• OISHI’s weak market strategy in competing against its rivals

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Company Profile OISHI, a subsidiary of ThaiBev, operates two main business segments – Japanese food franchise and non-alcoholic beverages under the well-recognized “OISHI” brand. Its beverages and food segments contribute 55%:45% of sales and 75%:25% of net profit.




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2013-05-07 Sell 130 158

2012-11-13 Neutral 190 161

2012-08-14 Buy 190 175


See import ant disclosures at the end of this report Powered by Enhanced Datasystems’ EFATM Platform


Sanko Diecasting (SANKO TB) SellConsumer Cyclical - Auto Parts & Equipment Target Price: THB1.66Market Cap: US D19.3m Price : THB2.60

Higher Tax And Lower Margins Erode 1Q Earnings

Macro ��

Risks ��

Growth ��

Value ��

Sanko, which made its debut on the SET on 9 May, is no w trading 100% higher than its IPO price. Its 1Q13 earnings of THB430k (-93% y-o-y) only comprised 1.1% of our full-year forecas t, mainly due to a 6% y-o-y drop in sales and a high effective tax rat e of 23% (vs our estimate of 10% for FY13F). This prompts us to trim our TP from THB2.00 to THB1.66, based on a 12x P/E. Maintain SELL.

♦ Operating profit tanks on lower sales, GPM. Sanko Diecasting (Sanko)’s 1Q13 operating profit plunged to THB493k (-90% y-o-y) on the back of lower sales of THB104.3m (-6% y-o-y) while gross profit margin contracted from 19% in 1Q12 to 15% in 1Q13. The disappointing sales were due to a decline in new orders and the fact that the company cancelled some orders from clients who asked for steep discounts. Its GPM is not expected to improve until 4Q13, when its new melting furnace starts operating. Thus, we trim our FY13F GPM slightly, from 16% to 15%.

♦ Tax rate higher than forecast. In 2012, Sanko’s effective tax rate stood at only at 6%. In 1Q13, however, this rose to 23% due to decreasing tax benefits from the Board of Investment (BoI) as well as deferred tax items. As a result, the company’s 1Q13 net profit came in at only THB430k, or a mere 1.1% of our full-year forecast. We are raising our FY13F effective tax rate assumption from 10% to 14% as the proportion of Sanko’s sales eligible for BoI’s tax benefit was lower than anticipated.

♦ Expensive valuation. We downgrade our FY13F fully-diluted EPS by 18% to THB0.14, which accordingly lowers our TP to THB1.66, based on a 12x FY13F P/E. Sanko shares are now trading at an 18.6x P/E; this is quite pricey compared to established automotive plays like SAT and IHL, which are trading in a tight 11x–12x range. Maintain SELL.

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Source: Bloomberg


Cons. Upside (%) -61.5

Upside (%) -36.2


Free float (%) 20

Shareholders (%)

Pinthong Group 40.3

Vnet Capital 22.4

Masami Katsumoto 17.0

Shariah compliant

Wasu Mattanapotchanart +66 2862 9999 ext 2029 [email protected]


Total turnover (THBm) 291 352 474 522 562

Reported net profit (THBm) 12.3 7.2 19.3 31.3 40.8

Recurring net profit (THBm) 12.3 7.2 19.3 31.3 40.8

Recurring net profit growth (%) 0.0 (41.7) 168.1 62.6 30.0

Core EPS (THB) 0.07 0.04 0.11 0.16 0.19

DPS (THB) 0.00 0.04 0.00 0.00 0.00

Dividend Yield (%) 0.0 1.3 0.0 0.0 0.0

Core P/E (x) 37.1 63.6 23.7 16.4 14.0


P/B (x) 4.80 4.97 4.11 2.95 2.54

P/CF (x) 14.5 na 9.5 9.7 8.9

EV/EBITDA (x) 17.8 40.6 15.6 12.4 11.0


Our vs consensus EPS (%) 0.0 0.0


Sanko Diecasting (SANKO TB) 15 May 2013


Financial Exhibits


Total turnover 291 352 474 522 562

Cost of sales (246) (308) (401) (444) (466)

Gross profit 45 44 74 78 95

Gen & admin expenses (39) (45) (58) (52) (59)

Operating profit 7 (1) 15 26 37

Operating EBITDA 27 13 36 48 62


Operating EBIT 7 (1) 15 26 37



Pre-tax profit 14 7 20 36 47

Taxation (1) - (1) (5) (7)

Profit after tax & minorities 12 7 19 31 41

Reported net profit 12 7 19 31 41

Recurring net profit 12 7 19 31 41



Operating profit 7 (1) 15 26 37


Change in working capital 8 (11) 21 15 15

Operating cash flow 35 2 57 64 77

Interest paid (1) (4) (8) (6) (6)

Tax paid (2) - (1) (5) (7)

Cash flow from operations 32 (2) 48 53 64

Capex (45) (49) (47) (100) (65)

Other investing cash flow 1 (2) 1 - -

Cash flow from investing activities (44) (52) (47) (100) (65)

Dividends paid (2) (6) - (6) (9)

Proceeds from issue of shares - - - 57 -

Increase in debt 19 54 7 (9) 7

Other financing cash flow - 0 - - -

Cash flow from financing activities 17 48 7 42 (2)

Cash at beginning of period 15 18 12 20 16

Total cash generated 4 (6) 9 (4) (3)

Implied cash at end of period 19 12 21 16 13




Financial Exhibits


Total cash and equivalents 18 12 20 16 13

Inventories 25 30 42 44 46


Other current assets 10 10 21 17 18

Total current assets 100 111 148 154 160

Tangible fixed assets 106 153 196 274 314



Total non-current assets 109 158 199 277 317

Total assets 210 269 348 431 477

Short-term debt 36 68 84 92 99

Accounts payable 67 67 93 107 112

Other current liabilities 8 8 20 17 18

Total current liabilities 111 143 197 216 229

Total long-term debt 4 32 38 20 20

Other liabilities - 1 2 2 3

Total non-current liabilities 4 34 39 22 23

Total liabilities 114 176 236 237 252

Share capital 88 88 88 110 110

Retained earnings reserve 7 4 23 49 80

Other reserves - - - 35 35

Shareholders' equity 95 92 111 194 225

Total equity 95 92 111 194 225

Total liabilities & equity 210 269 348 431 477



Revenue growth (%) 0.0 20.8 34.9 10.1 7.5

Operating profit growth (%) 0.0 (115.8) 0.0 68.9 39.8


EPS growth (%) 0.0 (41.7) 168.1 44.5 17.0

Bv per share growth (%) 0.0 (3.4) 20.9 39.4 16.1

Operating margin (%) 2.2 (0.3) 3.3 5.0 6.5





DPS 0.00 0.04 0.00 0.00 0.00

Recurrent cash flow per share 0.18 (0.01) 0.27 0.27 0.29




SWOT Analysis

• Known as an efficient producer of aluminium parts for landed vehicles using high-pressure diecasting (HPDC) technology

• Flexible lines of production allow it to cater to different industries (ie. auto electrical appliances and agriculture)

• Fierce competition in the market for aluminium parts for cars

• Potential entry of bigger foreign players when the AEC takes off

• Money raised from IPO could be spent on better equipment.

• Weak bargaining power with clients resulted in sub-par gross margins for some years.

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Company Profile Sanko Diecasting produces aluminium parts for landed vehicles and electronic devices using high-pressure diecasting (HPDC) technology.




2.50

2.51

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2.55

2.56

2.57

May-13

Price Close

NR





2013-05-10 Not Rated 2.00 2.56


See import ant disclosures at the end of this report Powered by Enhanced Datasystems’ EFATM Platform


Amata Corporation (AMATA TB) BuyProperty - Real Estate Target Price: THB35.0Market Cap: US D823m Price : THB22.9

Strong Growth Catalyst In 2H13

Macro ��

Risks ��

Growth ��

Value ��

1Q13 was AMATA’s weakest quarter this year. We rema in optimistic over its earnings growth outlook, as its substantia l backlog is waiting to be realized via future sales and improved margins. We maintain our full-year profit growth forecasts of c.30% p.a. for 2013 -2014. We are also positive on the company’s plan to rapidly unlock as set value. Maintain BUY, with our TP at THB35, based on a sum-of-the-part s valuation.

♦ Revenue dipped 15% y-o-y and 52% q-o-q. AMATA booked land sales of 360 rai in 1Q13 (1Q12: 195 rai, 4Q12: 640 rai). Although sales volume was higher y-o-y, the sales value declined due to lower prices. YTD land sales are at 260 rai, or 9% of its full-year target. Nevertheless, Management is retaining the 2013 land sales target at 3,000 rai (+7% y-o-y). Generally, 1Q is a weak quarter and we believe land sales will pick up in 2Q and peak in 4Q. Its backlog as at end-March was at THB5.8bn, which will be realized as sales when the titles are transferred

♦ Gross margin down 40%. Its 1Q13 gross margin plunged 40% compared to its normal level of over 50% from the booking of low-margin land sales, which was a one-time event. Management expects its gross margin to rebound to above 50% in the following quarters, as it has only a few low-margin land sale contracts left.

♦ Ongoing plans to unlock asset value. These include: i) its subsidiary Amata VN will be listed in 3Q13, ii) the setting up of its associate Amata B. Grimm Power’s infrastructure fund is pending approval from the Securities Exchange Commission, iii) Amata Summit Ready Built, a subsidiary, will soon finalize its plans to sell rental space (ie ready-built factories) to a real estate investment trust (REIT).

♦ Change in accounting policy of investment assets. In 1Q13, AMATA changed the method of pricing its assets from fair value to cost. The company will no longer be able to realize gains from the appreciation of asset prices in its P/L. Note that in 2012, it changed the accounting policy for its assets from cost to fair value. This year, it reverted the basis for pricing back to the assets’ costs, in order to comply with the group’s accounting policy.

73

82

91

99

108

117

126

134

143

13

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17

19

21

23

25

27

29

Amata Corporation Plc (AMATA TB)


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Jul-1

2

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-12

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m

Source: Bloomberg



Upside (%) 52.8


Free float (%) 67

Shareholders (%)

Vikrom Kromadit 24.7

Thai NVDR 9.9

Shariah compliant

Wanida Geisler 66 2862 9748 [email protected]



Recurring net profit (THBm) 654 901 1,055 1,898 2,454

Net profit growth (%) 87.1 29.5 60.4 31.3 29.3


EPS (THB) 0.65 0.84 1.35 1.78 2.30

DPS (THB) 0.22 0.34 0.55 0.71 0.92

Dividend Yield (%) 0.9 1.5 2.4 3.1 4.0



P/E (x) 35.1 27.1 16.9 12.9 10.0

P/B (x) 4.49 3.10 2.76 2.91 2.45



Amata Corporation (AMATA TB) 15 May 2013


Figure 1: 1QFY13 results review Year to 31 Dec 1QFY13 y-o-y q-o-q (THBm) % % Remarks

Land sales 709 (15.0) (52.3) Booking of 360 rai of land (1Q12: 195 rai, 4Q12:640 rai)

Recurring income 422 22.0 7.7 Healthy growth

Total revenue 1131 (4.2) (39.8)

Gross profit 455 (32.5) (55.4)

EBIT 249 (55.0) (68.1)

Net profit 130 (58.1) (80.5) 57% below consensus

Gross margin%-Land 40.2

Gross margin dropped sharply from low-margin land sales

Gross margin% 40.2

SG&A/sales % 22.0

Net margin% 11.5

Source: RHB estimates, company data



Financial Exhibits


Total turnover 3,046 3,647 5,307 8,674 11,098

Cost of sales (1,637) (1,888) (2,605) (4,295) (5,424)

Gross profit 1,409 1,759 2,702 4,379 5,673

Other operating costs (505) (620) (905) (1,561) (2,053)

Operating profit 904 1,139 1,797 2,818 3,620



Operating EBIT 904 1,139 1,797 2,818 3,620

Net income from investments 127 137 120 132 145



Other non-recurring income 50 - 511 - -

Pre-tax profit 924 1,259 2,260 2,805 3,635

Taxation (145) (215) (535) (348) (454)

Minority interests (83) (143) (280) (560) (728)

Profit after tax & minorities 696 901 1,445 1,898 2,454

Reported net profit 696 901 1,445 1,898 2,454

Recurring net profit 654 901 1,055 1,898 2,454



Operating profit 904 1,139 1,797 2,818 3,620


Change in working capital 1,494 (482) 731 (517) 1,362

Other operating cash flow 176 1,763 762 (282) (819)


Interest paid (239) (293) (397) (376) (364)

Tax paid (145) (215) (535) (348) (454)


Capex (1,219) (3,135) (1,539) (2,909) (1,156)

Other investing cash flow (404) (288) (44) (73) (77)


Dividends paid (267) (320) (533) (672) (870)

Increase in debt (550) 1,930 (150) 867 (1,350)

Other financing cash flow 83 143 280 560 728

Cash flow from financing activities (734) 1,753 (403) 755 (1,492)

Cash at beginning of period 1,038 1,099 1,543 2,032 1,238

Total cash generated 61 444 489 (794) 784

Implied cash at end of period 1,099 1,543 2,032 1,238 2,022




Financial Exhibits


Total cash and equivalents 1,099 1,543 2,032 1,238 2,022


Other current assets 4,124 5,318 6,417 6,347 6,214






Total assets 14,381 20,749 23,848 24,124 25,844

Short-term debt 1,288 1,542 1,465 1,350 1,000

Accounts payable - - - 43 43

Other current liabilities 3,280 4,003 4,670 5,696 6,925



Other liabilities 996 1,238 1,411 75 75



Share capital 1,067 1,067 1,067 1,067 1,067


Other reserves 174 174 173 173 173


Minority interests 669 1,927 2,340 2,574 2,831

Total equity 6,110 9,819 11,193 10,959 12,801




Revenue growth (%) 49.7 19.7 45.5 63.4 27.9

Operating profit growth (%) 141.1 26.0 57.8 56.8 28.5


EPS growth (%) 87.1 29.5 60.4 31.3 29.3

Bv per share growth (%) (1.4) 45.0 12.2 (5.3) 18.9






DPS 0.22 0.34 0.55 0.71 0.92





SWOT Analysis

• Thailand’s largest industrial estate (IE) operator by sales and landbank

• Quick to unlock asset value, by listing Amata VN, setting up an infrastructure fund for Amata B-GRIMM and a REIT for Amata Summit Ready Built

• Landbank of 13000 rai in the Eastern Seaboard

• Sensitive to external and internal factors

• Its subsidiary, Amata VN, operates in Vietnam

• Healthy FDI in Thailand.

• Rapid rise of land prices in the non-flood zone

• Quarterly results and land sales are volatile

• Management’s guidance is generally on the high side

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Company Profile AMATA is Thailand’s largest industrial estate (IE) operator by sales and landbank. It has 13,000 rai of land in the Eastern Seaboard area, a non-flood zone where land prices are rapidly rising. Around 70% of its revenue comes from land sales, and the remaining 30% comes from recurring income. It is currently looking to unlock the value of its assets by listing its subsidiary Amata Vietnam, monetizing its equity in Amata B. Grimm Power (which owns a power plant) via an infrastructure fund and injecting ready-built factories into REITs.




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35.0





2013-03-27 Buy 35.0 25.0



Results Review, 15 May 2013

Hemaraj Land & Dev (HEMRAJ TB) NeutralProperty - Real Estate Target Price: THB4.60Market Cap: US D1,331m Price : THB4.08

Gheco-One Woes Weigh On Outlook

Macro ��

Risks ��

Growth ��

Value ��

HEMRAJ’s presales of 421 rai and revenue of THB2bn f or 1Q13 were healthy and Management recently increased its 2013 target land sales from 1,600 rai to 1,800 rai. However, its 2Q13 res ults will be adversely impacted by problems at the Gheco-One power plant. We do not favor HEMRAJ, given its too-conservative land sales guidan ce, limited landbank, unimpressive backlog, and power plant woe s.

♦ Revenue of THB2bn (+22% y-o-y, 16% q-o-q). Hemaraj Land & Dev (HEMRAJ)’s industrial land sales came in at THB1.34bn, up 17% y-o-y. Revenue from utilities and rental grew 25% y-o-y to THB614m while other property sales surged 145% y-o-y to THB90m. Its backlog at end-1Q13 was at THB2.9bn, which will be realized as revenue when the land is transferred to its buyers. Meanwhile, it has also signed new contracts for 421 rai of land (-55% y-o-y) in pre-sales.

♦ EBIT of THB754m (+25% y-o-y, 13% q-o-q). Its gross margin was well-maintained at 46%, while its SG&A to sales ratio of 10.6% was on par with the 11% achieved in 1Q12, but less than 4Q12’s15%.

♦ Share of profits from 35%-owned Gheco-One was THB356 m (-17% y-o-y). HEMRAJ’s unrealized forex gain from the performance of the 770MW Gheco-One power plant in 1Q13 was at THB209.5m, which implies its core earnings contribution was at THB147m (-50% y-o-y).

♦ Net profit of THB902m (+4% y-o-y, 27% q-o-q). Its actual net profit was slightly better than Bloomberg’s consensus of THB829m, partially due to the low effective tax rate of 4% vs c.10% in 2012. Note that its share of profit including the unrealized forex gain/loss from Gheco-One was hard to predict.

♦ 2Q13 results to be affected by Gheco-One problems. So far, the Gheco-One power plant is still facing technical issues, shaving off around THB100m in revenue each month. The power plant will shut down for 45 days in 2Q13 for warranty maintenance. Also Gheco-One may book an additional expense of THB625m to be paid to the Revenue Department for the capitalization of its unrealized forex gains, which is not allowed in tax accounting.

Source: Bloomberg

Avg Turnover (THB/USD) 94.8m/3.22m


Upside (%) 12.7


Free float (%) 56

Shareholders (%)

Penpunnee Horrungruang 11.0

Thai NVDR 9.9

Shariah compliant

Wanida Geisler 66 2862 9748 [email protected]


78

88

98

108

118

128

2.4

2.9

3.4

3.9

4.4

4.9

Hemaraj Land & Dev (HEMRAJ TB)


20406080

100120140160180200

May

-12

Jul-1

2

Sep

-12

Nov

-12

Jan-

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Mar

-13

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m



Recurring net profit (THBm) 1,280 550 2,294 2,733 3,290



EPS (THB) 0.15 0.06 0.24 0.28 0.34

DPS (THB) 0.06 0.03 0.11 0.14 0.17

Dividend Yield (%) 1.6 0.7 2.7 3.4 4.1



P/E (x) 28.1 73.8 17.3 14.5 12.0

P/B (x) 4.50 4.50 3.80 3.32 2.89


Hemaraj Land & Dev (HEMRAJ TB) 15 May 2013


Figure 1: 1QFY13 results review

Year to 31 Dec 1QFY13 y-o-y q-o-q (THBm) % % Remarks Total revenue 2,045 22.1 16.1 Industrial land sales of THB1.34bn,

up 17% y-o-y Revenue, from utilities and rental, at

THB614m, +25% y-o-y Property sales rose 145% y-o-y to

THB90m Gross profit 936 21.3 15.6 EBIT 754 25.2 13.3 Pre-tax & EI profit 602 21.5 13.5 Share of profit from Gheco-One 356 (16.8) 37.7 Net profit 902 3.9 26.9 9% higher than consensus Gross margin% 45.8 Well-maintained at 45%-46% SG&A/sales % 10.6 On par with 11% in 1Q12, 15% in

4Q12 Net margin% 44.1

Source: Company Data, RHB Estimates



Financial Exhibits




Total turnover 4,322 4,150 6,399 7,773 8,586

Cost of sales (2,703) (2,361) (3,456) (4,528) (5,010)

Gross profit 1,619 1,790 2,943 3,245 3,576

Other operating costs (552) (639) (809) (1,028) (1,162)

Operating profit 1,067 1,151 2,135 2,217 2,413



Operating EBIT 1,067 1,151 2,135 2,217 2,413

Net income from investments 422 (133) 711 1,050 1,400



Other non-recurring income 135 (17) - - -

Pre-tax profit 1,529 758 2,570 3,020 3,605

Taxation (46) (161) (190) (197) (220)

Minority interests (71) (60) (85) (90) (94)

Profit after tax & minorities 1,411 537 2,294 2,733 3,290

Reported net profit 1,411 537 2,294 2,733 3,290

Recurring net profit 1,280 550 2,294 2,733 3,290




Change in working capital (706) 716 (963) 248 (717)

Other operating cash flow 2,243 231 702 2,286 3,004


Interest paid (284) (397) (475) (461) (438)

Tax paid (46) (161) (190) (197) (220)


Capex 56 (789) (4,718) (1,166) (1,245)

Other investing cash flow (1,844) (225) (1,529) (1,550) (1,900)


Dividends paid (534) (534) (785) (1,222) (1,506)

Increase in debt 2,475 19 3,533 (500) (500)

Other financing cash flow - (0) - - -

Cash flow from financing activities 1,941 (515) 2,748 (1,722) (2,006)

Cash at beginning of period 909 3,517 3,718 1,694 1,629

Total cash generated 2,607 202 (2,024) (65) (816)

Implied cash at end of period 3,517 3,718 1,694 1,629 814



Financial Exhibits




Total cash and equivalents 3,517 3,718 1,694 1,629 814








Total assets 18,569 20,010 26,308 26,532 27,699

Short-term debt 750 308 1,542 1,542 1,542

Accounts payable 213 450 1,397 1,467 1,540

Other current liabilities 941 1,630 2,556 2,162 1,903



Other liabilities 267 358 574 50 50



Share capital 3,882 3,882 3,882 3,882 3,882


Other reserves 439 439 439 439 439


Minority interests 366 326 622 684 752

Total equity 9,167 9,129 11,039 12,612 14,465



Revenue growth (%) 110.9 (4.0) 54.2 21.5 10.5



EPS growth (%) 141.2 (62.0) 327.5 19.2 20.4







DPS 0.06 0.03 0.11 0.14 0.17




SWOT Analysis

• Thailand’s second largest industrial estate (IE) operator by sales

• Well-diversified businesses in industrial estates, utilities and property development.

• All seven estates are in non-flood zones: Rayong, Prachinburi and Saraburi

• Vulnerable to external and internal factors

• Integrated resort project on Larn Island Pattaya consumes time and resources

• Healthy FDI in Thailand

• Rapid rise of land prices in non-flood zones

• Current landbank of 7,700 rai will last only three to

four years

• Contribution from 700MW Gheco-One remains unstable


Company Profile Hemaraj Land & Development (HEMRAJ) is Thailand’s second largest industrial estate (IE) operator by sales. All seven of its estates are in non-flood zones: Rayong, Prachinburi and Saraburi. However, its combined landbank of 7,700 rai will last only three to four years. The Group has well-diversified businesses in industrial estates, utilities and property development.

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2013-03-27 Neutral 4.60 4.30

2012-11-15 Buy 3.30 3.14


Company Update, 16 May 2013

Banpu (BANPU TB) SellEnergy - Coal Target Price: THB355Market Cap: US D2,963m Price : THB329

Higher production, lower costs should improve earnings over the next several quarters

Macro ��

Risks ��

Growth ��

Value ��

Banpu’s coal business should pick up in 2Q13, with higher production and more or less stable coal price. Cost cutting re mains very much a goal for this year in both Australia and Indonesia. We do not expect any strong rebound in the coal business in the near-ter m and without any major catalyst over the next several quarters, we m aintain our SELL on this stock with TP of THB355/share.

♦ We came out of the analyst meeting with a feeling t hat Banpu’s worst quarter is now behind them . Australia and Indonesia coal businesses should see better performance over the next couple of quarters.

♦ For the Australian coal business , Mandalong coal mine should see a boost in production from 0.8mt in 1Q13 to 1.7mt in 2Q13, while other mines will see around 100kt increase in production. 1Q13 unit costs were high at AUD58/t due to extended longwall changeover at Mandalong and difficult mining conditions at Springvale. These costs should decline over the next quarters. 2013F target for its Australian business is 14.5mt coal production, average selling price expected at AUD68/t and costs expected at AUD50/t.

♦ For the Indonesian coal business, 2013F target for the Indonesian business is targeted at USD80/t average selling price, with total production at 29mt with costs expected at USD63/t. 1Q13 production was 7.1mt with average selling price was USD80.62/t and average costs was USD65/t for the quarter. The Indominco and Trubaindo coal mines will increase production by around 100kt in 2Q13 while we expect average selling price to be similar to 1Q13. Costs reductions will come through lower stripping ratio and rationalization of other overhead costs.

♦ Coal prices: Banpu believes that coal price seems to have bottomed out for the year, trading in a narrow range of USD85-87/t now. With no significant increase in the global supply of coal expected in the 2H13 and demand remains strong, Banpu expects an improvement in overall coal price in the 2H13 (range USD85-USD95/t).

Banpu Plc (BANPU TB)

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54

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2468

1012141618

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Source: Bloomberg



Upside (%) 7.9

52-wk Price low/high (THB) 323 - 512

Free float (%) 80

Shareholders (%)

Thai NVDR CO.Ltd. 10.3

Mitr Phol Sugar Co. Ltd. 5.3

Than Bank of New York Mellon-CGT Taxable

3.4

Shariah compliant

Kannika Siamwalla, CFA 66 2862 9744 [email protected]



Reported net profit (THBm) 24,880 20,060 9,293 8,603 10,255

Recurring net profit (THBm) 9,573 13,233 6,829 7,612 9,298

Recurring net profit growth (%) (18.9) 38.2 (48.4) 11.5 22.1

Core EPS (THB) 35.2 48.7 25.1 28.0 34.2

DPS (THB) 21.0 21.0 18.0 9.5 11.3

Dividend Yield (%) 6.4 6.4 5.5 2.9 3.4

Core P/E (x) 9.3 6.8 13.1 11.7 9.6


P/B (x) 1.48 1.18 1.16 1.03 0.95

P/CF (x) 342 5 8 7 6

EV/EBITDA (x) 10.4 5.0 6.8 7.6 5.9


Our vs consensus EPS (%) (16.3) (14.2)


Banpu (BANPU TB) 16 May 2013

See imp ort ant disclosures at the end of this report 2

Financial Exhibits


Total turnover 65,285 112,404 117,337 106,642 128,472

Cost of sales (38,511) (62,960) (72,526) (65,272) (82,219)

Gross profit 26,774 49,444 44,811 41,371 46,253

Gen & admin expenses (17,360) (26,848) (28,992) (29,587) (29,587)



Depreciation of fixed assets (2,574) (6,230) (6,410) (6,410) (7,167)

Operating EBIT 9,415 22,596 15,819 11,784 16,666

Net income from investments 6,117 1,939 2,873 3,570 2,870

Interest income 338 463 685 499 455

Interest expense (2,914) (3,718) (3,800) (2,757) (2,461)

Exchange gains 187 3,510 1,325 - -

Exceptional income - net 5,743 866 3,519 1,287 1,287

Other non-recurring income 11,692 8,248 - - -

Pre-tax profit 30,577 33,904 20,420 14,383 18,818

Taxation (3,733) (8,506) (6,121) (3,312) (4,829)

Minority interests (1,964) (5,338) (5,007) (2,468) (3,734)

Profit after tax & minorities 24,880 20,060 9,293 8,603 10,255

Reported net profit 24,880 20,060 9,293 8,603 10,255

Recurring net profit 9,573 13,233 6,829 7,612 9,298




Depreciation & amortisation 2,574 6,230 6,410 6,410 7,167

Change in working capital (5,418) 2,142 (1,339) (391) (2,505)


Interest received 338 463 685 499 455

Interest paid (2,914) (3,718) (3,800) (2,757) (2,461)

Tax paid (3,733) (8,506) (6,121) (3,312) (4,829)

Cash flow from operations 262 19,208 11,654 12,232 14,494

Capex (24,330) (10,980) (10,152) (2,177) (7,288)

Other new investments (68,634) (19,841) (1,200) - (6,294)

Other investing cash flow 20,774 18,478 1,734 (583) 1,287


Dividends paid (4,348) (5,707) (5,707) (4,891) (2,581)

Increase in debt 71,034 3,618 (2,237) (4,119) (10,618)

Other financing cash flow 986 4,256 (1,462) 2,467 3,734

Cash flow from financing activities 67,672 2,167 (9,406) (6,543) (9,465)

Cash at beginning of period 21,050 16,980 29,523 22,770 25,699

Total cash generated (4,258) 9,033 (7,369) 2,929 (7,266)

Forex effects 187 3,510 1,325 - -

Implied cash at end of period 16,980 29,523 23,479 25,699 18,432




Financial Exhibits


Total cash and equivalents 16,980 29,523 23,479 26,408 19,142

Inventories 5,235 7,540 7,814 7,411 8,606

Accounts receivable 12,669 16,793 17,363 17,363 17,363





Total other assets 76,665 96,506 97,706 97,706 104,000


Total assets 193,122 225,010 222,047 223,004 224,658

Short-term debt 5,670 9,830 8,388 7,201 2,943

Accounts payable 3,068 3,736 2,989 2,989 2,989




Other liabilities 15,430 13,768 12,044 12,044 12,044



Share capital 2,717 2,717 2,717 2,717 2,717


Other reserves 5,058 5,058 5,058 5,058 5,058


Minority interests 8,508 12,764 11,302 13,770 17,504

Total equity 69,059 88,656 88,605 100,749 111,661




Revenue growth (%) 12.8 72.2 4.4 (9.1) 20.5

Operating profit growth (%) (31.2) 140.0 (30.0) (25.5) 41.4

Net profit growth (%) 74.9 (19.4) (53.7) (7.4) 19.2

EPS growth (%) 74.9 (19.4) (53.7) (7.4) 19.2







DPS 21.0 21.0 18.0 9.5 11.3





SWOT Analysis

• Geographic presence in the major coal mining countries (Indonesia and Australia).

• Power business provides stable income for the company.

• Changing landscape of the overall energy outlook (i.e. impact of shale gas on coal prices) can have negative impact on the coal outlook.

• The lawsuit against Banpu (by K.Siva Nganthavee) is an on-going concern.

• Actively seeking investment opportunities within the ASEAN region and Australia in both coal mines and power plants.

• Its coal business is in a cyclical downturn, thus heavily affecting its earnings.


0

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70%

100%

P/E (x) (lhs) EPS grow th (rhs)

P/BV (x) vs ROAE

0.0

0.20.4

0.60.8

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1.21.41.61.8

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Company Profile The company’s principle businesses are in coal-mining (with investments in Indonesia, China and Australia) as well as the power plant business with investments in both Thailand and China.




91191

291

391491

591691

791

891991


Price Close

NR

677

612

572

413

499

348

344

345





2012-12-19 Sell 345 424

2012-11-12 Sell 344 381

2012-10-09 Sell 344 398

2012-10-02 Sell 348 404

2012-09-24 Sell 348 392

2012-08-14 Neutral 499 470

2012-07-30 Neutral 413 406

2012-07-26 Neutral 413 406

2012-07-18 Buy 572 464

2012-06-06 Buy 612 444



Platform

1HFY13 Results Review, 16 May 2013

Airports of Thailand (AOT TB) Buy Industrial - Airport Develop/Maint Target Price: THB188 Market Cap: USD7,445m Price: THB155

On a Record-Breaking Streak

Macro

3.00

Risks

1.00

Growth

3.00

Value

2.00

AOT (Airports of Thailand) is still in record-breaking mode. Its 1HFY13 core earnings rose to THB5.59bn (YTD: 55%) as margin compression was not as severe as we had anticipated, thus giving scope for more earnings upside. As its earnings exceeded our projections, we raise our FY13/FY14/FY15 estimates by some 8.4%/10%/12.7% respectively. Maintain Buy, with our FV nudged higher to THB188.

Another strong quarter. AOT is still charting record earnings that

overwhelm consensus and our estimates. The airline operator’s 1HFY13 core earnings – excluding a THB2.35bn unrealized forex gain – came in at THB5.59bn (YTD: 55%), making up 56% of our full-year forecast. During the quarter under review, core earnings jumped 49% y-o-y and 58% q-o-q respectively, propelled by higher passenger numbers (+22% YTD, +17% y-o-y) and non-aeronautical revenue.

Margin holds firm. Despite incurring higher costs amid lower landing

and parking charges following the commissioning of Don Muaeng (DMK) as a commercial airport, AOT managed to eke out decent margins, in contrast to our earlier expectation of a margin decline. While EBITDA margins only inched marginally - by less than 1ppt to 58% - this was still above our full year forecast for 51.7%.

Balance sheet strengthens. AOT, which has significant exposure to

JPY and USD debt, has gained from the strengthening Baht as this has resulted in it paying a lower principal sum and interest. Of the currency gains recorded amounting to THB2.6bn, the unrealized ones amounting to THB2.46bn would be reflected as depreciation in debt book value in its balance sheet. Accordingly, its interest expenses has gone down by 9% y-o-y while its cash pile has grown by 16% to THB32bn. The quarter’s net gearing, meanwhile, improved to 6% from 32% in FY12.

Forecasts. AOT remains our defensive favorite in the transport sector.

With its earnings above our projections, we raise our FY13/FY14/FY15 estimates by 8.4%/10%/12.7% respectively. We also made adjustments for higher passenger growth for FY13-FY15, lower interest expenses and staff salary increment (please see Figure 3).

83

110

136

163

190

216

243

45

65

85

105

125

145

165

Airport of Thailand (AOT TB)


5101520253035404550

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Jan-1

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Source: Bloomberg


Cons. Upside (%) -20.6

Upside (%) 21.2

52-wk Price low/high (THB) 55.0 - 155

Free float (%) 23

Shareholders (%)

Finance Ministry 70.0

Thai NVDR 4.5

Social Security Force 1.3

Forecasts and Valuations Sep-11 Sep-12 Sep-13F Sep-14F Sep-15FTotal turnover (THBm) 28,641 30,472 37,583 42,484 50,809

Reported net profit (THBm) 2,215 6,500 10,786 12,825 16,863

Recurring net profit (THBm) 4,006 6,889 10,786 12,825 16,863

Recurring net profit growth (%) 108.8 71.9 56.6 18.9 31.5

Core EPS (THB) 2.8 4.8 7.5 9.0 11.8

DPS (THB) 0.80 1.80 3.02 3.59 4.72

Dividend Yield (%) 0.5 1.2 1.9 2.3 3.0

Core P/E (x) 55.3 32.1 20.5 17.3 13.1


P/B (x) 3.07 2.85 2.63 2.41 2.17

P/CF (x) 13.2 13.8 11.6 14.3 10.9

EV/EBITDA (x) 14.6 13.4 10.4 9.2 7.4


Our vs consensus EPS (%) 19.6 19.5 38.0


ratree.lu

Typewritten Text

Thailand Research Team. +66 (0 ) 2 862 9999 Ext.2030


Platform


Maintain BUY. We maintain our BUY call on AOT, with our FV raised to

THB188 on the back of higher multiples. This is backed by the company’s superior earnings growth and Thailand’s growing travel demand. Our THB188 FV is premised on 12.7x FY14 EV/EBITDAR, which represents a 20% premium to the peer average. This is also backed by our DCF fair value of THB183.

Figure 1: Fair Value of AOT

EV/EBITDA multiple applied (x) 13 EBITDA (THBm) 21,666 275,596 Less: Net Debt (THBm) 7,334

268,262

Number of Shares (m) 1,429

FV per Share (THB) 188

Source: RHB estimates


Platform


Figure 2: Quarterly operating metrics & results review Operating Statistics 2QFY12 1QFY13F 2QFY13 Q-o-Q Y-o-Y 1HFY12 1HFY13 Y-o-Y Comments International aircraft Movement ('000) 69.9 74.9 79.6 6% 14% 134.8 154.4 15%

Domestic Aircraft Movement ('000) 54.0 58.9 63.3 8% 17% 103.7 122.2 18%

Total Aircraft Movement ('000) 123.9 133.8 142.9 7% 15% 238.5 276.7 16%

International Passenger (m) 12.1 13.1 14.5 11% 19% 21.9 27.6 26% Better than expected

Domestic Passenger (m) 7.5 7.7 8.6 11% 14% 13.9 16.2 17% Better than expected

Total Passenger (m) 19.6 20.8 23.0 11% 17% 35.8 43.8 22% We have raised our FY13 growth to 20% from 18%

Total Embarking Passengers (m) 9.7 10.0 11.4 14% 18% 17.4 21.5 23%

Total Freight ('000) 382.2 354.5 338.5 -5% -11% 744.2 693.0 -7%

Per unit analysis

PSC per Pax (THB) 384.1 384.5 400.1 4% 4% 371.0 392.8 6%

International % of total pax 56% 56% 56% -1% -1% 57% 56% -1%

Landing & Parking per aircraft (THB) 10247.5 8151.4 8546.9 5% -17% 10389.9 8355.7 -20% DMK incentive scheme

Aircraft Service charges per aircraft 1029.3 986.6 994.9 1% -3% 1032.3 990.9 -4% DMK incentive scheme

service revenue per aircraft 7077.4 6813.1 6648.0 -2% -6% 7033.2 6727.8 -4% DMK incentive scheme

concession revenue per pax 90.0 104.1 107.1 3% 19% 92.7 105.7 14% Resilient spending at BKK

Net Income Statement 2QFY12 1QFY13 2QFY13 Q-o-Q Y-o-Y 2QFY12 2QFY13 Y-o-Y

Total Revenue 8153.3 8604.5 9802.1 14% 20% 14972.0 18406.5 23% Slightly above

Landing and parking charges 1269.6 1090.3 1221.5 12% -4% 2477.8 2311.8 -7% Down due to incentive scheme

Passenger service charges 3722.1 3863.3 4578.2 19% 23% 6469.8 8441.5 30% Higher passenger

Aircraft service charges 127.5 132.0 142.2 8% 11% 246.2 274.1 11%

Office and state property rents 391.3 443.8 441.0 -1% 13% 783.4 884.8 13% Higher due to DMK

Service revenues 876.8 911.3 950.1 4% 8% 1677.3 1861.4 11% Higher due to DMK

Concession revenues 1766.0 2163.9 2469.0 14% 40% 3317.5 4632.9 40% Resilient spending

Total Operating Expenses -3030.1 -3600.0 -5% 19% -6132.4 -7396.3 21% Higher Expenses due to DMK

Personnel expenses -1021.4 -1074.5 -1084.9 1% 6% -1910.3 -2159.4 13% Temporary staff and minimum wage

Operating expenses -1612.5 -1940.3 -1935.1 0% 20% -3135.8 -3875.4 24% Higher utilities due to DMK

Repairs and maintenance -380.4 -416.3 -381.3 -8% 0% -782.7 -797.7 2%

State property rental -348.2 -369.7 -418.1 13% 20% -636.3 -787.8 24%

Others 332.4 4.5 219.5 4735% -34% 332.7 224.0 -33%

EBITDA 5123.3 4808.2 6202.1 29% 21% 8839.6 11010.3 25% In line. Accounting for 57% of full year forecast

Depreciation and amortization -1119.7 -1187.7 -1171.4 -1% 5% -2290.8 -2359.1 3%

EBIT 4003.6 3620.5 5030.7 39% 26% 6548.8 8651.2 32% In line

Interest Income 314.6 320.4 312.2 -3% -1% 615.5 632.6 3% Higher cash pile

Dividend Income 11.3 0.0 12.2 NM 8% 11.3 12.2 8%

Interest Expense -516.6 -488.2 -465.1 -5% -10% -1051.6 -953.2 -9% Lower due to depreciating JPY

Profit before associate and exceptional 3812.9 3452.7 4890.1 42% 28% 6124.0 8342.8 36%

Associate 0.0 0.0 0.0 NM NM 0.0 0.0 NM

Exceptional items 693.7 1266.8 1083.1 -14% 56% 646.6 2349.9 263% Unrealized forex gains

PBT 4506.6 4719.5 5973.2 27% 33% 6770.6 10692.7 58%

TAX -1505.3 -1282.9 -1454.5 13% -3% -2504.5 -2737.4 9% Lower than expected. We trim slightly

MI -4.9 -4.0 -10.1 151% 108% -12.6 -14.1 12%

PATMI 2996.4 3432.5 4508.6 31% 50% 4253.5 7941.1 87%

Core PATAMI 2302.7 2165.7 3425.5 58% 49% 3606.9 5591.2 55% Slightly above. We raise earnings by 8.4% / 10% / 12.7%

for FY13/14/15 respectively

Margin

EBITDA 62.84 55.88 58.18 2.3 -4.7 59.04 58.18 -0.9

EBIT 49.10 42.08 42.60 0.5 -6.5 43.74 42.60 -1.1

PBT ex exceptional 46.76 40.13 41.19 1.1 -5.6 40.90 41.19 0.3

Core PATAMI 28.24 25.17 32.02 6.9 3.8 24.09 32.02 7.9

EPS (THB) 1.61 1.52 2.40 58% 49% 2.52 3.91 55%


Airports of Thailand (AOT TB) 16 May 2013


Figure 3: Changes in assumptions and earnings forecasts Previous Forecasts New Forecasts Percentage change (%)

Key Assumptions FY12 FY13f FY14f FY15f FY13f FY14f FY15f FY13f FY14f FY15fPax Traffic (m) 71.5 84.2 93.1 100.1 86 96 105 1.8% 2.6% 4.6%

Aircraft '000 480.3 549.8 611.8 662.5 559 627 691 1.6% 2.5% 4.3%

PSC - int (THB) 700.0 700.0 700.0 800.0 700 700 800 0.0% 0.0% 0.0%

PSC - dom (THB) 100.0 100.0 100.0 150.0 100 100 150 0.0% 0.0% 0.0%

Staff pay increment (% y-o-y) 10.3 15.0 10.0 10.0 10 10 10 -33.3% 0.0% 0.0%

Previous Forecasts New Forecasts Percentage change (%)Income Statement FY12f FY13f FY14f FY15f FY13f FY14f FY15f FY13f FY14f FY15f

Landing and parking charges 4756 5018 5844 6655 4689 5508 6381 -6.6% -5.8% -4.1%

Passenger service charges 13183 16322 18259 23123 16755 18891 24433 2.7% 3.5% 5.7%

Aircraft service charges 489 550 624 689 559 640 719 1.6% 2.5% 4.3%

Office and state property rents 1593 1858 1933 2010 1858 1933 2010 0.0% 0.0% 0.0%

Service revenues 3370 3960 4319 4584 4024 4429 4782 1.6% 2.5% 4.3%

Concession revenues 7081 9543 10827 11990 9697 11084 12483 1.6% 2.4% 4.1%

Total operating revenues 30472 37252 41807 49051 37583 42484 50809 0.9% 1.6% 3.6%

Personnel expenses -4544 -6248 -7596 -8990 -6084 -7457 -8991 -2.6% -1.8% 0.0%

Management’ s remuneration -70 -95 -115 -136 -92 -113 -136 -2.6% -1.8% 0.0%

Operating expenses -6795 -8154 -8561 -8989 -8154 -8561 -8989 0.0% 0.0% 0.0%

Repairs and maintenance -2304 -2637 -3243 -3779 -2679 -3353 -4049 1.6% 3.4% 7.1%

State property rental -1310 -1602 -1797 -2109 -1616 -1826 -2184 0.9% 1.6% 3.6%

Others 358 369 380 391 369 380 391 0.0% 0.0% 0.0%

EBITDA 15807 18981 20989 25576 19419 21666 26986 2.3% 3.2% 5.5%

Depreciation and amortization -4669 -4620 -4572 -4631 -4521 -4472 -4549 -2.1% -2.2% -1.8%

EBIT 11138 14361 16417 20945 14899 17194 22438 3.7% 4.7% 7.1%

Interest Income 1263 1508 1844 2148 1508 1911 2242 0.0% 3.6% 4.4%

Dividend Income 35 36 37 37 36 37 37 0.0% 0.0% 0.0%

Interest Expense -2060 -1706 -1690 -1765 -1677 -1583 -1627 -1.7% -6.3% -7.8%

Profit before associate and exceptionals 10377 14200 16608 21366 14766 17559 23090 4.0% 5.7% 8.1%

Associate 0 0 0 0 0 0 0

Exceptionals -389 0 0 0 0 0 0

PBT 9988 14200 16608 21366 14766 17559 23090 4.0% 5.7% 8.1%

TAX -3494 -4260 -4982 -6410 -3987 -4741 -6234 -6.4% -4.8% -2.7%

MI 6 6 7 7 6 7 7 0.0% 0.0% 0.0%

PATMI 6500 9946 11632 14963 10786 12825 16863 8.4% 10.2% 12.7%

Core PATAMI 6889 9946 11632 14963 10786 12825 16863 8.4% 10.2% 12.7%




Figure 4: DCF of AOT FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 Revenue 21,502 24,033 28,641 30,472 37,583 42,484 50,809 55,883 61,058 64,492 73,317 75,692 78,165 80,564 82,946 91,858 94,416

EBITDA 10,823 12,146 14,570 15,807 19,419 21,666 26,986 28,989 29,214 30,153 36,046 36,248 36,412 36,365 36,152 42,030 42,133

Earnings growth 12% 20% 8% 23% 12% 25% 7% 1% 3% 20% 1% 0% 0% -1% 16% 0%

EBITDA Margin 50% 51% 51% 52% 52% 51% 53% 52% 48% 47% 49% 48% 47% 45% 44% 46% 45%

Core PATAMI 955 1,919 4,006 6,889 10,786 12,825 16,863 18,100 17,015 17,348 21,623 21,777 21,901 21,864 21,620 25,652 25,412

Earnings growth 101% 109% 72% 57% 19% 31% 7% -6% 2% 25% 1% 1% 0% -1% 19% -1%

PATAMI Margin 4% 8% 14% 23% 29% 30% 33% 32% 28% 27% 29% 29% 28% 27% 26% 28% 27%

CFO 10,976 16,199 16,742 16,080 19,107 15,531 20,370 23,039 24,393 17,557 25,971 29,636 29,971 30,279 30,534 31,493 35,099

Int (1-t) 1,746 1,673 1,668 1,586 1,342 1,266 1,301 1,337 1,301 1,242 1,183 1,124 1,065 1,006 947 888 829

FC Inv 7,345 2,066 5,745 6,689 3,093 4,096 11,099 20,102 20,105 4,108 4,311 4,524 4,748 4,983 10,125 10,129 15,133

FCFF (CFO+Int-FC Inv) 5,377 15,806 12,665 10,978 17,356 12,701 10,573 4,274 5,590 14,692 22,843 26,236 26,288 26,302 21,356 22,252 20,796 PV of FCFF 16,035 10,842 8,338 3,115 3,763 9,138 13,128 13,930 12,896 11,921 8,943 8,609 7,434

FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 FY39 FY40 FY41 FY42 Revenue 97,053 99,774 102,581 113,919 117,084 119,003 120,964 122,969 135,413 137,611 139,824 142,086 144,398 159,427 161,969 164,566 167,220

EBITDA 42,165 42,118 41,985 49,835 49,669 48,889 48,014 47,037 55,900 54,797 53,541 52,151 50,620 61,060 59,338 57,444 55,368

Earnings growth 0% 0% 19% 0% -2% -2% -2% 19% -2% -2% -3% -3% 21% -3% -3% -4%

EBITDA Margin 43% 42% 41% 44% 42% 41% 40% 38% 41% 40% 38% 37% 35% 38% 37% 35% 33%

Core PATAMI 25,048 24,720 24,167 29,368 28,821 28,306 27,720 26,984 33,504 32,784 31,917 31,007 29,979 37,682 36,558 35,298 33,895

Earnings growth -1% -1% -2% 22% -2% -2% -2% -3% 24% -2% -3% -3% -3% 26% -3% -3% -4%

PATAMI Margin 25.8% 24.8% 23.6% 25.8% 24.6% 23.8% 22.9% 21.9% 24.7% 23.8% 22.8% 21.8% 20.8% 23.6% 22.6% 21.4% 20.3%

CFO 35,175 35,301 35,409 36,626 40,943 40,820 40,650 40,513 41,346 46,751 46,467 45,883 45,485 46,757 53,182 52,626 51,956

Int (1-t) 770 707 648 589 530 471 412 224 165 106 0 0 0 0 0 0 0

FC Inv 10,137 15,141 15,145 20,149 6,133 6,317 6,507 6,702 6,903 7,110 7,324 7,543 7,770 8,003 8,243 8,490 8,745

FCFF (CFO+Int-FC Inv) 25,808 20,867 20,912 17,066 35,339 34,973 34,554 34,035 34,608 39,747 39,143 38,340 37,715 38,754 44,939 44,136 43,211 PV of FCFF 8,523 6,367 5,895 4,445 8,504 7,776 7,098 6,460 6,069 6,439 5,859 5,302 4,819 4,575 4,901 4,109 49,305

Based on FY13 onwards (30 years)

DCF of FCFF (m) 274,540

Debt (m) 53,645

Cash and short term investments (m) 40,677

Net Debt (m) 12,968

FV (m) 261,571

Shares outstanding (m) 1,429

FV of AOT (THB) 183.1

Current Price (THB) 155.0

Upside (%) 19.7%

Terminal growth applied 1.0%

WACC 8.2%

Figure 5: A peer comparison Fair Value Market Cap Revenue FCF Yield (%) DPS Yield (%) ROE (%) Net Gearing (%) 3-5 years

USDm FY0 (USDm) FY1 FY2 FY1 FY2 FY1 FY1 FY1 FY0 Earnings Growth (%)AIRPORTS OF THAILAND PCL BUY THB187 7440.5 1023.9 10.8 9.5 20.5 17.3 5.8 1.9 13.3 31.8 19.8

SHANGHAI INTERNATIONAL AIR-A NR 4157.3 751.0 8.2 7.0 13.2 11.5 8.9 2.6 11.6 -14.4 22.5

BEIJING CAPITAL INTL AIRPO-H NR 2979.6 884.2 7.6 6.9 12.4 10.4 4.2 2.2 9.2 90.1 12.6

FRAPORT AG FRANKFURT AIRPORT NR 1418.8 3138.4 9.1 8.7 18.5 16.0 0.9 2.8 7.8 146.5 10.5

AUCKLAND INTL AIRPORT LTD NR 2239.4 332.8 15.6 14.5 27.3 24.5 2.7 3.7 6.1 -3.6 7.7

MALAYSIA AIRPORTS HLDGS BHD BUY MYR7.23 7602.4 720.5 12.2 9.5 28.3 19.5 -4.7 2.1 6.1 57.0 1.0

ADP NR 8761.6 3393.5 9.6 9.0 18.6 16.7 4.3 3.0 9.7 -11.8 7.7

TAV HAVALIMANLARI HOLDING AS NR 2312.6 1408.2 7.6 6.6 11.4 9.7 0.6 3.4 25.5 128.2 32.0

FLUGHAFEN WIEN AG NR 1263.3 780.6 7.3 7.0 14.2 12.7 7.2 2.6 7.8 43.1 1.4

GRUPO AEROPORTUARIO DEL CENT NR 1612.4 253.6 12.9 11.5 21.0 18.9 1.3 3.1 14.4 57.4 3.0

SYDNEY AIRPORT NR 6723.3 1020.5 14.4 13.7 41.6 36.6 7.4 6.1 8.0 239.3 -0.3

Average (excl AOT) 10.5 9.4 20.7 17.6 3.3 3.1 10.6 73.2 9.8

Average (incl AOT) 10.5 9.5 20.6 17.6 3.5 3.0 10.9 69.4 10.7

EV/EBITDA PE




Financial Exhibits

Profit & Loss (THBm) Sep-11 Sep-12 Sep-13F Sep-14F Sep-15FTotal turnover 28,641 30,472 37,583 42,484 50,809

Cost of sales (9,651) (10,409) (12,449) (13,741) (15,223)

Gross profit 18,990 20,063 25,134 28,743 35,586 Gen & admin expenses (12,016) (9,283) (10,604) (11,929) (13,539)

Other operating costs (270) 358 369 380 391

Operating profit 6,704 11,138 14,899 17,194 22,438 Operating EBITDA 14,570 15,807 19,419 21,666 26,986

Depreciation of fixed assets (7,866) (4,537) (4,377) (4,316) (4,379)

Amortisation of intangible assets - (131) (143) (156) (170)

Operating EBIT 6,704 11,138 14,899 17,194 22,438 Net income from investments 37 35 36 37 37

Interest income 795 1,263 1,508 1,911 2,242

Interest expense (2,224) (2,060) (1,677) (1,583) (1,627)

Exceptional income - net (1,792) (389) - - -

Pre-tax profit 3,521 9,988 14,766 17,559 23,090 Taxation (1,262) (3,494) (3,987) (4,741) (6,234)

Minority interests (44) 6 6 7 7

Profit after tax & minorities 2,215 6,500 10,786 12,825 16,863 Reported net profit 2,215 6,500 10,786 12,825 16,863 Recurring net profit 4,006 6,889 10,786 12,825 16,863


Cash flow (THBm) Sep-11 Sep-12 Sep-13F Sep-14F Sep-15FOperating profit 6,704 11,138 14,899 17,194 22,438 Depreciation & amortisation 7,866 4,669 4,521 4,472 4,549 Change in working capital 2,448 795 1,482 1,060 1,073 Other operating cash flow 2,697 2,377 782 (4,645) (4,529)

Operating cash flow 19,715 18,979 21,684 18,082 23,530 Interest received 614 1,164 1,390 1,760 2,065

Interest paid (2,224) (2,060) (1,677) (1,583) (1,627)

Dividends received 37 35 36 37 37

Tax paid (1,400) (2,038) (2,325) (2,765) (3,636)

Cash flow from operations 16,742 16,080 19,107 15,531 20,370 Capex (3,458) (4,882) (3,000) (4,000) (11,000)

Other new investments (3,965) (4,095) (666) (681) (695)

Other investing cash flow 3 (670) 40 41 42

Cash flow from investing activities (7,419) (9,648) (3,626) (4,640) (11,654) Dividends paid (786) (1,143) (2,571) (4,314) (5,130)

Increase in debt (4,675) (4,718) (3,203) 1,505 1,506

Other financing cash flow (2,202) (2,098) (1,710) (1,615) (1,661)

Cash flow from financing activities (7,662) (7,959) (7,484) (4,424) (5,285) Cash at beginning of period 3,519 5,179 3,653 11,650 18,117

Total cash generated 1,661 (1,527) 7,997 6,467 3,432 Implied cash at end of period 5,179 3,653 11,650 18,117 21,549


Riding on the expansion of low cost carriers in Thailand, AOT is expected to see earnings surge in FY13

Cash flow generation expected to be stronger on high asset utilization



Financial Exhibits

Balance Sheet (THBm) Sep-11 Sep-12 Sep-13F Sep-14F Sep-15FTotal cash and equivalents 26,892 32,111 40,677 47,725 51,749

Inventories 313 252 285 323 361

Accounts receivable 3,926 3,809 4,280 4,848 5,420

Other current assets 823 1,012 1,062 1,116 1,171

Total current assets 31,954 37,183 46,304 54,011 58,701 Total investments 14,738 12,217 12,357 12,500 12,647



Total other assets 13,201 11,333 7,678 7,905 8,140


Total assets 150,599 150,012 154,302 162,342 174,473 Short-term debt 5,518 5,445 5,445 5,445 5,445

Accounts payable 1,042 1,259 2,056 2,329 2,603


Total current liabilities 16,567 17,418 18,490 18,348 18,907 Total long-term debt 58,039 51,407 48,200 49,700 51,200

Other liabilities 3,716 3,392 3,373 2,372 2,345

Total non-current liabilities 61,755 54,798 51,573 52,072 53,545 Total liabilities 78,322 72,217 70,063 70,420 72,452 Share capital 14,286 14,286 14,286 14,286 14,286


Other reserves 14,161 14,316 14,316 14,316 14,316

Shareholders' equity 72,132 77,643 84,115 91,809 101,927 Minority interests 145 152 125 113 94

Other equity 0 (0) 0 - 0

Total equity 72,277 77,795 84,240 91,922 102,021 Total liabilities & equity 150,599 150,012 154,302 162,342 174,473


Key Ratios (THB) Sep-11 Sep-12 Sep-13F Sep-14F Sep-15FRevenue growth (%) 19.2 6.4 23.3 13.0 19.6



EPS growth (%) 8.6 193.5 65.9 18.9 31.5







DPS 0.80 1.80 3.02 3.59 4.72



High cash flow to be partially utilized for debt repayment and expansion plans

Improvements in operating efficiency and high airport utilization will boost margins moving forward



SWOT Analysis

Thailand being a popular tourism hub should sustain passenger growth

Growing travel demand on the back of favorable demographics

Strong cash flow earnings

Thailand’s high speed railway could be a threat to some of its airports. However, in the long run, the high speed rail is a positive

Political instability could pose a risk to Thai tourism

Overseas ventures into Indo China

Expansion in retail space outlets at Don Mueang Airport

Slow execution of expansion plans

Limited scope for airport expansion in Thailand

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P/BV (x) vs ROAE



Company Profile Airports of Thailand is the airport concessionaire operator of six major airports in Thailand.

Macro outlook continues to be promising, backed by favorable demographics. With growing travel demand, AOT’s ability to generate strong cash flow will propel its expansion beyond its existing airport portfolio in the long run, with possible airport acquisitions abroad.




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42

62

82

102

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Price Close

NR 97

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133

137

153 Recommendations & Target Price




2013-04-23 Buy 153 133

2013-02-15 Buy 137 117

2013-02-14 Buy 133 117

2013-02-14 Buy 133 117

2013-01-14 Buy 120 97

2012-11-30 Buy 104 94

2012-10-25 Buy 97 85


10

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11

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Documents

TH Morning Matters 20130516€¦ · However, its 2013 revenue growth target of 30% should be achievable, with targeted sales at THB6bn. Its FV in end-2012 stood at THB21. We expect