Sansiri PCL: 1Q21 miss (both us and the street); new exciting story going forward

We expect SIRI’s stock price to rally on excitement over its new investment. Once XPG’s capital increases are complete, the cost for SIRI’s 15% stake will be Bt1.7/share, below the implied fully-diluted market value of XPG of Bt2.07/share (extrapolated from XPG’s May 14 pre-recap price of Bt5.20). We will revisit our model and call. Till then, our YE21 target price is Bt0.85.

Result below estimation

SIRI reported NPAT of Bt384m for 1Q21. Excluding a Bt7m reversal of a project impairment, core earnings would be Bt377m, a YoY turn-around from the 1Q20 core loss of Bt51m but down 33% QoQ. The core result was 17% below our estimate (18% higher interest expenses and 75% lower equity income than assumed) and 21% short of the street.