HMPRO has seen earnings recovery on YoY growth in 1Q21 after falling YoY for four straight quarters (1Q20-4Q20). Share price should rebound given YTD share price flattish against strong core profit recovery in 2021. Valuations are not expensive, as share price trades at a 2021 PER of 30.8x, near its mean in 2012-2020. We prefer HMPRO on leadership in ESG (endorsed by Dow Jones Sustainability indices in 2017-2020, FTSE4Good in 2016-2020, ‘AA’ MSCI ESG rating, and Bloomberg Gender Equality Index). We maintain BUY rating at a YE21 DCF-derived target price of Bt17 (6.3% WACC, 2.0% terminal growth).
Slightly beat our forecast, in line with the consensus
HMPRO reported a core profit of Bt1.36bn for 1Q21, up 8% YoY but down 12% QoQ. The result was in line with the street number but 6% above our forecast due to better-than-expected sales GM.