Earnings Report /
Thailand

Supalai PCL: 2Q20 profit dropped to a 7-year low

  • Core earnings missed our estimate and the consensus

  • SPALI posted a 2Q20 core profit of Bt420m

  • SPALI announced a DPS for 1H20 of Bt0.50

Bualuang Securities
13 August 2020

We suggest taking profits on SPALI, given its 7% month-to-date share price rise. The stock trades at a 2021 PER of 8.6x—almost 1SD above its 2006-19 mean. The premium isn’t deserved at this juncture. We suggest waiting for a better entry point. Our HOLD rating stands with an unchanged YE20 target price of Bt18 (pegged to a PER of 9x).

Core earnings missed our estimate and the consensus

SPALI posted a 2Q20 core profit of Bt420m, down by 48% YoY and 44% QoQ. The result was missed our estimate and the consensus by 11%, due to a higher effective tax rate than assumed (28% actual; we had assumed only 20%), as there was no tax credit for business in Australia. SPALI announced a DPS for 1H20 of Bt0.50, a 92% payout rate (our assumption was only Bt0.30), a 2.9% simple yield (XD Aug 25, payment Sep 9).