SCGP’s share price underperformance in 2022YTD has been priced into the 1H22 uninspiring outlook, we think. This offers a good opportunity to accumulate the stock, premised on the firm’s favorable 2H22 prospects, buoyed by growing demand and margin expansion. Moreover, there is a scope for upside to our forecasts and valuation from new investments/acquisitions. Our BUY rating stands.
Core profit in line; bottom-line above estimate
SCGP reported a 2Q22 net profit of Bt1,856m, down 18% YoY but up 12% QoQ. Stripping out a Bt329m FX gain, core earnings would be Bt1,527m, down by 27% YoY and 8% QoQ. While the core profit was in line with our forecast, the net profit was 15% above our estimate, due to extra gain on FX (in line with the consensus). SCGP announced 1H22 DPS of Bt0.25, implying a simple yield of 0.5% (XD: 8 Aug, payment: 24 Aug).