Earnings Report /
Thailand

SCG Packaging PCL: 2Q22 core earnings as expected; stronger quarter down the road

  • Core profit in line; bottom-line above estimate

  • SCGP reported a 2Q22 net profit of Bt1,856m

  • SCGP announced 1H22 DPS of Bt0.25

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Follow
Bualuang Securities
27 July 2022

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).