Eastern Polymer Group PCL: 4Q20/21 profit to grow strongly; good momentum prompts earnings upgrade

  • Substantial YoY core earnings growth expected for 4Q20/21 ...
  • ...led by Aeroflex and Aeroklas
  • Further core profit expansion expected for 1Q21/22 (Apr-Jun)

We expect core profit growth to sustain momentum through 1Q21/22 and FY21, with better performance across all key businesses. Over the longer view, there would be scope for upside to EPG’s earnings profile if demand were to recover more strongly than modeled. The stock trades at an FY21 PER of 24.3x (a slight discount to its long-term mean of 24.7x).

Substantial YoY core earnings growth expected for 4Q20/21 ...

EPG looks set to post hefty YoY core profit growth for 4Q20/21 (Jan-Mar), with operational improvements across all key businesses. We estimate 4Q20/21 core earnings at Bt414m (up 114% YoY, flat QoQ) and NPAT of Bt414m (up 69% YoY but down 4% QoQ). The YoY core profit expansion drivers were: 1) higher sales at Aeroflex, Aeroklas, and EPP, 2) a fatter GM, and 3) better numbers among associates and JVs.

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