Equity Analysis /
Thailand

TQM Corp PCL: Acquisitions to drive strong growth, despite no “Jer Jai Job”

  • 2Q22 profit expected to mark growth of 7% YoY and 11% QoQ

  • 3Q22 earnings should expand by 18% YoY and 20% QoQ

  • The 2022 growth outlook is strong

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Follow
Bualuang Securities
3 August 2022

We expect TQM to mark 2Q22 profit growth of 7% YoY and 11% QoQ, driven by insurance premium sales growth, including the consolidations of True Extra, True Life, and (for two months) TQR. Looking to 2H22, the firm should deliver strong earnings expansion (both organic and inorganic drivers). Hence our 2022 bottom-line projection is Bt1.1bn, up 20% YoY. BUY!

2Q22 profit expected to mark growth of 7% YoY and 11% QoQ

Our 2Q22 earnings estimate is Bt238m, up by 7.3% YoY and 11.3% QoQ. The YoY growth drivers were insurance premium sales expansion (both motor and non-motor products), a fatter GM of 54.9%, up from 53.1% in 2Q21, the consolidations of True Extra Broker Co Ltd and True Life Broker Co Ltd, and the two-month consolidation of TQR Plc. Note that we don’t expect any sales of COVID-related healthcare insurance products (Jer Jai Job). True Extra, True Life, and TQR would have enhanced both revenue and net margin, we believe (net margins in the range of 30-40%, considerably fatter than TQM’s NM of 26%).