Earnings Report /
Thailand

Khon Kaen Sugar Industry PCL: Beat our model soundly; a YoY core turnaround expected for 4Q22

  • Exceeded our estimates by a mile

  • KSL posted a net profit for 3Q22 of Bt519m

  • Sales beat our model by 5%

Bualuang Securities
12 September 2022

Our TRADING BUY stands, led by a robust 2022 core profit jump (fatter sugar GM). Its current valuation is cheap with the 2022 PER of 10.8x.

Exceeded our estimates by a mile

KSL posted a net profit for 3Q22 (May 1-Jul 31, 2022) of Bt519m, up 827% YoY and 25% QoQ. Stripping out four extra items in 3Q22—1) Bt42m FX gain, 2) Bt38m gain from derivative hedging and 3) Bt30m loss from interest rate hedging and 4) Bt10m in provision for doubtful debts—core profit was Bt479m, up a robust 261% YoY and 33% QoQ. Net and core profits beat our estimates by 73% and 77%, respectively, thanks to higher sales and GM and lower SG&A expenses than modeled. Sales beat our model by 5%, while GM of 18.4% exceeded our estimate of 13% significantly (against 10.7% in 3Q21 and 16% in 2Q22). Equity income was lower than forecast led by BBGI’s net loss.