SVI’s very strong 3Q21 result will—almost invariably—trigger a hefty stock price rally. We anticipate that the consensus 2021 profit forecast will rise substantially (depending on management guidance, the street projection for 2022 may also be subject to a major upgrade). Our call shifts up from HOLD to BUY.
3Q21 core earnings were 235% above our expectation
SVI posted a 3Q21 net profit of Bt520m, up by 108% YoY and 214% QoQ. Stripping out an Bt18m FX gain, core earnings would be Bt501m, up by 177% YoY and 235% QoQ. The core number was far above both our estimate of Bt154m and the consensus projection of Bt184m.
The firm announced that the board had approved the resale of treasury stock (accumulated as a result of an earlier stock buyback). Up to 17.4m shares (equal 0.8% of total outstanding shares) will be resold, Nov 25, 2021-Oct 16, 2022.