Siam Global House PCL: Can’t beat a strong performance

  • Impressive SSS forecast
  • Second-best quarter result forecast in 2Q21
  • Scope for earnings upside

We expect a sharp share price rally by 10-15% ahead of its second-best quarterly earnings forecast in 2Q21 (superior growth YoY). A positive surprise in performance will push GLOBAL to bullish valuations at a 2021 PER of 38x (1SD above its long-term mean) or share price beyond Bt23.60 back up by profit upside. We have upgraded to BUY (from HOLD), aYE21 DCF target price of Bt24.  

Impressive SSS forecast  

Same-Store-Sales (SSS) can expect historically strongest quarter in 2Q21 with at least 30% growth YoY boosted by the combination of low base set in 2Q20 (negative SSS of 20% YoY due to full lockdown in Thailand) and strong demand in upcountry Thailand (about 90% of GLOBAL’s sales). Looking ahead, GLOBAL should sustain SSSG YoY in 3Q21 and 4Q21 given negative SSS of 5.6% YoY in 3Q20 and 3.1% in 4Q20. At our most conservative estimate, we see low single-digit SSSG YoY in 2H21. GLOBAL is likely to reach SSSG of 11.5% in 2021, beating our model of 10.0% and turnaround from 9.0% decline in 2020.   

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