EPG’s current FY20 PER of only 15.1x (1.3SD below its long-term mean of 24.9x) prices in the weak 1Q20/21 performance, we believe. Expectations of a QoQ core profit improvement in 2Q20/21 should boost the share price going forward. There would be scope for upside to its earnings profile if demand were to recover more strongly than anticipated. Our BUY call stands.
Core profit in line; net profit below estimate
EPG reported a 1Q20/21 (Apr-Jun) net profit of Bt76m, down by 65% YoY and 69% QoQ. Stripping out a Bt26m FX loss, core earnings would be Bt102m, down by 59% YoY and 48% QoQ. While the core profit was in line with our estimate (12% below the consensus), the bottom-line missed our expectation by 22% (and was 34% below the street), due to heavier extra losses than assumed.