SVI comes with risks associated with the global economic slowdown, supply chain issues, and geopolitical tensions. The potential cycle peak and limited upward earnings revision breadth may create downside risks into 2023. However, its better 3Q22 earnings than the street’s estimate is likely to support its stock price in the interim. We expect to see a flow of consensus earnings upgrades of about 20-25%. Our call shifts from SELL to TRADING BUY.
3Q22 core earnings were 51% above our forecast
SVI posted a 3Q22 net profit of Bt598m, up by 15% YoY and 42% QoQ. Stripping out a Bt105m FX gain, core earnings would be Bt494m, flattish YoY, but up 70% QoQ. The core number was 51% above our estimate and 41% better than the consensus projection, led by fatter GM than we had assumed.