Our HOLD rating stands for a 7% dividend yield in 2023. We expect global SB price to drop to $13-15/bushel in 2H22 (from $15-18/bushel in 1H22), which will lead to normalized GM of 10-11% in 2023.
Net profit exceeded our estimate due to one-off gains
TVO posted a 2Q22 net profit of Bt954m, up 31% YoY and 44% QoQ. Excluding five extra items in 2Q22—Bt7m FX loss, Bt263m gain from derivatives, Bt4m in reversal of inventory impairment, Bt7m in reversal of financial asset impairment and Bt73m in PP&E impairment—core profit was Bt760m, up 4% YoY and 35% QoQ. Net profit beat our model by 31% thanks to the above extra gain items while core profit exceeded our model by 6% due to higher GM than modeled. Sales were 3% short of our model. GM of 12.4% in 2Q22 beat our 11.5% estimate (against 14.2% in 2Q21 and 9.8% in 1Q22).