Equity Analysis /
Thailand

Humanica PCL: HUMAN injected with growth hormone

  • New base set for quarterly earnings

  • Skyrocketing expected in 2H22…

  • …and seeds to sprout in 2023

Napon Jaisan
Napon Jaisan

Equity Research Analyst

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Bualuang Securities
9 September 2022

Yesterday many Thai software stocks rose 5-10% as interest rates and oil prices eased, cooling investors’ concerns about continued high-rise inflation. However, HUMAN’s stock price was a laggard. We believe that HUMAN’s earnings will jump into a new growth phase in 2H22, led by the consolidation of DataOn. Its valuation should be re-rated during a cyclical uptrend. BUY!

New base set for quarterly earnings

HUMAN’s consolidation of DataOn was completed in Jun (a month-long process). DataOn’s revenue and profit were US$5.6m (mostly recurring income) and US$1.8m, respectively in 1H22 (DataOn’s NM of 20% vs. HUMAN’s of 18%). HUMAN alone reported a 2Q22 revenue of Bt195m (down 2% YoY but up 8% QoQ) and core profit of Bt45m (down 18% YoY but up 18% QoQ). We project DataOn’s revenue at US$12.4m (up 24% YoY) and profit at U$3.8m in 2022 (up 52% YoY)—with a high chance its 1H22 profit accounts for 47% of our full year projection. Therefore, DataOn will generate profit of US$2m for HUMAN (or Bt70-75m in 2H22). HUMAN’s quarterly earnings will set a new base of Bt60-80m/quarter in 2H22-2023 vs. pre-COVID level of Bt30-50m/quarter.