Equity Analysis /

Siam Global House PCL: Less attractive risk/reward proposition

  • Catering to home construction demand across ASEAN

  • SSS likely to decline in 2Q22

  • Moderate earnings growth profile for 2022-24

Bualuang Securities
20 June 2022

We have transferred our GLOBAL coverage. Our HOLD call stands to a YE22 target price of Bt20. Although we expect GLOBAL to build market share in the provinces and expand across ASEAN, 2022-23 earnings growth will slower than the spectacular rate marked for 2021, given the firm’s soft outlook for same-store sales and margin. Within Construction Retail space, we currently prefer DOHOME.

Catering to home construction demand across ASEAN

GLOBAL is one of only a few Thai retailers with exposure to other markets in ASEAN. Its subsidiary, Global House International (GHI), partners with local retailers in ex-Thailand markets. At end-Mar 2022, GLOBAL had 76 stores in Thailand; it books equity income from GHI’s stakes in seven outlets in Laos, one in Cambodia, nine in Myanmar, and 11 in Indonesia (a store will open in the Philippines this year). While GLOBAL plans to open 5-7 branches in Thailand annually, 2022-25, it also intends to add four more stores in Laos and six in Myanmar. More than 90% of core profit is currently generated in Thailand, but we believe GLOBAL can also expand in tandem with broader ASEAN urbanization trends.