• Quarterly result recovery forecast in 2Q21 and strong 2H21outlook
  • Value accretion in three recent deals becomes meaningful in 2022
  • Building global plant-based food platform

Share price deserves rally ahead of quick strong earnings recovery seen in 2Q21 and growth of plant-based food business. We rolled investment horizon to a YE22 DCF-derived target price of Bt11.20 (7.6% WACC and 2.5% terminal growth). With high growth profile, PER is easing from 55.4x in 2021 to 48.3x in 2022. BUY!

Quarterly result recovery forecast in 2Q21 and strong 2H21outlook

A nadir quarterly result was seen in 1Q21. We preliminary forecast core profit growth of about 40-45% YoY and QoQ in 2Q21. Given stable SG&A expenses, record sales forecast in 2Q21 (a jump of about 60% YoY and 10% QoQ) will drive economies of scale benefits. All-time high sales in 2Q21 are driven by delayed shipments of ethnic sales (up QoQ by 10%), e-commerce sales given full quarter contribution of Prime Labs, functional product sales, and plant-based food. GM would sustain high QoQ at 32.5%, up 170bps YoY. In 2H21, performances are heading to high seasonality, as sales would increase by 30% YoY and 10% HoH. We expect record sales to continue in 3Q21 and 4Q21. Plant-based food business in UK is reaffirmed to turnaround in 2H21.  Revenue from terpene flavored product and hemp is expected in 4Q21.  

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