We recommend that investors overlook weaker 2020 core earnings to foresee the 2021 core earnings bounce led by its commercial run of its two damaged lines in late-1Q21 at the earliest. Our target price is now pegged to the 2021 earnings forecast and the YE21 investment horizon.
Below our expectations
GFPT posted a net profit for 2Q20 of Bt223m, down 35% YoY and 31% QoQ. Excluding two extra items in 2Q20—Bt44m in loss from derivatives (due to the adoption of TFRS9) and Bt29m in FX gain—core profit for the quarter was Bt238m, down 27% YoY and 14% QoQ. Net profit missed our model by 16%, thanks mainly to booking of the above-mentioned loss from derivatives and lower sales than modeled, while core profit was 9% below our model, led by lower sales than estimated. Sales were 8% below our model. However, GM was consistent with our model of 14.3% (against 13.9% in 2Q19 and 14.7% in 1Q20). McKey’s profit was 7% short of our model, while GFN’s beat ours by 218%.