Earnings Report /
Thailand

GFPT PCL: Missed our estimates; recovery seen in 2H20 and 2021

  • Below our expectations

  • GFPT posted a net profit for 2Q20 of Bt223m

  • Net profit missed our model by 16%

Bualuang Securities
13 August 2020

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%.