Indorama Ventures PCL: Modest NPAT beat; strong core profit growth expected for 2Q21
- Bottom-line was a bit above estimate
- IVL reported a 1Q21 net profit of Bt6,009m
- The second-quarter is normally the seasonal peak for PET demand
Hefty core profit expansion through 2Q21 and for 2021 as a whole will prompt the market to bid up the stock going forward, we believe. Furthermore, it is now high season for PET demand, so the chances are good that IVL will re-rate toward its typical high season multiple. Historical data show that the stock generally re-rates to about its long-term mean PBV (1.9x) during the second-quarter seasonal peak, which implies a price of Bt48. If the market were to re-rate IVL to its 3Q18 level (when the PET [West] spread was close to the current spread)—a PBV of 2.3x—its stock price would be Bt59.
Bottom-line was a bit above estimate
IVL reported a 1Q21 net profit of Bt6,009m, up by 953% YoY and 358% QoQ. Stripping out a Bt4,273m gain on inventories, a Bt218m insurance payout, a Bt4m gain on the disposal of assets, and a Bt4m FX loss, core earnings would be Bt2,576m, up by 42% YoY and 198% QoQ. While the core profit was in line with our estimate, the bottom-line was 6% above our expectation, due to bigger extra gains than assumed (it was in line with the consensus).
- 1 Macro Analysis/Global Central bank monetisation raises risk of inflation and currency crisis
- 2 Weekend Reading/El Salvador Why Facebook and CBDC could be real winners from El Salvador’s Bitcoin embrace
- 3 Flash Report/Uruguay dLocal: Strong post-IPO rally reaffirms EM digital payments infrastructure story
- 4 Strategy Note/Global G7's 'Build Back Better World' is not an answer to China's Belt and Road
- 5 Macro Analysis/Global G7 reiterates support for SDR allocation and seeks to boost its impact
This publication is being distributed by Tellimer solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not con...