Earnings Report /
Thailand

Asset World Corp PCL: Net profit in 3Q21 was due to gains on fair value asset change

  • Core loss was near our estimate but beat the consensus

  • AWC reported a net profit of Bt686m for 3Q21

  • We forecast core loss of Bt2.2bn in 2021

Narumon Ekasamut
Narumon Ekasamut

Equity Research Analyst

Bualuang Securities
12 November 2021

Although heading into positive territory for the Thai tourism sector after the re-opening, AWC as Thailand’s tourism flagship is still deeply laggard to peers, with 20% share price discount to its pre COVID-19 level (at YE19), versus 17% discount for ERW, and 5% discount for MINT: CENTEL’s share price has rallied at 44% premium to its pre-COVID level. AWC is a bargain investment as the most laggard at 3% YTD share price increase versus a 40% jump for CENTEL, 38% for ERW and 31% for MINT (despite operation losses reported at all four companies). We maintain BUY rating, at a YE22 DCF-derived target price of Bt5.00 (7.0% WACC and 3.0% terminal growth).

Core loss was near our estimate but beat the consensus

AWC reported a net profit of Bt686m for 3Q21, a turnaround from net loss of Bt471m in 3Q20 and Bt199m in 2Q21 due to Bt1.4bn net-tax gains of change in fair value of investment property. Core loss was Bt698m, deeper than Bt471m loss in 3Q20 but improved from core loss of Bt758m in 2Q21. Core loss was near our estimate but less than loss forecast by consensus of Bt804m.