Equity Analysis /

Ditto Thailand: Planting the seeds of growth

  • 100% revenue secured for this year

  • Every seed planted in the past is sprouting

  • Another seed planted

Napon Jaisan
Napon Jaisan

Equity Research Analyst

Bualuang Securities
18 August 2022

Earlier this year, DITTO’s stock price rose more than 500%. We believe that a new rally is coming, driven by strong earnings growth and good news flows. We have upgraded our recommendation from HOLD to BUY with a TP of Bt70—PER at 2SD above its long-term mean (a mean of tech space PER). Under our best bet valuation, 3SD is tops (the highest PER of such tech stocks), which will translate into a DITTO’s stock price of Bt90.

100% revenue secured for this year

DITTO’s 1H22 core earnings accounts for 53% of our 2022 core profit assumption of Bt230m (up 42% YoY). 2H earnings are typically equal to/more than 1H. Therefore, we see 5-10% scope for earnings upside.  DITTO’s current orders backlog is Bt1.5bn. We expect 50% of that number to be recognized as revenue in 2022, which comprises 100% of our 2022 income assumption of Bt1.3bn There are many projects in the pipeline with an aggregate value of about Bt5bn, which are expected to be opened to tender late this year. We, thus, believe that downside risk is small, while the scope for upside is huge.