Earnings Report /
Thailand

MFEC PCL: Profit fell short of our estimate

  • Core earnings were 8% shy of our expectation

  • MFEC posted a 2Q22 net profit of Bt41m

  • Revenue was Bt1,327m in 2Q22

Napon Jaisan
Napon Jaisan

Equity Research Analyst

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Bualuang Securities
11 August 2022

We have a BUY rating to a YE22 target price of Bt11.50. MFEC’s project backlog is substantial. We expect the firm to prove stronger earnings for 2H22 as private sector investment recovers (supported by favorable seasonality). Moreover, the 3Q22 IPO of I-Two Plc (MFEC holds 15%) will unlock investment value.

Core earnings were 8% shy of our expectation

MFEC posted a 2Q22 net profit of Bt41m, down by 10% YoY and 21% QoQ. Excluding extra items—a Bt6.2m net FX loss, a Bt16.9m gain from a change in an investment classification (Data Café issued new shares to a third party, changing Data Café’s status from a subsidiary to a joint venture), and three non-recurring administrative expenses totaling Bt26m—core earnings would be Bt57m, up by 21% YoY and 5.5% QoQ. The core number was 8% below our estimate, as SG&A expenses exceeded our assumption.