GGC’s recent share price dive has already accounted for the weak 2Q20 result, we believe. The stock trades at a 2021 PER of 12.7x and a PBV of only 0.9x, far below its historical means. Expectations of recoveries in demand and earnings in 2H20 and 2021 should boost the stock price going forward.
Net loss was shallower than our estimate
GGC posted a 2Q20 net loss of Bt344m, deeper YoY and a reversal from the net profit posted for 1Q20. Stripping out a Bt374m inventory loss, a Bt20m FX loss, and a Bt10m gain on derivatives, core earnings would be Bt40m, up 69% YoY but down 69% QoQ. The net loss was shallower than our estimate (but was in line with the consensus), due to a higher ME biz profit than expected.