Expectations of enhanced core earnings growth through 4Q22, the substantial core operational improvement this year, underpinned by GRM expansion should catalyze the share price going forward. Furthermore, SPRC’s current valuation is still undemanding—a YE23 PBV of 1.3x (0.5SD below its long-term average).
Shallower net loss than estimate
SPRC reported a 3Q22 net loss of Bt5,027m, a reversal from net profits posted in 3Q21 and 2Q22. Stripping out a Bt6,978m inventory loss, a Bt433m FX loss, and a Bt187m loss on derivatives, the core profit would be Bt1,089m, a YoY turnaround but down 82% QoQ. The net loss was 7% shallower than our estimate, due to smaller inventory loss than modeled (but it was 26% deeper than that of the consensus).