Despite the freight rate downtrend, RCL’s stock price is too cheap—equal to only 1.6x its assumed YE22 cash (projected at Bt26/share). The stock price has never previously fallen below 2x its cash level (not in its best years, nor in its worst years; 2022 is as far away as is possible from being RCL’s worst year). Hence, we believe that buying the stock now entails only modest downside risk.
Net profit was even higher than expected
RCL announced 2Q22 NPAT of Bt7,358m, up 131% YoY but down 11% QoQ. The number was 7% ahead of our estimate (the company reported a big extra gain from sales of assets). Stripping out extra items, core earnings would be Bt6,620m, up 108% YoY but down 19% QoQ. The core number was in line with our estimate.