Equity Analysis /

Thailand: Technology - Three rising stars emerge from the darkness

  • Strong demand to boost 2Q22 profits

  • Earnings momentum in 3Q22

  • Valuation checks

Napon Jaisan
Napon Jaisan

Equity Research Analyst

Bualuang Securities
4 August 2022

Tech shares have been mauled by this year’s bear market. Interest rates are a factor, but not a big determinant in tech investing. Eventually, quality companies will stand out and make a comeback. We expect three—SABUY, IIG and DITTO—of our Thai tech & innovation plays to report strong profit growth for 2Q22 (>20% YoY), despite the uncertainty of the economic situation. Strong 2Q22 earnings could spell a reversal in their stock prices.

Strong demand to boost 2Q22 profits

We expect the seven tech & innovation stocks under coverage to report aggregate 2Q22 net earnings of Bt463m, up 55% YoY and 31% QoQ. Three of the tech stocks should post >20% YoY core earnings growth in 2Q22. Our models point to SABUY leading growth with a 2Q22 bottom-line spurt of 285% YoY and 69% QoQ, as new businesses ramp up. The runner-up should be DITTO with 2Q22 core earnings growth of 63% YoY and 5% QoQ, thanks to income from both new clients and existing customers. The second runner-up will be IIG with anticipated earnings growth of 29% YoY but flattish QoQ, due to strong demand. BOL (up 13% YoY and 26% QoQ) and YGG (up 13% YoY and 17% QoQ) should post moderate earnings growth YoY and QoQ.