Strategy Note /

Thailand: Thai Market Strategy - 2Q22 earnings wrap & 3Q22 outlook

  • 2Q22 net profit rose 35% YoY

  • 3Q22 NPAT to skyrocket 84% YoY; core profit to rise 68% YoY

  • Upward earnings forecast revisions continued

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
22 August 2022

The YoY increase in the 2Q22 aggregate bottom-line was driven by the release of pent-up demand (following the lifting of COVID-related restrictions) and higher oil prices. Assuming that multiple global headwinds ease—high commodity prices (exacerbated by the Russia-Ukraine war), global recession risk, China’s economic slowdown (a property market crash and Beijing’s zero-COVID policy)—our prelim-inary 3Q22 core earnings forecast points to growth of 68% YoY (but down 15% QoQ). We expect the ongoing normalization of domestic business and the return of inbound tourism to be the 2H22 drivers.

Our YE22 SET target of 1705 implies a PER of 17.4x (0.6SD above the SET’s 10-year mean) and EPS of 98 (and 108 for 2023, against consensus numbers of 103.4 and 109.5, respectively).

2Q22 net profit rose 35% YoY

Aggregate 2Q22 net earnings (BLS coverage) increased by 35% YoY and 26% QoQ. Core profit rose by 75% YoY and 41% QoQ. The key sectors that marked notable YoY growth were Energy (higher oil prices, a fatter GRM), Shipping (higher freight rates), Media (low 2Q21 bases), Industrial Estate (greater land transference), and Electronics (strong demand for cloud storage and data center-related products). Aggregate net profit was 2.2% above our estimate (and beat the consensus by 6.9%). Core earnings were 21% above our expectation.