Strategy Note /

Thailand: Thai Market Strategy - 3Q21 earnings wrap & 4Q21 outlook

  • 3Q21 net profit rose 14% YoY

  • 4Q21 net profit to increase 35% YoY; core profit up 54% YoY

  • Earnings misses may limit 2021 profit forecast upgrade flows

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
19 November 2021

The moderate YoY increase in the 3Q21 aggregate bottom-line was driven largely by commodity plays; domestic sectors were impacted by the Jul-Aug lockdown, following a blowout in COVID-19 infections. Those domestic sectors should see QoQ rebounds in 4Q21, enabling aggregate 4Q21 net profit to post strong growth of 35% YoY and 28% QoQ, according to our forecast. And we would expect ongoing COVID-19 vaccine coverage progress and the (near) normalization of business to keep investors fairly upbeat over the scope for further upside to the SET into next year.

Our YE22 SET target of 1793 implies a PER of 18.3x (1SD above the market’s 10-year mean) and EPS of 98.

3Q21 net profit rose 14% YoY

Aggregate 3Q21 net earnings (under BLS coverage) increased 14% YoY but dived 30% QoQ (partly due to the Jul-Aug hard lockdown). Core profit rose 36% YoY but slid 14% QoQ. The few major sectors that posted notable YoY growth were Healthcare (higher revenue from COVID-related services), Energy (GRM), Chemical (greater sales volume, fatter spreads for some products), Shipping (higher freight rates), and Bank (lighter loan loss provisions). Aggregate net profit was 11% below of our estimate, while core earnings were only 2% short of our expectation.