Strategy Note /

Thailand: Thai Market Strategy - 4Q21 earnings wrap & 1Q22 outlook

  • 4Q21 net profit surged 50% YoY

  • 1Q22 NPAT to nudge up 1% YoY; core profit to rise 24% YoY

  • Earnings upgrade momentum for 2022E has slowed

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
7 March 2022

The YoY increase in the 4Q21 aggregate bottom-line was driven partly by business recovery, higher oil prices and low base comparisons (write-downs in 4Q20). Barring the imposition of more lockdowns, our preliminary 1Q22 core earnings estimate shows a strong growth of 24% YoY (and +4%QoQ). And assuming no drastic escalation in geopolitical risk, we expect (near) normalization of domestic business should keep investors fairly upbeat for further bourse upside for the remainder of the 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.

4Q21 net profit surged 50% YoY

Aggregate 4Q21 net earnings (under BLS coverage) increased 50% YoY and 42% QoQ. Core profit rose 58% YoY and 20% QoQ. Key sectors that posted notable YoY growth were Healthcare (higher revenue from COVID-related services), Shipping (higher freight rates), Energy (higher oil price, GRM), Chemical (greater sales volume, fatter spreads for several of IVL’s products), Consumer (recovery in same-store-sales, expanded EBIT margin), Bank (decent loan growth, slimmer expenses). Aggregate net profit was 4.5% above our estimate (and beat the consensus by 7.3%), while core earnings were only 1% short of our expectation.