Despite the dull outlook for 1H22, SCC’s earnings look set to rebound in 2H22, boosted by improvements across all businesses. Moreover, SCC’s current valuations are a bargain—trading at a YE22 PBV of 1.2x (1.6SD below its long-term average of 2.2x)—with a good 2022 dividend yield of 4.2% (against 2.7% for the SET).
Core earnings softness expected for 1Q22
We project SCC to post a 1Q22 net profit of Bt7,821m (down by 48% YoY and 6% QoQ), squeezed by the assumed smaller extra gain on inventories and weaker operational performances. Stripping out extra items, 1Q22 core earnings are forecast at Bt6,996m (down by 49% YoY and 5% QoQ), squeezed by smaller profits across all businesses—Chemical, Cement & Building Materials (CBM), and Packaging.