Equity Analysis /
Thailand

Siam Cement: Uninspiring 1H22 outlook, brighter prospects for 2H22

  • Core earnings softness expected for 1Q22

  • Chemical core earnings to decline YoY and QoQ

  • Core profits for CBM and Packaging to slip YoY, but rise QoQ

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Bualuang Securities
11 April 2022

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.