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报告摘要

MALEE Sampran (MALEE TB) Summary

Core Content

MALEE Sampran is a Thai-based company operating in the Consumer Staples sector. The current share price is THB33.50, with a target price of THB47.00, implying a 41% upside. The company has a market capitalization of THB4.7B and an average daily trading volume of THB0.2M. The stock is currently trading at 9x FY14F PE with a prospective yield of 6.2%, and is considered undervalued.

Main Points

Earnings Recovery: Despite a 48% YoY drop in FY13 due to political turmoil and lower utilization rates, the company's earnings forecast for FY14 remains largely unchanged. The three-year net profit CAGR is 47%, and the ROE is a strong 42%.
Utilization Rate Adjustments: The utilization rate for the CBBB facility is lowered to 65% for FY14 from 80% in FY13, due to weaker demand in the first half of the year. However, this is expected to be offset by higher selling prices and the elimination of the loss-making canned sweet corn business.
Brand Growth and Market Penetration: MALEE is gradually gaining market share in the premium juice segment in Thailand, increasing from 23% in 2011 to 25% in 2013. It also aims to expand its presence in the ASEAN market, with successful product placements in Philippines.
CM Strategy: MALEE is expanding its contract manufacturing (CM) business, currently producing for global and regional brands such as Nescafe, Birdy, Nestle, S & P Syndicate, Central Group, Fuji Japanese Restaurant chain, Vita Coco, and Zico. The company aims to add at least four new CM clients in FY14.
Margins and Profitability: The company has maintained good margins even during the slowdown, with CBBB gross margin improving by 140bps. The ASP for CBBB products is THB26, which is higher than the previous forecast. MALEE's core net profit is expected to grow significantly, with a 47% pa growth in net profit during 2013–2016.
Valuation and Fair Value: Based on the Gordon Growth model, the fair value of MALEE is THB47, which is 12M price target. The company is trading at 9x FY14F PE and 6.1x FY15F PE, indicating it is undervalued. The ROE is 42%, and the cost of equity is 12%, with a terminal growth rate of 3%.
Earnings Trajectory: The earnings forecast for FY14 is +83% YoY, which is expected to attract investor attention. The market has already priced in the weak earnings scenario from FY13, and the stock has outperformed the SET by 1.6% in the past three months.
Risk Factors: The main risks include weaker demand in Thailand, which could cap growth in the branded segment, and failure of the CM business to deliver.

Key Information

FY13 Performance: Net profit fell by 48% YoY, with the 4Q13 sales dropping 11% QoQ due to a drastic slowdown in consumption. The closure of the canned sweet corn business added to the cost, resulting in a 68% QoQ drop in 4Q13 profits.
FY14 Forecast: Revenue is expected to be THB6,202.1M, with core net profit of THB517.3M, core EPS of THB3.69, and core P/E of 9.1x. The utilization rate is expected to rise to 80% in FY15, leading to a core net profit of THB758.2M and core EPS of THB5.42.
Dividend Yield: The net dividend yield is projected to increase from 6.1% in FY14 to 10.7% in FY16, showing strong potential for dividend growth.
Peer Valuation: MALEE's P/E and P/BV ratios are lower than its peers, which supports the view that it is undervalued. The ROE is also higher than most peers, indicating strong profitability.
Key Ratios:
- ROAE: Increased from 27.4% in FY13 to 43.9% in FY14.
- ROAA: Improved from 10.4% in FY13 to 17.5% in FY14.
- Free Cash Flow Yield: Increased from 4.6% in FY12 to 14.3% in FY16.
Dividend Cover: Improved from 1.9x in FY13 to 1.8x in FY14, indicating better financial health.
Share Price Performance: The stock has underperformed the SET by 41% over the past year, but has shown positive performance in the last three months.

Strategic Outlook

MALEE aims to grow its brand in the premium juice segment and expand its CM business to increase profitability.
The closure of the canned sweet corn business is expected to improve the profitability profile from FY14 onward.
The company is focused on increasing its market share in the premium juice segment, with new product launches and strategic partnerships.
The Gordon Growth model is used to value the stock, which is considered undervalued given its high ROE and strong earnings growth.

Conclusion

MALEE Sampran is a highly profitable company with a strong earnings growth trajectory and potential for expansion in the premium juice and CM segments. The current share price is undervalued, and the target price of THB47 suggests a 41% upside. The company is well-positioned for recovery, with no price destruction and good margins. Investors are advised to consider the stock as a BUY due to its strong fundamentals and growth potential.