Stock Attractiveness: Considered very attractive due to low P/E and high dividend yield
Financial Forecasts
Metric
9M13 (THB m)
FY13 Forecast (THB m)
% of Forecast
Sales
4,013
5,468
73%
EBITDA
433
652
66%
Net Profit
258
424
61%
Earnings Table (FY ends Dec 31)
Metric
2011A
2012A
2013F
2014F
2015F
Revenue
3,726
6,286
5,468
6,735
8,492
EBITDA
312
848
652
771
949
Recurring Earnings
228
583
424
517
660
Recurring Basic EPS
0.3
4.2
3.1
4.1
5.2
EPS Growth (%)
114.1
1,318.1
-32.1
30.9
27.7
DPS (THB)
0.0
1.5
1.3
1.6
2.1
PER (x)
20.7
8.5
10.6
8.1
6.3
EV/EBITDA (x)
8.5
7.7
9.6
8.3
6.9
Dividend Yield (%)
0.0
2.1
3.8
4.9
6.3
P/BV (x)
8.6
4.6
3.2
2.6
2.0
Net Gearing (%)
77.9
30.4
17.6
9.7
1.0
ROE (%)
41.7
60.4
31.9
31.5
31.9
ROA (%)
10.1
23.9
14.2
14.9
16.0
Key Performance Notes
3Q13 Disappointment: Net profit fell 9% QoQ, far below the expected 17% growth, and 52% YoY.
Sales Decline: Domestic sales dropped to THB1.023 billion in 3Q13, while exports increased to THB184 million.
Margin Improvement: Despite lower sales, margins improved significantly, with domestic GM at 29.4% and export GM at 37.9%.
Costs: Selling expenses were 16.2% of sales, and administrative expenses were 7.1%.
Recurring Earnings: Expected to be THB424 million for FY13, which is 61% of the full year estimate.
Stock Valuation: Trading at 8.1x 2014 PE and 4.9% yield, considered very attractive.
Recommendation: Maintain BUY due to margin preservation and undervaluation.
Highlights and Product Line
Products: Includes canned fruits, fruit juices, corn milk, drinking water, and UHT pasteurized milk.
New Product Launch: "Healti Plus" launched in August, helping to raise brand awareness.
Diversified Portfolio: MALEE also packages and distributes UHT pasteurized milk of Farm Chokchai and ready-to-drink coffee under Nescafe and Birdy.
Product Breakdown: Includes Malee Coco, Malee Fruit Juice, Malee Veggies, Malee Juice Mix, Malee Canned Fruit, and Malee I-Corn.
Financial Summary
Net Profit (2013F): THB424 million
EBITDA (2013F): THB652 million
Cash and Cash Equivalents (2013F): THB59 million
Total Assets (2013F): THB2,985 million
Total Liabilities (2013F): THB1,656 million
Shareholders' Equity (2013F): THB1,329 million
Net Debt to Equity: 0.2x (2013F)
Key Trends and Analysis
Market Conditions: The 3Q13 performance was affected by a slowdown in consumption, with MALEE outperforming competitors by not engaging in aggressive pricing strategies.
Growth Expectations: MALEE is expected to meet full year sales forecast but likely to miss the net profit target.
Margin Trends: Margins improved significantly, with a weighted GM of 31% in 3Q13 vs 28% in 3Q12.
Valuation Metrics: The stock is undervalued compared to its intrinsic value, with a P/BV of 3.2x and a P/E of 8.1x.
MBKET Rating and Price Target Trends
MBKET Rating: Indicates a positive outlook on the stock.
Price Target Trends: The target price remains unchanged at THB44.00.
Disclaimer
This report is for general information and not intended as personal investment advice.
MKE disclaims liability for any losses or damages arising from the use of this report.
Forward-looking statements are subject to risks and uncertainties.
The information is based on sources believed to be reliable but not independently verified.
The report may be subject to change without prior notice.
