2021-12-08-瑞士信贷集团-泰国_2022年令人鼓舞的迹象_27页_769kb

Thailand Retail Sector Analysis Summary

Overview for 2022

• 3Q2021 marked the bottom of the retail sector in Thailand.
• Encouraging signs include improving consumer spending, easing COVID restrictions, and reduced operational drags (e.g., extra COVID-related expenses).
• Retailers like CPALL and CRC show notable demand pickup with same-store sales growth (SSSG) turning positive in October/November 2021.
• Google mobility data indicate nearly peak retail and grocery traffic since the outbreak.

Sector Metrics & Valuation

• The 12M P/E on 2023 normalized earnings is nearly a decade low.
• The sector P/E relative to the SET index is significantly discounted from its historical average.
• Valuations fully discount COVID-19 impact but are yet to reflect pandemic recovery normalization.

Key Recommendations

• Rotate toward CPALL and CRC due to their leadership in operations normalization, discretionary spending benefits, and omni-channel strength.
• Trim MAKRO target price from Bt50 to Bt48 due to reduced public offering size.
• Raise CRC target price to Bt42 from Bt41, reflecting strong post-COVID recovery potential.

Risks & Concerns

• Lingering COVID impact may prolong challenges compared to past crises.
• Online competition could hinder valuation upgrades for entrenched players like BJC.
• New competitive environment and regulatory changes (Retail & Wholesale Business Act) are concerns.

Event Study Indicators

• SSSG turned positive in October/November 2021 for most retailers.
• Google mobility data show near-peak retail/grocery activity.
• Bottom identified in Q3 2021; pent-up demand and reopening prospects drive recovery.

Key Players & Performance

• CPALL: OUTPERFORM rating with target price of Bt78; best risk-reward due to convenience store leadership and restructuring benefits.
• CRC: OUTPERFORM rating with target price of Bt42; highest leverage to discretionary spending recovery.
• BJC and MAKRO: NEUTRAL; face restructuring challenges and online competition risks.

Investment Outlook

• Normalization of operations expected to pick up in 2022 with clearer momentum from mid-year.
• CPALL and CRC offer superior share price performance due to structural growth factors post-pandemic.
• Event-Driven Investing (EDS) mid-term focus on catalysts like the SOTUS reopening and economic recovery.