Left Brain Right B - the DBS Vickers Securities Equities Research
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Left Brain Right B - the DBS Vickers Securities Equities Research

Left Brain Right B - the DBS Vickers Securities Equities Research Left Brain Right B - the DBS Vickers Securities Equities Research

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Regional Equity Strategy 4Q 2009 Country Assessment This page has been left blank intentionally Page 123

Regional Equity Strategy 4Q 2009 Siam Cement Bloomberg: SCC TB | Reuters: SCC.BK BUY Bt229.00 SET : 709.23 Price Target : 12-month Bt 252.00 Potential Catalyst: Sustained petrochemical spreads, economic recovery Analyst Vichitr Kuladejkhuna CFA +66 2657 7826 vichitrk@th.dbsvickers.com Price Relative 280 230 180 130 80 Bt Relative Index 2005 2006 2007 2008 2009 Siam Cement ( LHS ) Relative SET INDEX ( RHS ) Forecasts and Valuation FY Dec (Bt m) 2008A 2009F 2010F 2011F Turnover 293,230 235,563 295,249 312,934 EBITDA 38,981 50,637 55,076 53,175 Pre-tax Profit 20,968 29,864 33,268 31,458 Net Profit 16,771 21,262 23,238 21,521 Net Pft (Pre Ex.) 16,507 21,262 23,238 21,521 EPS (Bt) 14.0 17.7 19.4 17.9 EPS Pre Ex. (Bt) 13.8 17.7 19.4 17.9 EPS Gth Pre Ex (%) (36) 29 9 (7) Diluted EPS (Bt) 14.0 17.7 19.4 17.9 Net DPS (Bt) 7.5 8.5 10.0 10.0 BV Per Share (Bt) 72.7 82.4 92.5 100.5 PE (X) 16.4 12.9 11.8 12.8 PE Pre Ex. (X) 16.6 12.9 11.8 12.8 P/Cash Flow (X) 11.3 9.8 8.9 9.7 EV/EBITDA (X) 10.7 8.4 7.5 7.6 Net Div Yield (%) 3.3 3.7 4.4 4.4 P/Book Value (X) 3.1 2.8 2.5 2.3 Net Debt/Equity (X) 1.1 1.0 0.8 0.6 ROAE (%) 19.3 22.8 22.1 18.6 Earnings Rev (%): - - - Consensus EPS (Bt): 17.5 18.6 22.3 ICB Industry : Industrials ICB Sector: Construction & Materials Principal Business: Thailand’s largest conglomerate with core businesses in cement, petrochemical, paper, and building materials. Source of all data: Company, DBS Vickers, Bloomberg 219 199 179 159 139 119 99 79 59 Riding on economic recovery • Sustainable demand and delay in new capacity will keep petrochemical spreads at healthy levels • Latest data on domestic cement sales and Consumer Confidence Index are encouraging • Petrochemical may not have bottomed out, but its non-chemical business should recover in tandem with the economy in 2010 • Maintain BUY and Bt252 TP (13x 2010 PE). Resilient petrochemical spreads, early recovery signs in non-chemical business. HDPE and PPnaphtha spreads remained at above US$600/tonne, supported by firm regional demand attributed to economic stimulus packages across the region, the industry’s low inventory level, and delay in new capacity. SCC’s new naphtha cracker capacity should cushion against weaker petrochemical spreads in 2010. Improving prospects for non-chemical businesses. Domestic cement sales turned around to grow y-o-y starting in June, while the Consumer Confidence Index had ticked up for 3 consecutive months since May. The government’s 2nd stimulus package should accelerate domestic construction activities from 2010 onwards. Maintain BUY. SCC’s prospects will improve, led by an economic recovery, better than previously expected petrochemical outlook, strong balance sheet, and solid cash flow. Hence, we maintain a BUY rating, with a 14% total return to our Bt252 target price. At A Glance Issued Capital (m shrs) 1,200 Mkt. Cap (Btm/US$m) 274,800 / 8,152 Major Shareholders The Crown Property Bureau (%) 30.0 Thai NVDR (%) 8.9 Chase Nominees Limited 42 (%) 3.7 Free Float (%) 67.9 Avg. Daily Vol.(‘000) 2,757 Page 124 www.dbsvickers.com Refer to important disclosures at the end of this report ed-SGC / sa-CS

Regional Equity Strategy 4Q 2009<br />

Country Assessment<br />

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Page 123

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