Sino-Thai Eng. & Con. Plc

Sino-Thai Eng. & Con. Plc

Net profit Bt1.73bn (EPS Bt1.14), core Bt1.45bn (EPS Bt0.95). Net profit beat our
forecast (Bt1.43bn, EPS Bt0.94) on an extra gain of Bt294mn from adjustment of the
fair value of its investment properties. Removing this gives core profit of Bt1.45bn (EPS
0.95), in line with SCBS.
Undervalued, BUY with TP Bt21. Even though end-2013 backlog of Bt51bn is enough
to supply revenue for only two years, well below CK (Bt120bn) and ITD (Bt147bn),
whose backlog will carry them for four years, we see the stock as undervalued and
continue to Buy. We base our target price of Bt21 on 2014 PER of 20x; we also use DCF
assuming zero growth and this gives a value of Bt21.38.
Highlights:
2013 construction revenue was Bt22.2bn, +12.6% YoY, in line with our estimate.
Total revenue in 4Q13 was Bt6.0bn, +10%YoY, -3%QoQ. Revenue came primarily
from three MRT lines – Purple, Blue and Green – plus two IPPs for Gulf and Phuket
international airport. Other income came from gain from fair value adjustment,
not included in cash flow. Interest income was a large Bt310mn in 2013, based on
a total of Bt8.6bn in cash on hand and in short term investment.
2013 gross margin was 9.4%, improved from 8.3% last year, with a net margin of
6.5%, a good widening from 5.5% in 2012 and the strongest of the big three (ITD,
CK and STEC)
4Q13 net profit excluding extra items was Bt379mn, Bt0.25/share, +31%YoY,
-2%QoQ, slightly above our estimate of Bt367mn.