FRIDAY, March 29, 2024
nationthailand

SVI

SVI

BUY Q2 2012A: Better margin pulls it 15% above SCBS 2Q12A above expectations.

SVI Plc

Q2 2012A above expectations. SVI reported 2Q12 net profit of Bt153mn. Excluding Bt46mn insurance claim and Bt22mn FX loss shows a 49% YoY fall and a 77% QoQ rise,both reflective of last year’s floods, to Bt129mn. What is of note is that a better operating margin than we had anticipated pulled it 15% above our forecast. We look for steady recovery throughout 2H12F, thanks to at least five new customers, more than enough to make up for the one customer lost in the floods. Given the strong recovery, we maintain Buy and a mid-2013 TP of Bt4.1 based on 11x PE.

Key highlights
-  Sales grew 30% QoQ to Bt2.1bn. It completed its post-flood equipment and facility
   repairs and manufacturing capacity returned to 80% of pre-flood level. Demand
   returned to almost normal, according to management.
- Operating margin recovered to 6.3% from 4.5% in the previous quarter, far better
   than our forecast of 5.5%.
-  The insurance companies are taking their own sweet time, with only Bt220mn
   paid in 1H12, leaving >Bt2bn expected in 2H12F. However, even if this is slow in
  coming, based on its Bt455mn retained loss as of 2Q12A against our estimated
  Bt353mn core profit in 2H12F, receipt of another insurance payment of just Bt400-
  500mn would allow SVI to resume paying dividends.

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