COMPANY UPDATE

Thailand

C.P. All (CPALL.BK/CPALL TB)*

ประมาณการ 2Q61: คาดว่ ากาไรจะโต 16% YoY

Outperform‧Maintained Price as of 9 Jul 2018

79.00

12M target price (Bt/shr)

92.00

Unchanged/Revised up (down)

Unchanged

(%)

Upside/downside (%)

16.5

Key messages

เราคาดว่ากาไรสุ ทธิของ CPALL ใน 2Q61 จะอยูท่ ี่ 5.38 พันล้านบาท (+15.7% YoY, -0.7% QoQ) เนื่องจาก i) คาด ว่า SSSG จะอยูท่ ี่ 3.0% ii) มีการเปิ ดสาขาใหม่ 220 สาขา และ iii) GPM อยูท่ ี่ 22.3% เราคาดว่าสัดส่ วน SG&A ต่อ ยอดขายจะทรงตัว YoY อยูท่ ี่ 19.5% แต่เพิม่ ขึ้นจาก 18.9% ใน 1Q61 เนื่องจากค่าใช้จ่ายที่เกี่ยวกับพนักงานและการ ขยายสาขาเพิ่มขึ้น บวกกับค่าใช้จ่าย SG&A ที่สูงขึ้นของ MAKRO เรามองว่าแนวโน้มดูสดใสมากขึ้นใน 2H61 การจัดแคมเปญแสตมป์ เซเว่นใน 3Q61 และวันหยุดยาว และช่วงเทศกาลเฉลิมฉลองในไตรมาสที่สี่ เรายังคงแนะนา ให้ซ้ื อ และให้ราคาเป้าหมายปี 2561 ที่ 92.00 บาท Trading data Mkt cap (Btbn/US$mn) Outstanding shares (mn) Foreign ownership (mn) 3M avg. daily trading (mn) 52-week trading range (Bt) Performance (% ) Absolute Relative

710/19991 8,983 3,199 19.3 59.8-90 3M 6M 12M -8.9 3.6 30.6 -1.2 14.6 26.3

Quarterly EPS Bt 2016 2017 2018

Q1 0.45 0.53 0.60

Q2 0.47 0.52 n.a.

Q3 0.46 0.55 n.a.

Q4 0.48 0.62 n.a.

Share price chart 100

40

90

30

80

20

70

10

60

0

50 Jul-17

(10) Sep-17

Nov-17

Share Price

Source: SET

Voranart Meethavorn 66.2658.8888 Ext.8856 [email protected]

Feb-18

Apr-18

Event ประมาณการ 2Q61 lmpact ธุรกิจร้ านสะดวกซื้ อยังไปได้ ดี เราคาดว่ากาไรสุ ทธิ ของ CPALL ใน 2Q61 จะอยูท่ ี่ 5.38 พันล้านบาท (+15.7% YoY, -0.7% QoQ) ถึงแม้วา่ การจับจ่ายใช้สอยในเดือนเมษายนจะไม่ค่อยแข็งแกร่ งเท่าไหร่ เนื่ องจากยอดขายเครื่ องดื่มชะลอ ตัวเพราะฝนตก แต่การจับจ่ายที่เพิม่ ขึ้นในช่วงวันหยุดยาว และการแข่งขันฟุตบอลโลก รวมถึงการขึ้น ภาษีสรรพสามิตบุหรี่ ก็จะช่วยหนุนให้ SSSG อยูท่ ี่ 3.0% เราคาดว่าในไตรมาสนี้ จะมีการเปิ ดสาขาใหม่ ประมาณ 220 สาขา ส่ งผลให้จานวนสาขาที่เปิ ดใหม่ต้ งั แต่ตน้ ปี นี้ อยูท่ ี่ 485 สาขา คิดเป็ น 69% ของเป้า สาขาเปิ ดใหม่ปีนี้ ที่ 700 สาขา ทั้งนี้ เมื่อรวมรายได้จากธุรกิจ Cash & Carry business (Siam Makro (MAKRO.BK/MAKRO TB)) 4.58 หมื่นล้านบาทเข้ามาในงบรวมจะทาให้รายได้ของ CPALL สูงถึง 1.24 แสนล้านบาท (+6.8% YoY, +0.3% QoQ) เราคาดว่า GPM จะเพิม่ ขึ้นเล็กน้อยเป็ น 22.3% จาก 22.2% ใน 2Q60 และ 1Q61 เนื่ องจากมีสดั ส่วนสิ นค้าที่มี margin สูงเพิม่ ขึ้น แต่อย่างไรก็ตาม เราคาดว่า สัดส่ วน SG&A ต่อยอดขายจะทรงตัว YoY อยูท่ ี่ 19.5% แต่เพิม่ ขึ้นจาก 18.9% ใน 1Q61 เนื่องจาก ค่าใช้จ่ายที่เกี่ยวกับพนักงานและการขยายสาขาเพิม่ ขึ้น บวกกับค่าใช้จ่าย SG&A ที่สูงขึ้นของ MAKRO ...แต่ ธุรกิจ Cash and Carry มีค่าใช้ จ่ายสู ง เราคาดว่ากาไรสุ ทธิ ของ MAKRO ใน 1Q61 จะอยูท่ ี่ 1.27 พันล้านบาท (+2.9% YoY, -22.1% QoQ) โดย ถูกกดดันจากราคาขายที่ลดลงของอาหารสดบางรายการ (หมูและไก่) ประมาณ 10-17% ซึ่ งส่ งผลให้ SSSG ติดลบ 1.0% ทั้งนี้ MAKRO ได้เปิ ดสาขาใหม่สองแห่งในรู ปแบบ food-service ใน 2Q61 ทาให้ จานวนห้างที่เปิ ดดาเนิ นงานเพิ่มขึ้นเป็ น 126 สาขา ดังนั้น เราจึงคาดว่ารายได้จะอยูท่ ี่ 4.58 หมื่นล้านบาท (+2.9% YoY, -2.8% QoQ) ในขณะที่คาดว่า GPM จะอยูท่ ี่ 9.7% เพิ่มขึ้นจาก 9.5% ใน 2Q60 แต่ลดลง จาก 10.0% ใน 1Q60 ทั้งนี้ GPM ใน 1Q61 ได้อานิ สงส์จากรายการพิเศษที่เกิดขึ้นเพียงครั้งเดียวประมาณ 30bps จากการจัดสรรสิ นค้าคงคลัง แต่อย่างไรก็ตาม เราคาดว่าสัดส่ วน SG&A ต่อยอดขายจะเพิ่มขึ้นเป็ น 8.5% จาก 7.9% ใน 2Q60 และ 8.0% ใน 1Q61 โดยค่าใช้จ่าย SG&A ที่เพิ่มขึ้นส่ วนใหญ่จะมาจากการ ขยายสาขาในต่างประเทศ แนวโน้ มดูสดใสขึน้ ใน 2H61 ผลการดาเนิ นงานมีแนวโน้มดีข้ ึนต่อเนื่ องใน 3Q61 จากการแข่งขันฟุตบอลโลก, การจัดแคมเปญแสตมป์ เซเว่น และการขยายสาขา นอกจากนี้ วันหยุดยาว และช่วงเทศกาลเฉลิมฉลองในไตรมาสที่สี่ก็จะช่วย หนุนให้ผลการดาเนิ นงานในไตรมาสสุ ดท้ายสู งสุ ดในปี นี้ Valuation & Action เรายังคงราคาเป้าหมาย DCF ปี 2561 เอาไว้ที่ 92.00 บาท ซึ่งจากราคาปิ ดล่าสุดยังเหลือ upside ถึงราคา เป้าหมายของเราอีก 16.5% ดังนั้น เราจึงยังคงคาแนะนาซื้ อ Risks เศรษฐกิจฟื้ นตัวช้ากว่าที่คาดไว้ Key financials and valuations

Jul-18

Price performance relative to SET

Revenue (Btmn) Net Profit (Btmn) Normalized Profit (Btmn) Net Profit Growth (%) Normalized Profit Growth (%) EPS (Bt) DPS (Bt) P/E (X) P/B (X) EV/EBITDA (X) Net Debt to Equity (X) Dividend Yield (%) Return on Average Equity (%)

Dec - 16A 434,712 16,677 16,599 21.9 21.3 1.86 1.00 33.7 9.4 23.4 2.6 1.6 28.0

Dec - 17A 471,069 19,908 19,908 19.4 19.9 2.22 1.10 34.7 8.6 21.0 1.7 1.4 24.8

Dec - 18F 533,571 23,776 23,776 19.4 19.4 2.65 1.32 29.8 7.7 18.4 1.2 1.7 25.8

Dec - 19F Dec - 20F 602,735 672,898 28,432 34,228 28,432 34,228 19.6 20.4 19.6 20.4 3.17 3.81 1.58 1.91 25.0 20.7 6.6 5.7 15.9 13.4 0.9 0.5 2.0 2.4 26.6 27.6

Source: Company data, KGI Research

July 10, 2018

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

1

Thailand

C.P. All

Figure 1: CPALL's earnings preview Bt mn Revenue Gross Profit SG&A Operating Profit Operating EBITDA Interest expense Net Profit Normalized profit EPS (Bt) Normalized EPS (Bt) Percent Gross margin EBIT margin SG&A/sales

2Q18F 123,785 27,604 24,076 8,108 10,469 1,743 5,378 5,378 0.60 0.60 2Q18F 22.3 6.6 19.5

2Q17 116,134 25,801 22,744 7,574 9,738 2,014 4,647 4,666 0.52 0.52 2Q17 22.2 6.5 19.6

YoY (%) 6.6 7.0 5.9 7.0 7.5 (13.4) 15.7 15.3 15.7 15.3 YoY (ppts) 0.1 0.0 (0.1)

1Q18 QoQ (%) 123,652 0.1 27,438 0.6 23,404 2.9 8,427 (3.8) 10,698 (2.1) 1,789 (2.5) 5,417 (0.7) 5,424 (0.8) 0.60 (0.7) 0.60 (0.8) 1Q18 QoQ (ppts) 22.2 0.1 6.8 (0.3) 18.9 0.5

YoY (%) 2.9 5.4 10.1 4.3 4.9 19.8 2.9 2.9 2.9 2.9 YoY (ppts) 0.2 0.0 0.6

1Q18 QoQ (%) 47,168 (2.8) 4,728 (5.9) 3,766 2.9 2,104 (21.5) 2,651 (16.3) 409 (22.9) 1,628 (22.1) 1,628 (22.1) 0.34 (22.1) 0.34 (22.1) 1Q18 QoQ (ppts) 10.0 (0.3) 4.5 (0.9) 8.0 0.5

Source: Company data, KGI Research

Figure 2: MAKRO's earnings preview Bt mn Revenue Gross Profit SG&A Operating Profit Operating EBITDA Current taxation Net Profit Normalized profit EPS (Bt) Normalized EPS (Bt) Percent Gross margin EBIT margin SG&A/sales

2Q18F 45,850 4,447 3,874 1,651 2,218 315 1,267 1,267 0.26 0.26 2Q18F 9.7 3.6 8.5

2Q17 44,550 4,221 3,519 1,582 2,115 263 1,231 1,231 0.26 0.26 2Q17 9.5 3.6 7.9

Source: Company data, KGI Research

July 10, 2018

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

2

Thailand

C.P. All

Figure 3: Company profile

Figure 4: Expect earnings to continue to grow

CP All Plc. (CPALL) was established in 1988 by the Charoen

Net profit, in billions of Bt (LHS); net profit growth, percent (RHS)

Pokphand Group.The company is the sole operator of 7-Eleven convenience stores in Thailand. At the end of 2017 the company

40.0

had a total of 10,268 stores nationwide. Of the total, 4,556 stores

30.0

are in Bangkok and its vicinity (44%) and 5,712 stores are in

20.0

provincial areas (56%).In addition, the company has invested in

10.0

the operation of membership-based Cash & Carry trade center

23.0

22.0 21.0

20.0 19.0

0.0

18.0

under the name “Makro”.

2016A

2017A 2018F 2019F Net profit Net profit growth

Source: Company data

Source: Company data, KGI Research

Figure 5: Sales keep getting stronger

Figure 6: Expansion phase is ongoing

Sale, Btbn (LHS); GPM, percent (RHS)

2020F

Number of store, stores

800.0

23.0

600.0

22.5

400.0

22.0

200.0

700

700

726

700

10,268

10,968

11,668

12,368

9,542

2016A

2017A 2018F Number of stores

2019F New stores

2020F

710

21.5

0.0

21.0

2016A

2017A

2018F Sale

2019F GPM

2020F

Source: Company data, KGI Research

Source: Company data, KGI Research

Figure 7: Breakdown of food and non-food products

Figure 8: Historical SSSG by quarter

Sale breakdown, percent

SSSG, percent

28.8

29.2

29.6

29.4

28.8

29.1

29.5

29.4

30.2

5.0

6.0

5.6

4Q17

1Q18

4.4

2.6

2.4 1.2

71.2

70.8

70.4

70.6

71.2

70.9

70.5

70.6

69.8

(1.0) (2.5) 1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

1Q16

2Q16

3Q16

4Q16

Source: Company data, KGI Research

Source: Company data, KGI Research

Figure 9: Company’s PER

Figure 10: Company’s PBV

PER, times

PBV, times

50.0

1Q17

2Q17

3Q17

15.0 +2.0 sd = 41.8x

40.0

+1.0 sd = 36.9x Average = 32.1x

+2.0 sd = 12.7x +1.0 sd = 11.5x

12.0

Average = 10.2x

30.0 -1.0 sd = 27.2x

20.0

9.0 -1.0 sd = 9.0x

-2.0 sd = 22.3x

-2.0 sd = 7.8x 10.0 2013

6.0 2014

Source: KGI Research

July 10, 2018

2015

2016

2017

2018F

2019F

2013

2014

2015

2016

2017

2018F

2019F

Source: KGI Research

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

3

Thailand

C.P. All

Quarterly Income Statement Income Statement (Bt mn) Revenue Cost of Goods Sold Gross Profit Operating Expenses Other incomes Operating Profit Depreciation of fixed assets Operating EBITDA Non-Operating Income Interest Income Other Non-op Income Non-Operating Expenses Interest Expenses Other Non-op Expenses Equity Income/(Loss) Pre-tax Profit Current Taxation Minorities Extraordinary items Net Profit Normalized Profit EPS (Bt) Normalized EPS (Bt) Margins Gross profit margin Operating EBIT margin Operating EBITDA margin Net profit margin Growth Revenue growth Operating EBIT growth Operating EBITDA growth Net profit growth Normalized profit growth

Mar-15A

Jun-15A

Sep-15A

Dec-15A

Mar-16A

Jun-16A

Sep-16A

Dec-16A

Mar-17A

Jun-17A

Sep-17A

Dec-17A

Mar-18A

95,554 (75,125) 20,429 (17,085) 3,227 6,570 (1,704) 8,274 (19) 0 (19) (2,263) (2,263) 0 0 4,288 (842) (37) 0 3,408 3,428 0.38 0.38

97,292 (76,135) 21,158 (18,454) 3,384 6,087 (1,704) 7,791 (36) 0 (36) (2,167) (2,167) 0 0 3,884 (716) (29) 0 3,140 3,176 0.35 0.35

96,364 (75,068) 21,296 (18,906) 3,673 6,063 (1,973) 8,035 26 0 26 (2,074) (2,074) 0 0 4,015 (718) (39) 0 3,258 3,232 0.36 0.36

102,608 (80,191) 22,417 (19,455) 3,792 6,753 (1,974) 8,726 26 0 26 (2,082) (2,082) 0 0 4,697 (790) (30) 0 3,877 3,851 0.43 0.43

104,969 (82,253) 22,716 (19,420) 3,758 7,055 (1,940) 8,995 59 0 59 (2,054) (2,054) 0 0 5,059 (960) (34) 0 4,065 4,006 0.45 0.45

109,998 (86,035) 23,962 (21,451) 4,623 7,135 (2,042) 9,176 8 0 8 (2,097) (2,097) 0 0 5,046 (817) (33) 0 4,196 4,188 0.47 0.47

108,642 (84,600) 24,042 (21,283) 4,357 7,117 (2,146) 9,263 28 0 28 (2,160) (2,160) 0 0 4,985 (832) (38) 0 4,115 4,087 0.46 0.45

111,103 (86,800) 24,303 (21,513) 4,411 7,202 (1,940) 9,141 (17) 0 (17) (2,131) (2,131) 0 0 5,053 (714) (38) 0 4,301 4,318 0.48 0.48

113,329 (88,434) 24,894 (21,279) 4,179 7,794 (2,088) 9,882 5 0 5 (2,040) (2,040) 0 0 5,759 (951) (43) 0 4,765 4,760 0.53 0.53

116,134 (90,333) 25,801 (22,744) 4,518 7,574 (2,163) 9,738 (18) 0 (18) (2,014) (2,014) 0 0 5,542 (866) (29) 0 4,647 4,666 0.52 0.52

118,242 (91,742) 26,500 (23,624) 4,969 7,844 (2,221) 10,065 5 0 5 (2,000) (2,000) 0 0 5,848 (853) (25) 0 4,970 4,966 0.55 0.55

123,365 (95,493) 27,872 (24,254) 4,669 8,286 (2,272) 10,559 8 0 8 (1,939) (1,939) 0 0 6,356 (817) (14) 0 5,525 5,517 0.62 0.61

123,652 (96,214) 27,438 (23,404) 4,394 8,427 (2,271) 10,698 (7) 0 (7) (1,789) (1,789) 0 0 6,632 (1,181) (34) 0 5,417 5,424 0.60 0.60

21.4 6.9 8.7 3.6

21.7 6.3 8.0 3.2

22.1 6.3 8.3 3.4

21.8 6.6 8.5 3.8

21.6 6.7 8.6 3.9

21.8 6.5 8.3 3.8

22.1 6.6 8.5 3.8

21.9 6.5 8.2 3.9

22.0 6.9 8.7 4.2

22.2 6.5 8.4 4.0

22.4 6.6 8.5 4.2

22.6 6.7 8.6 4.5

22.2 6.8 8.7 4.4

0.6 20.4 51.6 32.9 31.8

1.8 (7.4) (5.8) (7.9) (7.4)

(1.0) (0.4) 3.1 3.8 1.8

6.5 11.4 8.6 19.0 19.1

2.3 4.5 3.1 4.9 4.0

4.8 1.1 2.0 3.2 4.5

(1.2) (0.3) 0.9 (1.9) (2.4)

2.3 1.2 (1.3) 4.5 5.7

2.0 8.2 8.1 10.8 10.2

2.5 (2.8) (1.5) (2.5) (2.0)

1.8 3.6 3.4 7.0 6.4

4.3 5.6 4.9 11.2 11.1

0.2 1.7 1.3 (2.0) (1.7)

Source: KGI Research

Peer comparison – Key valuation stats Rating

Target price (Bt)

Current price (Bt)

Upside (%)

17 EPS (Bt)

18F EPS (Bt)

19F EPS (Bt)

18F EPS gr. (%)

19F EPS gr. (%)

18F PER (x)

19F PER (x)

18F PBV (X)

19F PBV (X)

18F Div 19F Div 18F ROAE 19F ROAE Yield (%) Yield (%) (%) (%)

CPALL*

OP

92.00

79.00

16.5

2.22

2.65

3.17

19.4

19.6

29.8

25.0

7.7

6.6

1.7

2.0

25.3

26.2

CPN*

OP

93.00

72.75

27.8

2.24

2.71

3.12

21.0

15.0

26.8

23.3

4.5

4.0

1.3

1.5

19.1

17.1

GLOBAL*

N

17.50

17.10

2.3

0.42

0.49

0.57

18.5

14.8

34.6

30.1

4.6

4.3

1.2

1.3

12.7

13.8

HMPRO*

N

14.50

14.00

3.6

0.37

0.43

0.50

16.3

15.5

32.4

28.1

9.4

9.0

2.6

3.0

27.7

30.6

MAKRO

N

42.00

37.75

11.3

1.29

1.31

1.47

1.9

12.0

28.8

25.7

9.4

8.7

2.6

2.9

33.6

33.2

ROBINS*

OP

85.00

58.50

45.3

2.47

3.06

3.53

24.0

15.3

19.1

16.6

3.3

3.0

2.6

3.0

16.5

17.7

Sector

Overweight

28.6

24.8

6.5

5.9

2.0

2.3

22.5

23.1

Source: KGI Research

35

Simple average 30.3x

30

25 20 15 10 5

0 ROBINS

25.0 20.0

Simple average 2.0x

15.0 10.0 5.0 0.0 MAKRO

July 10, 2018

HMPRO

ROBINS

CPN

GLOBAL

CPALL

MAKRO

CPALL

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 CPALL

ROBINS

CPN

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

CPN

Please see back page for disclaimer

GLOBAL

4

Thailand

C.P. All

Balance Sheet As of 31 Dec (Bt mn) Total Assets Current Assets Cash & ST Investments Inventories Accounts Receivable Others Non-current Assets LT Investments Net fixed Assets Others Total Liabilities Current Liabilities Accounts Payable ST Borrowings Others Long-term Liabilities Long-term Debts Others Shareholders' Equity Common Stock Capital Surplus Retained Earnings Preferred Stock

Profit & Loss 2016 352,268 69,899 34,819 26,705 3,322 5,054 282,369 34 99,460 182,874 292,665 113,818 66,959 31,453 15,406 178,847 157,552 21,295 59,603 8,983 0 35,344 0

2017 360,299 66,573 28,879 27,376 3,303 7,015 293,725 34 106,394 187,297 280,070 112,107 74,742 4,326 33,039 167,963 145,128 22,835 80,229 8,983 0 45,728 0

2018F 347,547 58,760 20,679 28,945 3,801 5,336 288,787 34 109,963 178,790 255,230 118,981 78,565 0 40,416 136,249 112,238 24,011 92,317 8,983 0 57,616 0

2019F 355,480 63,478 20,420 32,572 4,459 6,027 292,002 34 112,664 179,303 248,704 120,550 88,411 0 32,140 128,154 101,031 27,123 106,775 8,983 0 71,832 0

2020F 376,296 81,359 33,429 36,224 4,978 6,729 294,937 34 115,018 179,884 252,113 144,235 98,322 0 45,913 107,879 77,598 30,280 124,183 8,983 0 88,946 0

Year to 31 Dec (Bt mn) Revenue Cost of Goods Sold Gross Profit Operating Expenses Other Incomes Operating Profit Depreciation of fixed assets Operating EBITDA Non-Operating Income Interest Income Other Non-op Income Non-Operating Expenses Interest Expenses Other Non-op Expenses Equity Income/(Loss) Pre-tax Profit Current Taxation Minorities Extraordinary items Net Profit Normalized Profit EPS(Bt) Normalized EPS(Bt)

Source: KGI Research

Source: KGI Research

Key Ratios

Cash Flow

Year to 31 Dec Growth (% YoY) Sales OP EBITDA NP Normalized Profit EPS Normalized EPS Profitability (%) Gross Margin Operating Margin EBITDA Margin Net Profit Margin ROAA ROAE Stability Gross Debt/Equity (%) Net Debt/Equity (%) Interest Coverage (x) Interest & ST Debt Coverage (x) Cash Flow Interest Coverage (x) Cash Flow/Interest & ST Debt (x) Current Ratio (x) Quick Ratio (x) Net Debt (Bt mn) Per Share Data (Bt) EPS Normalized EPS CFPS BVPS SPS EBITDA/Share DPS Activity Asset Turnover (x) Days Receivables Days Inventory Days Payable Cash Cycle Forecast drivers Same-store-sales growth (%) New store (stores)

Source: KGI Research

July 10, 2018

2016

2017

2018F

2019F

2020F

10.9 11.9 12.4 21.9 21.3 21.9 21.3

8.4 10.5 9.1 19.4 19.9 19.4 19.9

13.3 13.9 11.5 19.4 19.4 19.4 19.4

13.0 13.3 12.1 19.6 19.6 19.6 19.6

11.6 16.7 14.9 20.4 20.4 20.4 20.4

21.9 6.6 8.5 3.8 4.7 28.0

22.3 6.7 8.5 4.2 5.5 24.8

22.5 6.7 8.4 4.5 6.8 25.8

22.8 6.7 8.4 4.7 8.0 26.6

23.1 7.1 8.6 5.1 9.1 27.6

4.9 2.6 3.4 0.7 4.5 1.0 0.6 0.4 154,186

3.5 1.7 3.9 2.6 5.8 3.7 0.6 0.3 137,353

2.8 1.2 4.8 4.8 6.0 6.0 0.5 0.3 114,557

2.3 0.9 6.3 6.3 7.4 7.4 0.5 0.3 92,901

2.0 0.5 7.9 7.9 9.1 9.1 0.6 0.3 67,674

1.9 1.8 4.3 6.6 48.4 4.1 1.0

2.2 2.2 5.1 8.9 52.4 4.5 1.1

2.6 2.6 5.0 10.3 59.4 5.0 1.3

3.2 3.2 5.3 11.9 67.1 5.6 1.6

3.8 3.8 6.1 13.8 74.9 6.4 1.9

1.2 2.8 28.7 71.9 (40.5)

1.3 2.6 27.3 74.5 (44.7)

1.5 2.6 25.6 69.4 (41.2)

1.7 2.7 25.6 69.4 (41.1)

1.8 2.7 25.6 69.4 (41.1)

2.4 710

1.6 726

4.5 700

4.0 700

3.5 700

Year to 31 Dec (Bt mn) Operating Cash Flow Net Profit Depreciation & Amortization Change in Working Capital Others Investment Cash Flow Net CAPEX Change in LT Investment Change in Other Assets Free Cash Flow Financing Cash Flow Change in Share Capital Net Change in Debt Change in Other LT Liab. Net Cash Flow

2016 2017 2018F 2019F 2020F 434,712 471,069 533,571 602,735 672,898 (339,688) (366,002) (413,499) (465,319) (517,482) 95,024 105,067 120,072 137,416 155,416 (83,666) (91,902) (105,347) (118,709) (132,864) 17,150 18,334 20,995 21,798 24,885 28,508 31,499 35,720 40,505 47,438 (8,314) (8,744) (8,994) (9,662) (10,333) 36,899 40,243 44,882 50,329 57,804 77 (1) 0 0 0 0 0 0 0 0 77 (1) 0 0 0 (8,442) (7,993) (7,498) (6,470) (6,009) (8,442) (7,993) (7,498) (6,470) (6,009) 0 0 0 0 0 0 0 0 0 0 20,142 23,506 28,222 34,035 41,428 (3,323) (3,487) (4,413) (5,524) (6,940) (143) (111) (201) (242) (293) 0 0 0 0 0 16,677 19,908 23,776 28,432 34,228 16,599 19,908 23,776 28,432 34,228 1.86 2.22 2.65 3.17 3.81 1.85 2.22 2.65 3.17 3.81

2016 38,258 16,677 8,314 13,047 220 (29,214) (17,994) (10) (11,211) 9,043 (7,233) 0 (470) (6,763) 1,810

2017 46,156 19,908 8,744 17,393 111 (20,380) (16,011) 0 (4,369) 25,776 (30,200) (0) (22,630) (7,570) (4,424)

2018F 2019F 2020F 45,324 47,879 54,574 23,776 28,432 34,228 8,994 9,662 10,333 12,353 9,543 9,720 201 242 293 (10,845) (12,363) (12,687) (12,230) (12,363) (12,687) 0 0 0 1,385 0 0 34,479 35,516 41,888 (42,679) (35,775) (28,879) 0 0 0 (30,791) (21,559) (11,764) (11,888) (14,216) (17,114) (8,200) (259) 13,009

Source: KGI Research

Rates of Return on Invested Capital Year 2016 2017 2018F 2019F 2020F Year 2016 2017 2018F 2019F 2020F Year 2016 2017 2018F 2019F 2020F

+ COGS Revenue 76.2% 75.8% 75.8% 75.6% 75.4% 1/ Working Capital + Revenue 0.0 0.0 0.0 0.0 0.0 x Operating Margin -1.3% -1.1% -1.2% -0.5% -0.3%

1-

Depreciation Revenue 1.9% 1.9% 1.7% 1.6% 1.5% Net PPE Revenue 0.2 0.2 0.2 0.2 0.2 Capital Turnover 1.2 1.2 1.5 1.7 1.7

+

+

x

Operating Exp. = Operating Revenue Margin 23.2% -1.3% 23.4% -1.1% 23.7% -1.2% 23.3% -0.5% 23.4% -0.3% Other Assets = Capital Revenue Turnover 0.6 1.2 0.5 1.2 0.4 1.5 0.4 1.7 0.4 1.7 = After-tax Return Cash Tax Rate on Inv. Capital 16.5% -0.3% 14.8% -0.2% 15.5% -0.3% 16.2% -0.1% 16.7% -0.1%

Source: KGI Research

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

5

Thailand

C.P. All

C.P. All – Recommendation & target price history Date 15-Aug-17 9-Dec-17 28-Feb-18

95 90

85

Rating Outperform Outperform Outperform

Target 77.00 86.00 92.00

Price 61.75 74.50 83.25

80 75 70 65

60 55 Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Share price

Dec-17

Jan-18

Feb-18

Target price lowered

Mar-18

Apr-18

May-18

Jun-18

Jul-18

Target price raised

Source: KGI Research

July 10, 2018

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

6

Thailand

Corporate Governance

Corporate Governance Report of Thai Listed Companies Companies with Excellent CG Scoring Stock

Company name

Stock

Company name

Stock

Company name

EGCO KBANK KKP

ELECTRICITY GENERATING

KTB RATCH SCB

KRUNG THAI BANK

TISCO

TISCO FINANCIAL GROUP

Stock

Company name

Stock

Company name

Stock

Company name

ADVANC AOT AP BBL BH BIGC CK CPALL CPN DRT

ADVANCED INFO SERVICE

ERW GFPT IFEC LPN MINT PS QH ROBINS RS SAMART

THE ERAWAN GROUP

SCC SPALI STEC SVI TASCO TCAP TMB TRUE

THE SIAM CEMENT

KASIKORNBANK KIATNAKIN BANK

RATCHABURI ELECTRICITY GENERATING HOLDING THE SIAM COMMERCIAL BANK

Companies with Very Good CG Scoring

AIRPORTS OF THAILAND ASIAN PROPERTY DEVELOPMENT BANGKOK BANK BUMRUNGRAD HOSPITAL BIG C SUPERCENTER CH. KARNCHANG CP ALL CENTRAL PATTANA DIAMOND ROOFING TILES

GFPT INTER FAR EAST ENGINEERING L.P.N. DEVELOPMENT MINOR INTERNATIONAL PRUKSA REAL ESTATE QUALITY HOUSES ROBINSON DEPARTMENT STORE

SUPALAI SINO-THAI ENGINEERING AND CONSTRUCTION SVI TIPCO ASPHALT THANACHART CAPITAL TMB BANK TRUE CORPORATION

RS SAMART CORPORATION

Companies with Good CG Scoring Stock

Company name

Stock

Company name

Stock

Company name

CENTEL DCC GL GLOW

CENTRAL PLAZA HOTEL

HMPRO ILINK KTC MAJOR

HOME PRODUCT CENTER

MAKRO MODERN TRT TVO

SIAM MAKRO

THAI VEGETABLE OIL

DYNASTY CERAMIC GROUP LEASE GLOW ENERGY

INTERLINK COMMUNICATION KRUNGTHAI CARD MAJOR CINEPLEX GROUP

MODERNFORM GROUP TIRATHAI

Companies classified Not in the three highest score groups Stock

Company name

Stock

Company name

Stock

Company name

AAV ANAN BA BCH BDMS BEM BJCHI CBG

ASIA AVIATION

CHG CKP DTAC GLOBAL GPSC GUNKUL LPH MTLS

CHULARAT HOSPITAL

NOK PACE SAWAD TMT TPCH WHA WORK

NOK AIRLINES

ANANDA DEVELOPMENT BANGKOK AIRWAYS BANGKOK CHAIN HOSPITAL BANGKOK DUSIT MEDICAL SERVICES BANGKOK EXPRESSWAY AND METRO BJC HEAVY INDUSTRIES CARABAO GROUP

CK POWER TOTAL ACCESS COMMUNICATION SIAM GLOBAL HOUSE GLOBAL POWER SYNERGY GUNKUL ENGINEERING LADPRAO GENERAL HOSPITAL

PACE DEVELOPMENT CORPORATION SRISAWAD POWER 1979 THAI METAL TRADE TPC POWER HOLDING WHA CORPORATION WORKPOINT ENTERTAINMENT

MUANGTHAI LEASING

Source: www.thai-iod.com Disclaimer: The disclosure of the survey result of the Thai Institute of Directors Association ("IOD") regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an assessment of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that date or when there is any change to the relevant information. Nevertheless, KGI Securities (Thailand) Public Company Limited (KGI) does not confirm, verify, or certify the accuracy and completeness of such survey result.

March 7, 2016

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

7

Thailand

Anti-corruption Progress

Anti-corruption Progress Indicator Level 5: Extended Stock CPN

Company name CENTRAL PATTANA

Stock SCC

Company name

Stock IFEC KBANK KKP KTB MINT SCB

Company name

Stock DTAC GFPT GL GLOW GPSC HMPRO KTC LPN MAKRO MODERN NOK

Company name

Stock GUNKUL ILINK MTLS

Company name

Stock RS

Company name

Stock CPALL LPH

Company name

Stock

Company name

Stock SVI TCAP TISCO TMB

Company name

Stock PACE PS RATCH ROBINS SAMART SPALI STEC TASCO TMT TPCH WHA

Company name

Stock QH TRT TVO

Company name

THE SIAM CEMENT

Level 4: Certified Stock ADVANC BBL DCC DRT EGCO ERW

Company name ADVANCED INFO SERVICE BANGKOK BANK DYNASTY CERAMIC DIAMOND ROOFING TILES ELECTRICITY GENERATING THE ERAWAN GROUP

INTER FAR EAST ENGINEERING KASIKORNBANK KIATNAKIN BANK KRUNG THAI BANK

SVI THANACHART CAPITAL TISCO FINANCIAL GROUP TMB BANK

MINOR INTERNATIONAL THE SIAM COMMERCIAL BANK

Level 3: Established Stock AAV ANAN AP BA BDMS BIGC BJCHI CENTEL CHG CK CKP

Company name ASIA AVIATION ANANDA DEVELOPMENT ASIAN PROPERTY DEVELOPMENT BANGKOK AIRWAYS BANGKOK DUSIT MEDICAL SERVICES BIG C SUPERCENTER BJC HEAVY INDUSTRIES CENTRAL PLAZA HOTEL CHULARAT HOSPITAL CH. KARNCHANG CK POWER

TOTAL ACCESS COMMUNICATION GFPT GROUP LEASE GLOW ENERGY GLOBAL POWER SYNERGY HOME PRODUCT CENTER KRUNGTHAI CARD L.P.N. DEVELOPMENT SIAM MAKRO MODERNFORM GROUP NOK AIRLINES

PACE DEVELOPMENT CORPORATION PRUKSA REAL ESTATE RATCHABURI ELECTRICITY GENERATING HOLDING ROBINSON DEPARTMENT STORE SAMART CORPORATION SUPALAI SINO-THAI ENGINEERING AND CONSTRUCTION TIPCO ASPHALT THAI METAL TRADE TPC POWER HOLDING NOK AIRLINES

Level 2: Declared Stock AOT BH GLOBAL TRUE

Company name AIRPORTS OF THAILAND BUMRUNGRAD HOSPITAL SIAM GLOBAL HOUSE

GUNKUL ENGINEERING INTERLINK COMMUNICATION MUANGTHAI LEASING

QUALITY HOUSES TIRATHAI THAI VEGETABLE OIL

Level 1: Committed Stock CBG MAJOR

Company name CARABAO GROUP

RS

Stock Company name SAWAD SRISAWAD POWER 1979

MAJOR CINEPLEX GROUP

No progress Stock BCH BEM

Company name BANGKOK CHAIN HOSPITAL BANGKOK EXPRESSWAY AND METRO

CP ALL

Stock WORK

Company name WORKPOINT ENTERTAINMENT

LADPRAO GENERAL HOSPITAL

Source: www.cgthailand.org Disclaimer: The disclosure of the Anti-Corruption Progress Indicators of a listed company on the Stock Exchange of Thailand, which is assessed by the relevant institution as disclosed by the Office of the Securities and Exchange Commission, is made in order to comply with the policy and sustainable development plan for the listed companies. The relevant institution made this assessment based on the information received from the listed company, as stipulated in the form for the assessment of Anti-corruption which refers to the Annual Registration Statement (Form 56-1), Annual Report (Form 56-2), or other relevant documents or reports of such listed company . The assessment result is therefore made from the perspective of a third party. It is not an assessment of operation and is not based on any inside information. Since this assessment is only the assessment result as of the date appearing in the assessment result, it may be changed after that date or when there is any change to the relevant information. Nevertheless, KGI Securities (Thailand) Public Company Limited (KGI) does not confirm, verify, or certify the accuracy and completeness of the assessment result.

July 10, 2018

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

8

Thailand

KGI Locations

China

Contact

Shanghai Room 1507, Park Place, 1601 Nanjing West Road, Jingan District, Shanghai, PRC 200040 Room 24D1, 24/F, A Unit, Zhen Ye Building, 2014 Bao’annan Road,

Shenzhen

Shenzhen, PRC 518008

Taiwan

Taipei

700 Mingshui Road, Taipei, Taiwan Telephone 886.2.2181.8888 ‧

Hong Kong

41/F Central Plaza, 18 Harbour Road, Wanchai, Hong Kong Telephone 852.2878.6888

Thailand

Facsimile 886.2.8501.1691

Bangkok

Facsimile 852.2878.6800

8th - 11th floors, Asia Centre Building 173 South Sathorn Road, Bangkok 10120, Thailand Telephone 66.2658.8888

Singapore

Facsimile 66.2658.8014

4 Shenton Way #13-01 SGX Centre 2 Singapore 068807 Telephone 65.6202.1188 Facsimile 65.6534.4826

KGI's Ratings

Rating

Definition

Outperform (OP)

The stock's excess return over the next twelve months is ranked in the top 40% of KGI's coverage universe in the related market (e.g. Taiwan)..

Neutral (N)

The stock's excess return over the next twelve months is ranked in the range between the top 40% and the bottom 40% of KGI's coverage universe in the related market (e.g. Taiwan)

Under perform (U)

The stock's excess return over the next twelve months is ranked in the bottom 40% of KGI's coverage universe in the related market (e.g. Taiwan).

Not Rated (NR)

The stock is not rated by KGI.

Restricted (R)

KGI policy and/or applicable law regulations preclude certain types of communications, including an investment recommendation, during the course of KGI's engagement in an investment banking transaction and in certain other circumstances.

Excess return = 12M target price/current priceNote

Disclaimer

July 10, 2018

When an analyst publishes a new report on a covered stock, we rank the stock's excess return with those of other stocks in KGI's coverage universe in the related market. We will assign a rating based on its ranking. If an analyst does not publish a new report on a covered stock, its rating will not be changed automatically.

KGI Securities (Thailand) Plc. ( “The Company” ) disclaims all warranties with regards to all information contained herein. In no event shall the Company be liable for any direct, indirect or any damages whatsoever resulting from loss of income or profits, arising by utilization and reliance on the information herein. All information hereunder does not constitute a solicitation to buy or sell any securities but constitutes our sole judgment as of this date and are subject to change without notice.

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

9