COMPANY UPDATE

Thailand

Thai Wah PCL (TWPC.BK/TWPC TB) 2Q18 earnings preview: ฝันร้ ายก่ อนคริสต์ มาส

Neutral‧Maintained Price as of 10 Jul 2018

9.25

12M target price (Bt/shr)

9.30

Unchanged/Revised up(down)(%)

Unchanged

Upside/downside (%)

0.5

Key messages

TWPC จะได้อานิ สงส์ จากการที่ตุนสต็อกไว้ในช่ วง 1Q61 จากการที่ ร าคาแป้ ง มั น ส าปะหลั ง เพิ่ ม ขึ้ น 26% จาก US$435/mt ในเดื อ นมกราคม 2561 มาที่ US$550/mtใน เดือนพฤษภาคม2561 แต่อย่างไรก็ตามปั ญหาการขาดแคลน หัวมันสาปะหลังที่รุนแรงเกิ นทาให้ปริ มาณยอดขายลดลง 2Q61 ดังนั้น เราจึงคาดว่ากาไรสุ ทธิ ของTWPC ใน2Q61 จะ อยูท่ ี่ 53 ล้านบาท (-49%YoY และ -4% QoQ) ถึงแม้เราจะ คาดว่าผลการดาเนิ นงานจะดี ข้ ึนใน 2H61 จากการเข้าสู่ ฤดู เก็บเกี่ยวในเดือนกันยายน-ตุลาคม แต่เราคาดว่าราคาหุ ้นจะ ยังคงถูกกดดันในระยะสั้นเนื่องจาก i) ผลประกอบการที่คาด ว่าจะอ่อนแอใน 2Q61 และ ii) นักวิเคราะห์ในตลาด (รวมถึง เราด้ว ย) น่ า จะปรั บ ลดประมาณการก าไรลง เรามองว่ า จัง หวะที่ ดี ที่จะกลับเข้า มาสนใจหุ ้น ตัว นี้ หลังจากที่ บริ ษัท ประกาศงบ2Q61 แล้วและนักวิเคราะห์ในตลาดพากันปรั บ ลดประมาณการก าไรลงเรายัง คงค าแนะน า "ถื อ " ราคา เป้าหมายปี 2561 ที9่ .30 บาท Trading data Mkt cap (Btbn/US$mn) Outstanding share (mn) Foreign ownership (mn) 3M avg. daily trading (mn) 52-week trading range (Bt) Performance (%) Absolute Relative

3M -15.9 -9.8

Quarterly EPS EPS Q1 2015 2016 2017 2018

n.a. 0.18 0.15 0.06

8.1/204 880 390 1 9.1 - 12.7 6M 12M -0.5 -3.1 9.1 -7.4

Q2

Q3

Q4

n.a. 0.12 0.12

n.a. 0.21 0.12

0.00 0.24 0.16

Event เราคาดกาไรสุ ทธิ ของ TWPC ใน 2Q61 จะอยูท่ ี่ 53 ล้านบาท (-49%YoY และ -4% QoQ) เนื่ องจากเป็ น ช่วง low season ส่งผลให้กาไรสุ ทธิใน 1H61 อยูท่ ี่ 108 ล้านบาท คิดเป็ น 22% ของประมาณการกาไรปี นี้ ทั้งปี ของเรา lmpact ถึงแม้ ราคาขายเฉลีย่ จะปรับตัวสู งขึน้ แต่ ปริมาณยอดขายที่ต่าก็ฉุดให้ ยอดขายลดลง 17%QoQ เนื่องจาก TWPC เก็บสต็อกไว้เยอะในไตรมาสแรก จึงได้อานิ สงส์จากการที่ราคา tapioca เพิ่มขึ้นถึ ง 26% จาก US$435/mtในเดือนมกราคม 2561 มาเป็ น US$550/mtในเดือนพฤษภาคม 2561 แต่อย่างไรก็ตาม ปั ญหาการขาดแคลนมันสาปะหลังที่รุนแรงเกิ นคาดอาจจะทาให้ปริ มาณยอดขายลดลงอย่างมาก ซึ่ งเมื่อ ถัวกันแล้ว เราคาดว่ายอดขายใน 2Q61 จะเพิ่มขึ้น 4% YoY แต่ลดลง 17% QoQเป็ น 1.5 พันล้านบาท Spread เพิม่ ขึน้ จากต้ นทุนสต็อกที่ต่าหนุนให้ อตั รากาไรขั้นต้ นเพิม่ ขึน้ 1% เรามองว่าอัตรากาไรขั้นต้นมี แนวโน้มดี ข้ ึนจาก spread ที่กว้างขึ้นระหว่างราคาหัวมันสาปะหลัง และ ราคาแป้งมันสาปะหลัง เนื่ องจากต้นทุนสต็อกที่ต่า ดังนั้น เราจึงคาดว่าอัตรากาไรขั้นต้นจึงน่ าจะเพิ่มขึ้น เล็กน้อยเป็ น 18.7% จาก 17.7% ใน 1Q61 แต่ยงั ต่ากว่า 24.1% ใน 2Q60 คาดว่ ากาไรจะต่าสุ ดใน 2Q61 และขยับสู งขึน้ ใน 2H61 เราคาดว่าราคาหุ้นจะยังคงถู กกดดันในระยะสั้นเนื่ องจาก ผลประกอบการที่คาดว่าจะอ่อนแอใน 2Q61 และ การปรับประมาณการกาไรลงของนักวิเคราะห์ในตลาด (รวมถึ งเราด้วย) (Bloomberg consensus อยู่ ที่ 562 ล้า นบาท และ ประมาณการของเราอยู่ที่ 492 ล้า นบาท) แต่ อ ย่า งไรก็ ตาม เรามองว่า ผลการ ดาเนินงานน่าจะดีข้ ึนใน 2H61 เนื่องจาก i) เริ่ มเข้าสู่ ฤดูเก็บเกี่ยว (ช่วงเดือนกันยายน-ตุลาคม) ซึ่ งจะทาให้ อุ ป ทานหั ว มัน ส าปะหลัง เพิ่ ม ขึ้ น หลัง จากที่ ส านัก งานเศรษฐกิ จ การเกษตรพยากรณ์ ว่ า ผลผลิ ต มัน สาปะหลังจะเพิ่มขึ้น 7% จาก 27 ล้านตันในปี ที่แล้ว (กันยายน 2560) เป็ น 29.1 ล้านตันในปี นี้ (กันยายน 2561) และ ii) ราคาแป้ งมันส าปะหลังที่ เ พิ่มขึ้ น YoY (2H60 อยู่ที่ US$370/mtและปั จจุ บ นั อยู่ที่ US$500/mt) ดังนั้น เราจึงคาดว่าผลประกอบการใน 2Q61 จะต่าสุ ดในรอบปี นี้ และคาดว่าจะฟื้ นตัวขึ้น ในปลาย 3Q61 และ 4Q61 Valuation & Action ถึงแม้ว่าการที่บริ ษทั เร่ งตุนสต็อกในช่ วง low season ที่ตน้ ทุนต่าใน1Q61 จะส่ งผลดี ใน 2Q61 แต่ผล ประกอบการก็ยงั อ่อนแออยู่ดี ดังนั้น เราจึงแนะนาให้หลี กเลี่ ยงการลงทุนในช่ วงนี้ ไปก่อน และมองว่า จังหวะที่ดีที่จะกลับเข้ามาสนใจหุ ้นตัวนี้ คือหลังจากที่บริ ษทั ประกาศงบ 2Q61 แล้ว และนักวิเคราะห์ใน ตลาดพากันปรับลดประมาณการกาไรลง เรายังคงคาแนะนา "ถือ" ราคาเป้ าหมายปี 2561 ที่ 9.30 บาท อิง จาก PER ที่ 16.5 (ค่าเฉลี่ยกลุ่มอาหาร +1.0 S.D.) Risks ราคาวัตถุดิบผันผวน, ขาดแคลนมันสาปะหลัง, เงินบาทแข็งค่า และช่วง low season ใน 2Q-3Q

Share price chart 13

40

12

30

Key financials and valuations

20

11

10 10 0

9

(10)

8

(20)

7

(30) Jul-17

Sep-17

Nov-17

Share Price

Feb-18

Source: SET

Chananthorn Pichayapanupat 66.2658.8888 Ext.8849 [email protected]

Apr-18

Price performance relative to SET

Jul-18

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

Dec - 16A 6,163 1,563 800 669 669 0.76 0.76 0.30 726.5 726.5 12.3 1.5 6.6 (21.5) 3.2 12.5

Dec - 17A 6,265 1,383 938 493 375 0.56 0.43 0.32 (26.3) (44.0) 16.6 1.4 9.4 (21.3) 3.4 8.3

Dec - 18F 8,121 1,601 1,093 492 492 0.56 0.56 0.34 (0.1) 31.5 16.5 1.3 7.4 (11.2) 3.6 8.1

Dec - 19F 8,693 1,765 1,157 572 572 0.65 0.65 0.39 16.2 16.2 14.2 1.3 6.7 (4.8) 4.2 9.0

Dec - 20F 9,398 1,982 1,237 680 680 0.77 0.77 0.46 18.9 18.9 12.0 1.2 5.8 (2.3) 5.0 10.3

Source: KGI Research

July 11, 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

THAI WAH PCL

Figure 1: 2Q18 earnings preview Btmn Revenue Gross Profit SG&A Operating Profit Operating EBITDA Non-Op Inc./(Exp) Net profit Normalized profit EPS(Bt) Normalized EPS(Bt) Percent Gross margin EBIT margin SG&A/sales

2Q18F 1,509 283 226 68 68 0 53 53 0.06 0.06 2Q18F 18.7 4.5 15.0

2Q17 1,449 349 214 153 153 0 104 104 0.12 0.12 2Q17 24.1 10.6 14.8

YoY (%) 4.1 (19.1) 5.7 (55.5) (55.5) 0.0 (49.0) (49.2) (49.0) (49.2) YoY (ppts) (5.4) (6.1) 0.2

1Q18 1,823 323 240 97 97 (17) 55 72.6 0.06 0.08 1Q18 17.7 5.3 13.2

QoQ (%) (17.2) (12.4) (5.7) (29.8) (29.8) (101.1) (3.5) (27.0) (3.5) (27.0) YoY (ppts) 1.0 (0.8) 1.8

1H18 3,332 605 466 165 165 (17) 108 126 0.12 0.14 1H18 18.2 5.0 14.0

1H17 2,868 730 435 333 333 0 239 239 0.27 0.27 1H17 25.5 11.6 15.2

YoY (%) 16.2 (17.1) 7.1 (50.4) (50.4) 0.0 (54.6) (47.4) (54.6) (47.4) YoY (ppts) (7.3) (6.7) (1.2)

Source: Company data, KGI Research

Figure 2: Tapioca starch price continue increase

Figure 3: Spread recovery Bt/ton

Source: Thai Tapioca starch association,

July 11, 2018

KGI Research

Jun-18

Apr-18

May-18

Mar-18

Jan-18

Feb-18

Dec-17

Oct-17

Nov-17

Sep-17

Jul-17

Aug-17

Jun-17

May-18

Jan-18

Mar-18

Nov-17

Jul-17

Sep-17

May-17

Jan-17

Mar-17

Export

Apr-17

Domestic

Nov-16

Jul-16

Sep-16

May-16

Jan-16

Mar-16

Nov-15

Jul-15

Sep-15

May-15

Jan-15

Mar-15

0

May-17

100

8.0

Mar-17

200

10.0

Jan-17

300

12.0

Feb-17

400

14.0

Dec-16

16.0

5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

Oct-16

500

Nov-16

18.0

Sep-16

600

Jul-16

20.0

Aug-16

Domestic price, Bt/kg (LHS); Export price, US$/mt (RHS)

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

2

Thailand

THAI WAH PCL

Figure 4: Company profile

Figure 5: Core profit to grow

Thai Wah Public Company Limited (TWPC) is a merged company

Normalized earnings, Btmn (LHS); gross margin, percent (RHS) 800

between Thai Wah Starch Public Company Limited (TWS) and Thai Wah Food Products Public Company Limited (TWFP). The

products

available

both

domestically

(33%)

20.0

500 400

products as well as food products such as vermicelli, noodles and Its

25.0

600

company operates a production and distribution of tapioca starch

sago.

30.0

700

15.0

300

and

10.0

200 5.0

100

internationally (67%).

-

0.0

2016

2017

2018F

Source: Company data

Source: Company data, KGI Research

Figure 6: Consistency dividend payment

Figure 7: Cash per share

DPS, Bt/share (LHS);Dividend yield, percent (RHS)

2019F

2020F

Bt

0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00

6.0 1.2

5.0

1.1

4.0

0.9

0.9

0.9

3.0

0.6

2.0

1.0

0.4

0.4

4Q16

1Q17

0.5

0.0

2016

2017

2018F DPS

2019F

2020F 1Q16

Yield

2Q16

3Q16

Source: Company data, KGI Research

Source: Company data, KGI Research

Figure 8: Sales breakdown by business

Figure 9: PER sector food

percent

PER, times

2Q17

3Q17

4Q17

1Q18

20.0

Food 19.8

+2.0 sd = 17.2x +1.0 sd = 16.1x

Average = 15.0x

15.0

47.7

Native High Value added

-1.0 sd = 13.8x 32.5

-2.0 sd = 12.7x 10.0 Oct-15

Nov-16

Source: Company data, KGI Research

Source: Company data, KGI Research

Figure 10: Company’s PER

Figure 11: Company’s PBV

PER, times

PBV, times

80.0

Dec-17

2.0

60.0

+2.0 sd = 1.7x

+2.0 sd = 51.2x

+1.0 sd = 1.5x

+1.0 sd = 35.3x

40.0

1.5

Average = 19.5x

Average = 1.4x

20.0 -1.0 sd = 3.6x

0.0

-1.0 sd = 1.2x

1.0

-2.0 sd = -12.2x

-2.0 sd = 1.0x

(20.0) (40.0) 2015

Source: KGI Research

July 11, 2018

0.5

2016

2017

2018F

2019F

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

THAI WAH PCL

Quarterly Income Statement Income Stetement (Bt mn) Revenue Cost of Goods Sold Gross Profit Operating Expense Other incomes Operating Profit Depreciation of fixed asset Operating EBITDA Non-Operating Income Interest Income Other Non-op Income Non-Operating Expense Interest Expense Other Non-op Expense 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-17A

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 n.a. n.a.

0 0 n.a. n.a.

0 0 n.a. n.a.

0 0 n.a. n.a.

1,527 (1,137) 390 (191) 20 218 0 218 0 0 0 (2) (2) 0 7 224 (42) 19 0 163 163 0.18 0.18

1,334 (1,045) 289 (162) 21 148 0 148 0 0 0 (2) (2) 0 3 149 (28) 14 0 107 107 0.12 0.12

1,519 (1,120) 399 (189) 40 249 0 249 0 0 0 (2) (2) 0 3 250 (43) 23 0 185 185 0.21 0.21

1,784 (1,299) 485 (258) 62 290 0 290 0 0 0 (2) (2) 0 2 290 (54) 21 0 215 215 0.24 0.24

1,418 (1,038) 381 (221) 20 180 0 180 0 0 0 (3) (3) 0 3 181 (32) 14 0 135 135 0.15 0.15

1,449 (1,100) 349 (214) 18 153 0 153 0 0 0 (3) (3) 0 0 150 (29) 17 0 104 104 0.12 0.12

1,476 (1,140) 337 (217) 35 155 0 155 0 0 0 (2) (2) 0 1 154 (32) 13 0 109 109 0.12 0.12

1,921 (1,605) 317 (286) 15 46 0 46 0 0 0 (0) (0) 0 (1) 44 (14) 4 118 145 27 0.16 0.03

1,823 (1,500) 323 (240) 14 97 0 97 0 0 0 (2) (2) 0 (1) 95 (22) (0) (17) 55 73 0.06 0.08

n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a.

25.5 14.3 14.3 10.7

21.7 11.1 11.1 8.0

26.3 16.4 16.4 12.2

27.2 16.2 16.2 12.1

26.9 12.7 12.7 9.5

24.1 10.6 10.6 7.2

22.8 10.5 10.5 7.4

16.5 2.4 2.4 7.6

17.7 5.3 5.3 3.0

n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a. n.a.

(12.6) (32.1) (32.1) (34.4) (34.4)

13.9 68.2 68.2 72.9 72.9

17.4 16.1 16.1 16.4 16.4

(20.5) (37.9) (37.9) (37.4) (37.4)

2.2 (14.9) (14.9) (22.5) (22.5)

1.9 1.2 1.2 4.2 4.2

30.1 (70.4) (70.4) 33.6 (75.4)

(5.1) 111.3 111.3 (62.0) 171.0

Source: KGI Research

July 11, 2018

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

Please see back page for disclaimer

4

Thailand

THAI WAH PCL

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

Profit & Loss 2016 6,403 2,797 1,327 704 656 111 3,606 941 2,007 657 1,058 750 455 141 155 308 0 308 5,345 880 1,066 3,157 0

2017 7,116 3,148 1,448 840 740 120 3,968 679 2,561 728 1,210 808 530 156 123 402 0 402 5,906 880 1,066 3,453 0

2018F 7,540 3,062 843 1,072 1,001 146 4,478 540 3,205 733 1,437 1,034 715 156 163 403 0 403 6,103 880 1,066 3,650 0

2019F 7,848 2,830 464 1,139 1,072 156 5,018 499 3,785 734 1,516 1,090 759 156 174 427 0 427 6,332 880 1,066 3,879 0

2020F 8,218 2,863 317 1,219 1,159 169 5,355 313 4,306 736 1,614 1,157 813 156 188 457 0 457 6,604 880 1,066 4,151 0

Year to Dec 31 (Btmn) 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 Expense Interest Expense Other Non-op Expense Equity Income/(Loss) Pretax Profit Current Taxation Minorities Extraordinaries 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 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 Source: KGI Research

July 11, 2018

2016

2017

2018F

2019F

2020F

342.0 652.4 584.1 726.5 726.5 726.5 726.5

1.7 (41.1) (31.5) (26.3) (44.0) (26.3) (44.0)

29.6 17.9 37.9 (0.1) 31.5 (0.1) 31.5

7.0 16.3 16.7 16.2 16.2 16.2 16.2

8.1 19.1 17.0 18.9 18.9 18.9 18.9

25.4 14.7 17.3 10.9 10.4 12.5

22.1 8.5 11.6 7.9 6.9 8.3

19.7 7.8 12.4 6.1 6.5 8.1

20.3 8.4 13.5 6.6 7.3 9.0

21.1 9.3 14.6 7.2 8.3 10.3

0.2 (0.2) 107.8 6.2 85.2 4.9 3.7 2.8 (1,151)

0.2 (0.2) 65.0 3.3 70.9 3.6 3.9 2.9 (1,255)

0.2 (0.1) 300.8 4.1 271.2 3.7 3.0 1.9 (681)

0.2 (0.0) 501.5 4.8 616.2 5.9 2.6 1.6 (302)

0.2 (0.0) 3776.1 5.7 4547.5 6.9 2.5 1.4 (154)

0.8 0.8 0.8 6.1 7.0 1.2 0.3

0.6 0.4 0.7 6.7 7.1 0.8 0.3

0.6 0.6 0.7 6.9 9.2 1.1 0.3

0.6 0.6 1.1 7.2 9.9 1.3 0.4

0.8 0.8 1.2 7.5 10.7 1.6 0.5

1.0 39 56 36 59

0.9 43 63 40 66

1.1 45 60 40 65

1.1 45 60 40 65

1.1 45 60 40 65

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 6,163 (4,600) 1,563 (800) 142 906 (144) 1,066 0 0 0 (9) (9) 0 16 913 (167) 77 0 669 669 0.76 0.76

2017 6,265 (4,882) 1,383 (938) 88 534 (193) 730 0 0 0 (8) (8) 0 3 529 (106) 48 0 493 375 0.56 0.43

2018F 8,121 (6,520) 1,601 (1,093) 122 629 (356) 1,006 0 0 0 (2) (2) 0 21 648 (130) 26 0 492 492 0.56 0.56

2019F 8,693 (6,928) 1,765 (1,157) 124 732 (421) 1,175 0 0 0 (2) (2) 0 22 753 (151) 30 0 572 572 0.65 0.65

2020F 9,398 (7,416) 1,982 (1,237) 127 872 (478) 1,374 0 0 0 (0) (0) 0 24 895 (179) 36 0 680 680 0.77 0.77

2016 728 669 144 (85)

2017 586 493 193 (99)

2018F 586 492 356 (263)

2019F 927 572 421 (66)

2020F 1,078 680 478 (80)

(1,448) (407) (1,041) 0 (720) (183) 0 62 (245) 315

(163) (747) 583 0 423 88 0 20 68 827

(379) (1,000) 621 0 207 (330) 0 (34) (295) 704

(861) (1,000) 139 0 65 (347) 0 (4) (343) 423

(959) (1,000) 41 0 120 (412) 0 (4) (408) 130

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 Operating Exp. Operating Depreciation + + = Revenue Revenue Margin Revenue 74.6% 2.3% 15.3% 7.7% 77.9% 3.1% 16.4% 2.6% 80.3% 4.4% 15.0% 0.4% 79.7% 4.8% 14.7% 0.7% 78.9% 5.1% 14.5% 1.5% Working Capital Other Assets Capital Net PPE 1/ + + = Revenue Revenue Turnover Revenue (0.0) 0.3 0.7 1.0 (0.0) 0.4 0.7 0.9 (0.0) 0.4 0.5 1.1 (0.0) 0.4 0.5 1.1 (0.0) 0.5 0.4 1.2 Operating Cash After-tax Return Capital x x = Margin Tax Rate on Inv. Capital Turnover 7.7% 18.3% 1.4% 1.0 2.6% 20.1% 0.5% 0.9 0.4% 20.0% 0.1% 1.1 0.7% 20.0% 0.2% 1.1 1.5% 20.0% 0.3% 1.2

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

THAI WAH PCL

Thai Wah– Recommendation & target price history Date 15-May-18 26-Feb-18 13-Nov-17 13-Jul-17

13

12 11

Rating Neutral Neutral Outperform Outperform

Target 9.30 10.10 10.50 11.50

Price 10.10 12.40 9.20 9.45

10 9

8 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 11, 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

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

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

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.

July 11, 2018

*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 11, 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

ChinaShanghai

Contact

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

TaiwanTaipei

Shenzhen, PRC 518008 700 Mingshui Road, Taipei, Taiwan Telephone886.2.2181.8888 ‧

Hong Kong

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

ThailandBangkok

Facsimile886.2.8501.1691

Facsimile 852.2878.6800

8th - 11th floors, AsiaCentreBuilding 173 South Sathorn Road, Bangkok10120, 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 11, 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

Thai Wah PCL - Settrade

Jul 11, 2018 - Operating Profit. 68. 153. (55.5). 97. (29.8). 165. 333. (50.4). Operating EBITDA. 68. 153. (55.5). 97 ..... Operating Cash Flow. 728. 586. 586. 927.

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