Brokers are cheering for “buying” shares of Home Product Center Plc. (HMPRO). Strong business and well managed. High efficiency. In addition, the current Valuation is relatively cheap. while cash flow is strong The debt to equity ratio (D/E) is very low.
2Q21 net profit of 1.43 billion baht (+52%YoY, +5%QoQ), in line with market expectations, with SSSG (Same-store sales) positive above 10% from last year’s low base. Most of the HomePro branches were closed during the lockdown period. And this year, HomePro Super Expo is organized to help increase sales. While Mega Home has slightly higher SSSG than HomePro. HMPRO gross margin increased 139 bps YoY to 25.2%.
Even in 3Q21, earnings are expected to turn out to be bad. Due to the impact of the lockdown in 13 provinces, which is a dark red area that started on July 20, but it is viewed as a time to invest to wait for a recovery in the 4th quarter of the year when the epidemic situation is expected. Covid-19 will get better and mRNA vaccines are gradually coming in and it will be good in 65 as well.
HMPRO shares closed the morning at 13.20 baht, down 0.30 baht (-2.22%), while the SET index closed the morning up 2.17 points.
โบรกเกอร์ คำแนะนำ ราคาเป้าหมาย (บาท/หุ้น)
ฟินันเซีย ไซรัส ทยอยสะสม 18.50 (รอทบทวน)
โนมูระ พัฒนสิน ซื้อลงทุน 17.20
แลนด์แอนด์เฮ้าส์ ซื้อ 17.00
เมย์แบงก์ กิมเอ็ง ซื้อ 16.00
คันทรี่กรุ๊ป ซื้อ 15.60
Mr. Weerawat Wirotphoka, Director of Securities Analysis at Finansia Syrus Securities, said that HMPRO’s 2Q21 results were in line with expectations, but 3Q/Q results are expected. 64 will be the worst Same-store sales (SSSG) in July dropped 15-20%, however, expected to recover in 4Q21.
with anticipation of the COVID-19 situation Better in 4Q21 that there will be a gradual mRNA vaccine to be injected. including being able to return to open branches as usual Some of the HomePro branches are now closed since July 20 when the lockdown was announced.
However, this round of lockdown will affect the financial statements in 64 to be down, but in the year 65 the situation is expected to recover. By giving a target price for the year 65 at 18.50 baht, which is the target price before the lockdown may be revised downward.
Mr. Kornpat Worachet, Director of Research and Investment Services at Nomura Securities Pattanasin said that HMPRO’s 2Q21 financial statements came out in line with expectations. “With a target price of Bt17.20, although 3Q21 earnings are expected to decline due to store closures resulting from lockdown orders, the overall valuation is relatively cheap. Cash flow remains strong, debt to equity ratio is low (D/E) at 0.7x
However, Nomura Pattanasin has cut profits this year and next year by 9% and 4%, respectively, to 5,514 million baht in 64 and 6,897 million baht in 65.
As for Maybank Kim Eng Securities (Thailand) stated in the analysis that 2Q21 earnings: Net profit increased 5% QoQ and 52% YoY to Bt1,433mn, in line with expectations. SSSG 2Q21 was above 10% from a low base in the year. Before most of the HomePro stores were closed during the lockdown (-17% in Q2/20 and +0.6% in Q1/64), and this year’s HomePro Super Expo was held to help increase sales. While Mega Home has slightly higher SSSG than HomePro.
HMPRO’s gross margin increased 139 bps YoY to 25.2% due to operational efficiencies and low base last year with lockdown. which sells electrical products (Low margin) can be quite large. in terms of expenses The company was well regulated, accounting for 17.7% of sales, compared with 17.8-17.9% in 2Q20 and 1Q21.
The trend of earnings Earnings in 3Q21 are expected to slow down due to lockdowns in 13 provinces since July 20, causing HomePro to temporarily close 13-14 branches (out of a total of 86 branches, which account for 15% of HomePro stores). HomePro S 8 branches (from 9 branches) and Mega Home 2 branches (from 14 branches). However, the company still focuses on online sales, which is expected to In addition, the Malaysia branch’s earnings are expected to be affected by the lockdown. downs in malaysia as well
Nonetheless, we still recommend a Buy with a target price (DCF) of Bt16, considering that HMPRO still has a strong business base and has a strong presence. Management with high efficiency If the coronavirus outbreak subsides The operating results will recover and continue to grow with stability, as well as the government is expected to introduce more measures to stimulate consumption, while HMPRO is expected to increase the proportion of online sales and the proportion of product imports. Private Brands from China are recovering.
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