IRC 2023, the sky after the rain, although the forecast has been adjusted downward

4Q22 profit reported at 32 million baht, growing 9.5% YoY and turning from a loss in 3Q22 as raw material costs start to decrease : 4Q22 profit (July-September 22) was reported at 32 million baht, in line with our expectation. Although revenue grew 10% QoQ and grew 22% YoY to 1.54 billion baht.

This is because car production in July-September 2022 rose 21% QoQ and grew 97% YoY to 540,327 units, while motorcycle production in July-September 2022 increased 27% QoQ and grew 34% YoY to 493,926 of units, bringing the total production of cars and motorcycles to 2,838,819 units, growing 14% YoY The gross margin improved from the previous quarter from 5.1% to 6.8% due to the cost of raw materials such as chemicals, synthetic rubber. and natural rubber Weakened in line with oil prices. The ratio of selling and administrative expenses to sales decreased by 1% compared to the previous quarter to 5.4% because most of the expenses were fixed expenses, but revenues grew faster The company reported a profit in 2022. on 110 million baht, contracting 68% YoY and 2% above our estimate.

– Car production in January – September 22 grew 13%YoY as chip shortages begin to subside : total car and motorcycle production in January – September 22 was 1,364,037 units and 1,474,782 units increased 13%YoY and grew 15 %YoY respectively, and car production in July-September 2022 was 540,327 units, growing 21% QoQ and growing 97% YoY as the chip shortage began to recede. While motorcycle production in July-September 2022 was 493,926 units, growing 27% QoQ and growing 34% YoY, with car and motorcycle production growing from increased export demand and shortages, chips began to unravel. according to the Federation of Thai Industries Increased car production in 2022 from 1.75 million cars to 1.80 million cars and expects around 1.9 million cars to be produced in 2023 as the chip shortage problem begins to resolve and car production for export increases.

– A reduction of the 2023 profit forecast by 20% from the previous estimate. because the cost of raw materials is expected to gradually decrease: the research department raised its forecast for total revenue in 2023 from 5.74 billion baht to 6.34 billion baht, an increase of 7% from 2022 due to the Federation of Thai Industries Increase in car production in 2022 by 3% from the previous estimate to 1.8 million units and expects car production in 2023 to return to normal at 1.9 million units, growing 6% as the chip shortage problem begins to resolve and gain support From car production for export, with revenue in 2023 growing higher than car production growth as the company gains market share in the automotive industry from partnering with Chinese and Thai car brands entering the market continuous cars However, our gross margin assumption was cut from 12.5% ​​to 9.5% (2022 GPM at 7.5% and 4Q22 GPM at 6.8%) Principles such as chemicals and synthetic rubber deterioration In addition, the company has acquired raw materials from other sources. Use an automated production system Including the management of leftover food (loss) is reduced. As a result, we cut our 2023 profit forecast from Bt275mn to Bt219mn, growing 99% YoY.

– Maintain “Hold” recommendation and reduce the appropriate price for 2023 to 16.00 baht: The research department evaluated the value according to the Price to Earnings Ratio (P/E Ratio) method based on the average P/E Ratio for the Last 3 years at 14.0 times, but 2023 earnings per share have been cut from 1.43 baht per share to 1.14 baht per share. The fair price for 2023 has been reduced from 18.30 baht per share to 16.00 baht per share .The expected profit in 2013 and 2014 is 5.5 IRC’s Strengths are 1) It has a D/E as low as 0.4 times as of September 2022 and 2) sufficient liquidity for business operations (about 1.34 billion baht in cash per month September 2022). below essentials. But we maintain our HOLD recommendation based on cost weights, which are expected to rise gradually in 2023.

risk factor

i) China and Taiwan wars affect supply chains
ii) Oil and feed prices continued to rise.
iii) The spread of emerging diseases such as monkeypox.


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