IRC 3Q65 Stories Large Uncooked Product Charge Loss, Downgrades FY22 & 66 Projections

A 3Q22 reduction of 13 million baht was reported, reversing from income in 2Q21 and 1Q22 due to significant uncooked substance prices. : Claimed a 3Q22 (Apr-Jun 65) loss of 13 million baht, which is worse than our expectations. Profits contracted 12% QoQ but grew 6%YoY to 1.4 billion baht.

This was since car or truck output in April-June 65 was down 19%QoQ but improved 3%YoY to 390,033 units, although motorbike creation in April-June 65 weakened. 9%QoQ and weakened 9%YoY to 445,217 units, ensuing in full creation of cars and bikes to 1,804,544 models, contracting 2.4% YoY Gross financial gain fell appreciably from 9.2% in the previous quarter to 5.1% owing to raw product expenditures better, Polymer and Carbon Black remained significant in line with oil prices. In addition, tensions among China and Taiwan led to increased uncooked content charges, specially Carbon Black. The SG&A/income ratio rose .4% qoq to 6.4%, as the cost of the primary expenses were fastened fees but revenues lowered. The enterprise claimed a financial gain of 9M65. of 78 million baht, contracting 75% YoY and accounting for 31% of the preceding projection of 247 million baht.

– Automobile production in January-June 65 grew 3%YoY, but the craze in July-September has a weaker development: full vehicle and motorcycle production in January-June September 22 was 870,111 units and 934,455 units , a expansion of 3%YoY, but contracted 7%YoY, respectively, and vehicle production in April-June 65 was at 390,033 models, a contraction of 19% QoQ but rising 3% YoY from a chip shortage issue In meanwhile, manufacturing of bikes in April-June 65 was 445,217 units, contracting 9% both of those QoQ and YoY Generation of automobiles and bikes in April-June 65 was weak due to chip and defect troubles. The dilemma is expected to continue right up until July-September 65. The Federation of Thai Industries and the IRC have cut creation for 65 vehicles from 1.85 million to 1.75 million models, and the chip shortage is expected to boost and commenced to unravel in October-December 65

– Revised our FY22 earnings forecast by 56% from the prior projection. Owing to significant mounted raw substance charges : The analysis department cuts the earnings forecast for year 65 from 5.65 billion baht to 5.46 billion baht, an boost of 2% from yr 64 due to the Federation of Thai Industries. It ideas to slice its 65-year car or truck manufacturing by 6% from the first estimate to 1.75 million models for the reason that of a lack of chips in auto assembly right after China stopped sending uncooked sand, a key raw material for chip producing, to Taiwan. At the very same time, we have downgraded our gross margin assumption from 11.5% to 8.% (9M65 GPM at 8.7% and 3Q65 GPM at 5.1%). Additionally, employing an automatic creation method to cope with the bare minimum wage that is set to maximize in Sep65, we have revised our FY22 earnings forecast from 247 million baht to 108 million baht, shrinking 68%YoY from 9M65 earnings. for 72% of the estimate.

– Revised FY23 earnings forecast by 22% from previous forecast : We maintain FY23 revenue forecast at Bt5.74bn, up 5% as we anticipate chip shortages to be resolved future calendar year if there is no war concerning China and Taiwan. We maintain our 2006 production forecast for automobiles and motorcycles at 1.91 million models and 1.94 million units. million automobiles respectively On the other hand, we have downgraded our gross income assumption from 13.5% to 12.5% ​​as we assume raw materials selling prices to slowly decrease in line with oil selling prices. We have revised down our forecast FY20 earnings from 340 to Bt275 million, down 19%. from the primary projection, but increasing by 154% from 12 months 65

– Keep “Keep” advice and alter the correct price tag in Year 20 at 18.60 baht : The Investigation Office has applied the proper price in year 66 since the firm’s economic statements are at the stop of the calendar year September 20, we evaluate’ r price making use of the Value to Earnings ratio Approach (P/E Ratio) based mostly on the typical P/E Ratio of the final 3 years at 13. situations, utilizing the modified earnings for each share of ’66 at 1.43 baht for every share, the proper price of ’66 at 18.30, and an improve from the ideal cost of ’66 at 17.30 baht for every share, with expected yields of 65 and 66 at 2.3% and 6.8%, respectively IRC Strengths is 1) D/E as minimal as .4x at June 65 and 2 ) Adequate liquidity in business enterprise operations (hard cash about 1.16 billion baht at June 65). Nonetheless, we manage our “Keep” score because of to charge pressures. And the chip shortage in 65 is a short-term aspect, with auto production in 66 returning to regular.

chance components

i) Sino-Taiwan War Has an effect on Supply Chains
ii) The selling price of oil and raw materials ongoing to rise.
iii) Epidemics of rising diseases these as monkeypox


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