Nine analysts agree on a “BUY” rating for Siam Global House Plc. (SET: GLOBAL), citing the company’s consistent growth in Same Store Sales Growth (SSSG) since 4Q21, as well as its benefit from stimulus packages to boost spending.
In 2021, GLOBAL reported a net profit of THB3,343 million, increasing 70.94% from a net profit of THB1,955 million in 2020, as a result of adjusting operations strategy to be in accordance with economic conditions still be affected by COVID-19 pandemic and changing customer behavior in New Normal Style.
Meanwhile, in 4Q21, GLOBAL’s earnings rose 13% QoQ and 98% YoY to THB746 million. Gross margins rose 363 bps YoY to 25.5%. This was driven by a higher proportion of house-brand products and price adjustment, coupled with better price negotiation with suppliers.
Maybank Securities (Thailand) (MST) said that GLOBAL’s 4Q21 earnings were better-than-expected thanks to higher gross margins. This year’s earnings should continue growing. Sales will be driven from higher SSSG and store expansion. Product prices adjustment and higher proportion of house-brand products should partly offset the decline in steel prices. Profits from overseas retail business tend to continue rising and will enhance the long-term growth.
SSSG in January remained positive by about 10%, with best sellers in the building materials, renovating and decorating category. This year, GLOBAL will speed up its store expansion by opening 7-8 stores, (+10% YoY) from 75 stores in 2021. The proportion of house-brand products should increase to 23% from 21-22% in 2021. The company has gradually increased product prices, aligning with higher product costs since the previous year. The impact from weakening steel prices should be mitigated by these factors and better operational efficiency. MST expects gross margin to be stable this year.
MST also stated that the acquisition of Indonesia’s leading retailer of building materials and decorative products, Caturkarda Depo Bangunan Tok (CKDB), through a joint venture between GLOBAL and The Siam Cement Plc. (SET: SCC), is key to establishing a foothold in the ASEAN market for GLOBAL.
At 16.12 hrs. local time in Thailand, the share price of GLOBAL rose THB0.40/share or 1.92% to THB21.20/share, with a trading value of THB659 million.
| Analysts | Recommendation | Target Price |
| Thanachart Securities | BUY | THB30.00 |
| KTBST Securities | BUY | THB28.00 |
| Capital Nomura Securities | BUY | THB28.00 |
| Maybank Securities (Thailand) | BUY | THB27.50 |
| Finansia Syrus Securities | BUY | THB27.50 |
| Country Group Securities | BUY | THB25.00 |
| Kasikorn Securities | BUY | THB24.80 |
| CGS-CIMB Securities (Thailand) | BUY | THB24.50 |
| TISCO Securities | BUY | THB23.20 |
