Srinanaporn Marketing Public Company Limited (SNNP) closed 13.04% higher or an increase of ฿1.20/share to ฿10.40/share on its first trading day, with a trading value of 4,866 million baht.
Maybank Kim Eng Securities (MBKET) stated that SNNP has a wide range of products and a strong brand. The solid operation is supported by its own manufacturing facilities, coupled with an extensive distribution network that enables highly efficient supply chain management. The company is in an industry that has a tendency to grow both domestically and internationally. Expansion of production bases to Cambodia and Vietnam will drive significant growth. MBKET forecast a 5-year CAGR of EPS at 41%. The equity value is estimated at 12.96 billion baht or 13.50 baht/share. This is due to SNNP tends to deliver higher earnings growth and resilient performance supported by its diversified product portfolio.
MBKET estimates the 5-year CAGR of EPS at 41% driven by an increase in domestic sales from Bento, Jele and Lotus products, coupled with strong overseas growth potential from production bases in Cambodia and Vietnam as the markets with good growth potential. The gross margin is likely to increase from rising proportion of overseas sales, higher sales through traditional trade and launching new products. Adjusting strategy of the existing products would also enhance gross margins. SNNP will benefit from cost savings from the expansion of production bases in Cambodia and Vietnam, together with better economies of scale, resulting in a decrease in the SG&A-to-sales ratio.