Analyst Expects SCC’s 1Q21 Earnings of ฿13Bn, Recomm. “BUY” with TP of ฿450 

Analyst Expects SCC’s 1Q21 Earnings of ฿13Bn, Recomm. “BUY” with TP of ฿450 

Analyst expected SCC’s 1Q21 net profit of approx. 13 billion baht, a 82% growth YoY, driven by petrochemical business as product spreads and sales volume surged, recommeing “BUY” with a target price of ฿450.00/share.


Maybank Kim Eng (Maybank) expected The Siam Cement Public Company Limited (SCC) to report 1Q21 consolidated financial results on April 28, 2021, estimating 1Q21 earnings should stand out and reach 12.7 billion baht (+58% QoQ, +82% YoY), driven by 1) petrochemicals business with high demand in China and this region. SCC’s sales volume will increase to 470,000 tonnes (+22% QoQ, +12% YoY).


2) Good spreads: HDPE – Naphtha at USD591/tonne (0% QoQ, +48% YoY) and PP-Naphtha at USD795/tonne (+8% QoQ, +44% YoY), including spreads in PVC up to

USD608/tonne (+16% QoQ, +39% YoY) .In addition, By product—Benzene and Toluene also enjoy good spreads with a USD1.2b of stock gains and higher equity incomes. Maybank expected petrochemical profit in 1Q21 to reach 8 billion baht (+37% QoQ, +350%YoY).


3) Demand for cement and construction products in 1Q21 showed signs of improvement. Maybank expected marginal growth of 2%, plus cost optimisation. Therefore, earnings should improve to 2.82 billion baht, growing 1% YoY and turnaround from a 194 million baht loss in 4Q20. For integrated packaging business, it will receive positive results from M&A of Sovi and Go-Pak, to support continued earnings growth. Maybank expected earnings of 1.554 billion baht (+5% QoQ, -10% YoY), down from 2020 due to lower SCGP stake.


Overall, Maybank has given a “BUY” recommendation on SCC with a target price of ฿450.00/share on a forward P/E base + 0.5SD = 13.9x from ฿430.