Robinson PCL (ROBINS): 3QFY17 profit likely to grow slightly q-q but strongly y-y October 30, 2017
3QFY17 profit up 5.1% q‐q and 23.8% y‐y: We forecast ROBINS will post a net profit of Bt631mn in 3QFY17, up 5.1% q‐q and 23.8% y‐y. The quarterly profit forecast is based on an expectation that even though 3QFY17 is the low season for the business due to rain, SSSG and GPM are likely to drop at lower levels than those in 2QFY17. ROBINS will also have no expenses from new store rollouts in this period. The y‐y profit rise is due to higher sales and space rental revenues driven by a higher number of branches. For 9MFY17, net profit is projected at Bt1,942mn, up 7.6% y‐y, representing 69.0% of the FY17profit estimates of Bt2,815mn.
More promising outlook for 4QFY17: 4Q outlook looks more optimistic as (i) ROBINS plans to add two new stores, one in Kamphaeng Phet, and the other in Mahachai, before year‐end to meet its 3‐store rollout target for FY17, (ii) 4Q marks the year‐end holiday shopping season, (iii) the consumer confidence index improved in the wake of the upward revision of 2017GDPgrowth,and(iv) the government may launch more stimulus spending measures at year‐end.
‘ACCUMULATE’ rating with FY18 target price of Bt79/share: We rate ‘ACCUMULATE’ on ROBINS shares with a target price ofBt79/share as we roll forward our valuation basis toFY18. The rating is based on views that the Thai economic recovery in 2018 will benefit ROBINS’ revenue and profit and the company also has strong customer base in the upcountry and solid financial health with interest‐bearing D/E of only 0.1x.