Motorcycle sales in Thailand
in January surged 47% yoy to 138,807 units, S.P. Honda
reported yesterday. Suzuki sales jumped 304% last month,
with the company winning a 16% share of the motorcycle
market versus 70% for Honda.
As a result of the
better-than-expected motorcycle sales and Suzuki’s rise in
market share, we have revised up our 2003 earnings forecast
for S.P. Suzuki (SPSU) by 16% to Bt274mn. We have also
lifted our fair value estimate to Bt20-23, indicating at
least 21% upside for the stock.
Although SPSU’s share price
has jumped 34% so far this year, the stock remains
undervalued given its low 2003 PER of 4.75x and P/BV ratio
of 0.57x. BUY
SPSU's
income statement (Bt mn)
|
Income Statement |
1999 |
2000 |
2001 |
2002F |
2003F |
2004F |
|
Sales |
1,838 |
2,582 |
2,697 |
3,881 |
5,805 |
6,676 |
|
Other income |
249 |
273 |
319 |
427 |
668 |
768 |
|
Total revenues |
2,087 |
2,855 |
3,015 |
4,309 |
6,473 |
7,443 |
|
Cost of Goods sold |
1,648 |
2,338 |
2,490 |
3,552 |
5,283 |
6,092 |
|
Depreciation and Amortization |
38 |
22 |
15 |
15 |
15 |
16 |
|
SG&A and Others Expenses |
299 |
357 |
445 |
536 |
801 |
921 |
|
EBIT |
102 |
138 |
65 |
206 |
373 |
415 |
|
Interest expenses |
22 |
6 |
10 |
8 |
3 |
2 |
|
EBT |
80 |
133 |
56 |
198 |
371 |
413 |
|
Equity Acc. + Extraordinary Gains |
(4) |
- |
- |
- |
- |
- |
|
Net profit |
55 |
97 |
35 |
147 |
274 |
305 |
|
EPS |
0.69 |
1.23 |
0.44 |
1.86 |
3.47 |
3.87 |
|
EPS Growth |
76.0% |
77.0% |
( 64.3%) |
323.9% |
87.0% |
11.4% |
|
PER |
23.78 |
13.44 |
37.68 |
8.89 |
4.75 |
4.27 |
|
EV/EBITDA |
7.1 |
7.3 |
16.5 |
5.3 |
2.6 |
2.1 |
|
P/BV |
0.72 |
0.68 |
0.67 |
0.63 |
0.57 |
0.52 |
|
Dividend / Share |
- |
- |
0.15 |
0.65 |
1.21 |
1.35 |
|
Dividend Yield |
0.0% |
0.0% |
0.9% |
3.9% |
7.4% |
8.2% |
|
Gearing |
net cash |
net cash |
0.02 |
net cash |
net cash |
net cash |
Note: COGs does not include Depreciation and Amortization
- Smash Junior
launch helps Suzuki sales surge 304% in January
S.P. Honda yesterday reported
that motorcycle sales in January accelerated 47% yoy to
138,807 units. Honda accounted for 70% of the market
followed by Suzuki, with 16%. However, Suzuki’s yoy sales
growth of 304% easily outpaced that of Honda’s of 135%
yoy. We believe Suzuki’s spectacular revenue growth is
partly due to its successful launch of the Smash Junior
model last October. This boosted Suzuki’s market share to
15% in 4Q02 and 16% in January compared with 13% in 3Q02 and
13% in 2002.
- Suzuki’s
market share expected to rise to15% in 2003
Last month S.P. Honda projected
that motorcycle sales will expand by 35% to 1.8 million units
this year. We now expect Suzuki’s market share to rise 15%
in 2003 due to increased sales of Suzuki Smash and Smash
Junior as well as the launch of the New Smash model last
month. SPSU’s management said that Thai Suzuki Motor (TSM)
plans to boost its research and advertising budgets this year,
with the aim of restoring Suzuki’s market share to
pre-economic crisis levels of 20%. TSM also plans to invest
Bt300mn this year to increase production capacity to 400,000
units.
Based on Honda’s projection
and a 15% market share for Suzuki, we have revised up our 2003
forecast for Suzuki sales from 234,000 units to 270,000 units.
As SPSU is Suzuki’s exclusive dealer in Thailand - apart
from 14 provinces in the south – we estimate that its sales
this year will climb 50% this year to Bt5,805mn while net
profit will surge 87% to Bt274mn. This is 15-16% higher than
our previous sales and earnings forecasts of Bt5,031mn and
Bt236mn, which were based on a 13% market share for Suzuki.
Motorcycle
sales and market share
| |
Honda |
%share |
Yamaha |
%share |
Suzuki |
%share |
Kawasaki |
%share |
Total |
|
1995 |
636,633 |
43.5% |
373,398 |
25.5% |
352,845 |
24.1% |
102,066 |
7.0% |
1,464,942 |
|
1996 |
632,530 |
51.3% |
278,819 |
22.6% |
233,967 |
19.0% |
88,272 |
7.2% |
1,233,588 |
|
1997 |
531,776 |
58.4% |
200,016 |
22.0% |
124,060 |
13.6% |
52,779 |
5.8% |
911,195 |
|
1998 |
357,571 |
68.7% |
76,878 |
14.8% |
57,900 |
11.1% |
28,135 |
5.4% |
520,648 |
|
1999 |
423,310 |
70.7% |
84,216 |
14.1% |
69,815 |
11.7% |
21,121 |
3.5% |
598,541 |
|
2000 |
571,326 |
72.4% |
92,828 |
11.8% |
106,572 |
13.5% |
18,128 |
2.3% |
788,854 |
|
2001 |
679,396 |
75.4% |
91,492 |
10.2% |
108,285 |
12.0% |
21,542 |
2.4% |
900,925 |
|
1Q02 |
222,049 |
76.7% |
29,426 |
10.2% |
25,280 |
8.7% |
12,382 |
4.3% |
289,357 |
|
2Q02 |
210,998 |
73.2% |
28,099 |
9.8% |
40,450 |
14.0% |
8,363 |
2.9% |
288,105 |
|
3Q02 |
252,644 |
72.3% |
39,482 |
11.3% |
45,680 |
13.1% |
7,612 |
2.2% |
349,277 |
|
4Q02 |
284,518 |
70.1% |
44,975 |
11.1% |
61,404 |
15.1% |
6,869 |
1.7% |
406,005 |
|
2002 |
970,209 |
72.8% |
141,982 |
10.7% |
172,814 |
13.0% |
35,226 |
2.6% |
1,332,744 |
|
2003F |
1,263,600 |
70.2% |
199,800 |
11.1% |
270,000 |
15.0% |
46,800 |
2.6% |
1,800,000 |
- SPSU’s
fair value estimated at Bt20-23
Using our PE Band model, we
estimate that SPSU shares should trade at a PER of 6x, or
Bt20. Based on our DCF model, however, the fair value for
SPSU is slightly higher at Bt23.
|
