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Initiating Coverage, 11 April 2014

Unique Engineering & Construction (UNIQ TB)

Buy

Engineering & Construction


Market Cap: USD167m

Target Price:
Price:

THB9.00
THB6.90
Macro
Risks

Thailands Next Major Contractor

Growth
Value

Unique Engineering & Construction (UNIQ TB)


Relative to Stock Exchange of Thailand Index (RHS)

173

11.3

162

10.3

150

9.3

139

8.3

127

7.3

116

6.3

104

5.3
100
90
80
70
60
50
40
30
20
10

93

Feb-14

Dec-13

Oct-13

Aug-13

Jun-13

Source: Bloomberg

Avg Turnover (THB/USD)


Cons. Upside (%)
Upside (%)
52-wk Price low/high (THB)
Free float (%)

9.81m/0.30m
30.4
30.4
5.90 - 11.4
45

Shareholders (%)
Mr. Kreangsak
Suviwattanachai
Mr. Wanchai Punwichien
THAI NVDR

35.8
8.9
6.7

Shariah compliant

Strong orderbook and record-high earnings. As at end-2013, Unique


Engineering & Construction (Unique)s orderbook was at its record-high
THB30bn, accounting for three years of the companys construction
revenue. This was a result of MRT Red Line Contract 1, which
accounted for 83% of its orderbook. Moreover, its sale orderbook ratio of
4.4x as at end-2013 was higher than the sectors average 2-3x. Core
earnings are forecast to jump 13% y-o-y to THB663m in FY14, and go
up by 24% y-o-y to THB821m in FY15. We believe the current political
stalemate has had minimal impact on our earnings forecast as Unique
has already signed on and secured 83% of our forecast revenue.
UNIQ Foundation, UNIQ Tunneling to be floated. Uniques
management informed us that it expects its subsidiaries, UNIQ
Foundation and UNIQ Tunneling, to be listed on the stock market in the
next few years. A back-of-the-envelope calculation puts the total entity
value of its two subsidiaries at c. THB300-500m, depending on market
valuations and sentiment at the time of listing.
Potential capital increase. Apart from listing its subsidiaries, the
company expects to increase its capital from THB780m (par value
THB1/share) to THB1bn (par value THB1/share), which will enable it to
bid for larger projects going forward. The capital increase implies a
potential dilution of 28% in its shares. However, the details, timing and
pricing of the capital increase remain uncertain.
Initiate with BUY. Given the companys strong orderbook and a long
list of potential projects, we recommend that investors accumulate the
stock on any price weakness. We initiate coverage with a BUY call and
THB9.00 TP, pegged to a FY14F P/E of 10.5x, and at a 25% discount to
the stocks 5-year mean P/E.

Forecasts and Valuations

Dec-11

Dec-12

Dec-13

Dec-14F

Dec-15F

4,313

4,014

6,715

10,619

14,047

Reported net profit (THBm)

123

(228)

587

663

821

Recurring net profit (THBm)

123

(228)

587

663

821

(17.4)

(286.4)

12.9

23.9

Recurring EPS (THB)

0.20

(0.35)

0.81

0.85

1.05

DPS (THB)

0.06

0.00

0.06

0.16

0.21

Kannika Siamwalla, CFA 66 2862 9744


License No.23517

Recurring P/E (x)

35.2

8.5

8.1

6.6

P/B (x)

2.75

2.24

2.07

1.71

1.42

kannika.si@rhbgroup.com

P/CF (x)

5.7

27.2

3.7

4.4

5.2

Dividend Yield (%)

0.9

0.0

0.9

2.3

3.1

Chun Phokaisawan +66 2862 2029

EV/EBITDA (x)

9.6

43.2

5.8

4.5

3.7

chun.ph@rhbgroup.com

Return on average equity (%)

7.8

(12.6)

25.1

23.1

23.7

66.7

44.7

87.8

76.3

53.4

0.0

0.0

Total turnover (THBm)

Recurring net profit growth (%)

Net debt to equity (%)


Our vs consensus EPS (%)

na

na

Source: Company data, RHB estimates

See important disclosures at the end of this report

.
2
0
.
3

0
0
.
3
0
0
We initiate coverage on Unique with BUY and THB9.00/share TP, based .
0
on a 10.5x FY14 P/E. We like its strong order book, which could boost 0
earnings by 13% y-o-y to THB663m in FY14 and 24% y-o-y to THB821m 0
in FY15. Once market sentiment turns favorable, Unique plans to list its
two subsidiaries, UNIQ Foundation and UNIQ Tunneling, as well as
increase its capital. This will enable it to bid for larger projects going
forward.

Apr-13

Vol m

Price Close

12.3

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Unique Engineering & Construction (UNIQ TB)


11 April 2014

Table Of Contents
Valuation And Recommendation

Shareholder Structure

Core Business and Competition

Current And Future Projects

Financial Analysis

See important disclosures at the end of this report

10

Unique Engineering & Construction (UNIQ TB)


11 April 2014

Valuation And Recommendation


Our

TP of THB9.00 is based on a FY14F


10.5x P/E, which is at a 25% discount to its 5year mean P/E, and provides an upside of
28%.

Due to the current political stalemate, Uniques share price has fallen closer to our
distressed valuation of THB6.40 (around its 5-year mean P/E). At this price, we
believe the share has already factored in most of the downside from the potential
delays in government projects.
We believe the counter can trade at a premium again after the political situation
shows signs of resolution. We value it at THB9.00/share based on P/E valuation. Our
THB9.00 TP is pegged to a P/E of 10.5x, which is at a 25% discount to its 5-year
trailing 12-month mean P/E. We deem this a reasonable multiple given: i) its smaller
size (small cap), ii) low liquidity in the stock and iii) under-owned stock as there is no
analyst coverage. However, we expect the company to continue receiving larger
government infrastructure projects as we enter into what we believe to be the peak of
Thailands construction/investment cycle over the next five years.
The current political stalemate has little bearing on our earnings forecast as we only
include the projects on hand, which will be Uniques key earnings driver over the next
2-3 years.
As at end of 2013, Uniques sale orderbook ratio stood at 4.4x, which is the highest
among its competitors. Given its current strong orderbook and a long list of future
potential projects, we recommend accumulating the stock on share price weakness.
We initiate our coverage with a BUY recommendation and a TP of THB 9.00/share.
Figure 1: Trailing 12-month P/E band chart

(x)

At the current price, the stock is trading at

45

near-distressed valuations.
35

+2 sd: 28.1x

25

+1 sd: 21.1x
Mean: 14.1x

15

-1 sd: 7.1x

Mar-08
-5

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

Mar-14

Source: Bloomberg, RHB estimates

Figure 2: Contractors sale orderbook ratios


(X)
6

As at end-

, Uniques sale orderbook


ratio of 4.4x was the highest among its
competitors.

5
4
3

2
1
0

UNIQ

CK

STEC

Source: Company data, RHB estimates

See important disclosures at the end of this report

Unique Engineering & Construction (UNIQ TB)


11 April 2014

By sector comparison, Unique trades at a lower P/E, P/BV and EV/EBITDA. It


provides a dividend yield of 2.3%, which is in line with the sector average of 2.2%.
Uniques ROE at 21% is one of the highest among its peers, compared with the
sectors average 13.5%.
Figure 3: Peer comparison
P/E
Company
CK
STEC
ITD
UNIQ
Average

2014F
28.3
17.1
24.6
8.2
19.6

2015F
21.9
15.9
20.4
6.6
16.2

P/BV
2014F
1.7
3.2
1.4
1.7
2.1

2015F
1.6
2.9
1.4
1.4
1.8

EV/EBITDA
2014F
2015F
18.6
17.0
8.5
7.9
9.2
8.6
4.9
4.0
10.3
9.4

Div yield (%)


2014F
2015F
1.7
1.8
3.1
3.2
1.7
1.3
2.3
3.0
2.2
2.3

ROE (%)
2014F
2015F
6.6
7.6
19.6
19.7
6.5
7.4
21.1
21.6
13.5
14.1

Source: Bloomberg

The company expects potential IPOs of its

Unique expects to list two of its subsidiaries, UNIQ Foundation (a bored piling
company) and UNIQ Tunneling (a pipe jacking company) within the next few years.
two subsidiaries, UNIQ Foundation and UNIQ
Currently, UNIQ Foundation and UNIQ Tunneling account for 4 % and 1% of the
Tunneling.
companys construction revenue respectively. The company currently holds 99.9% of
the shares in each subsidiary. Based on the current market valuations for Thai
construction companies in general, a back-of-the envelope calculation puts the listing
of the two companies in the range of THB300-500m based on 8x P/E on the
subsidiaries earnings, depending on market valuation sentiment at the time of listing.
We have not included this in our valuation as details regarding the listing of the two
companies remain uncertain at the moment.
Meanwhile, Unique also expects to increase its capital from THB780m (par
THB1/share) to THB1bn (par THB1/share), which will enable it to bid for larger
projects going forward. The capital increase implies a potential share dilution of 28%.
The details, timing and pricing of the capital increase remain uncertain at the
moment.

See important disclosures at the end of this report

Unique Engineering & Construction (UNIQ TB)


11 April 2014

Shareholders Structure
Mr. Kreangsak Suviwattanachai, CEO of the

company, is Uniques major shareholder. We


believe the chairman of the company, Mr.
Natee Panichewa, is well connected.

The major shareholder of Unique is Mr Kreangsak Suviwattanachai (35.7%), CEO of


the company, while 10% of the shares are owned by Mr Wanchai Punwichien. We
believe that it is the chairman of the company, Mr Natee Panichewa, who has the
strong business network that will allow the company to receive more construction
projects going forward. Panichewas family has strong business networks with many
reputable families in Thailand and engages in many businesses such as property
development, logistic, insurance, and construction. Currently, all of the companys
customers are government agencies and state enterprises. The companys past
projects include SRT Commuter Train Project Bang Sue- Taling Chan, Industrial Ring
Road, Contract 3 and The Ramintra Outer Bangkok Ring Road Expressway, Contract
1.
Figure 4: Shareholder structure as of December 2013

Source: Company data

Figure 5: Uniques target customers

Source: Company data

See important disclosures at the end of this report

Unique Engineering & Construction (UNIQ TB)


11 April 2014

Core Business And Competition


Unique is one of the most profitable
contractors in Thailand with a normalised
gross margin of 15%.

Unique is a general construction company with expertise in medium-large scale


infrastructure projects (ie roads, bridge, underpass and mass transit). The company
mainly services public sector customers as the main contractor, sub-contractor, and
consortium member. The company is one of the most profitable contractors in the
industry. Its gross profit margin stood at 19% in 2013 while sector average was at
around 1 %. This is mainly due to Uniques strength in using advanced technology in
its construction projects and its ability to control cost effectively.
Figure 6: Uniques past projects

Source: Company data

Figure 7: Uniques gross margin compared with other contractors

(%)
20
18
16
14
12
10
8
6
4
2

UNIQ

CK

STEC

Source: Company data, RHB estimate

Unique is one of the smaller players in


the industry, with 5% of the market
share

See important disclosures at the end of this report

Currently, the construction industry in Thailand has an estimated total value of


around THB1trn. We expect competition in the industry to be relatively high in FY14
as many government projects could potentially be delayed due to the current political
stalemate. Most construction projects are awarded through contract bidding process.
Project owners often select contractors based on: i) the contractors experience, ii)
quality of the contractors work, iii) the contractors financial capabilities and iv)
bidding price.

Unique Engineering & Construction (UNIQ TB)


11 April 2014
Domestically, there are currently three major competitors who are qualified bidders
for large-scale construction projects, namely Italian-Thai Development (ITD TB, NR),
Sino Thai Engineering & Construction (STEC TB, BUY, TP: THB20.00) and CH
Karnchang (CK TB, BUY, TP: THB18.30). CH Karnchang has around 20-25% market
shares in the construction industry while Italian-Thai and Sino Thai Engineering hold
around 28% and 15% respectively in the industry respectively. Unique is one of the
smaller players with a 5% market share. The international competitors include
construction companies from Japan, China and Europe such as Kajima Corporation
(1812 JP, NR), Obayashi Corporation (1802 JP, NR), Siemens (SIE GR, NR) and
Bilfinger (GBF GR, NR) which will more likely enter as JV partners with the locals
and serve as technology providers.
Figure 8: Market share in the industry

CK
23%

Others
29%

UNIQ
5%

STEC
15%

ITD
28%

Source: Company data, RHB estimates

See important disclosures at the end of this report

Unique Engineering & Construction (UNIQ TB)


11 April 2014

Current And Future Projects

cts
Uniques orderbook jumped significantly in
2013 as a result of MRT Red Line Contract
, which make up % of the companys
current orderbook.

Current orderbook
Uniques orderbook jumped significantly in 2011 and 2013 as a result of two major
projects signed the Blue Line Extension Project Contract 3 (THB11.8bn) and MRT
Red Line Contract 1 (THB29.8bn).
As at end-2
, the companys orderbook was at a record high THB30bn, accounting
for three years of the companys construction revenue. This was a result of MRT Red
Line Contract 1, which accounted for 83% of its orderbook.
The company records sales revenue by percentage of completion. MRT Red Line
Contract 1 and Blue Line Extension Project Contract 3 should allow the company to
book sales totaling THB29bn over the next three years. We forecast a FY14 revenue
of THB10bn, with MRT Red Line Contract 1 and Blue Line Extension Project Contract
3 accounting for 80% and 16% respectively.

Figure 9: Uniques rising orderbook


(THB bn)
35

30
30

26
25
20

16
15

12
9

10

6
5

7
4

0
2014F

Source: Company data, RHB estimates

Figure 10: Companys orderbook as at end of FY13


Active projects

Project value
(THB bn)

Remaining Value
(THB bn)

Red Line Contract 1 Bang Sue Grand Station

30

25

Blue Line Contract 3 Tao pun-Tha Phra contract 3

12

n.a.

Others
Source: Company data

Potential projects in 2014

The company will submit its bids for Dark


Green Line MRTA and Suvarnabhumi
Airport Phase II projects this month and
July, respectively

See important disclosures at the end of this report

In 2014, Unique plans to bid for Dark Green Line MRTA (Saphan Mai- Ku Kott)
project worth THB26bn, two double-track projects worth THB10bn, and
Suvarnabhumi Airport Phase II project worth THB48bn. Given its historical track
record, we believe it will win at least 5% or c. THB5bn of the total bidding project
value in 2014, which in turn, should support Uniques earnings during 2015-2018.
The company will submit its bids for Dark Green Line MRTA and Suvarnabhumi
Phase II projects in April and July respectively. We expect the bidding outcome for
both projects to be announced in August-October.
Note that for Dark Green Line MRTA, government approval will be required after the
bidding outcome. However, Suvarnabhumi Airport Phase II project does not require
cabinet approval since it was already approved by the cabinet and the National
Economic and Social Development Board in 2010.

Unique Engineering & Construction (UNIQ TB)


11 April 2014

Figure 11: Bidding projects in 2014


Project Bidding in 2014

MRT: Dark Green Line

Double Track

Suvarnabhumi Airport
(Phase II)

Value
(THBm)

Contract 1: Mo chit-Saphan Mai Section

14,021

Contract 2: Saphan Mai-Ku Kott Section

6,126

Contract 3: Depot and Park&Ride Facilities

3,709

Contract 4: Trackworks
Contract 1: Double Track (Cha Choeng Sao - Wihan
Daeng), Chord Lines
Contract 2: Double Track (Wihan Daeng - Buu Yai
Section), Railway Tunnel
Contract 1: Extension on the west-side of the existing
Passenger Terminal Building

2,609
10,184
621
39,046

Contract 2: Construction of Midfield Satellite Terminal

7,087

Contract 3: System design and construction of utilities

2,565

Total Value

85,968

Source: Company data

See important disclosures at the end of this report

Unique Engineering & Construction (UNIQ TB)


11 April 2014

Financial Analysis
Construction revenue to grow by 58%
y-o-y in 2014, supported by revenue
recognition from MRT Red Line Contract 1.

Construction revenue declined 6.8% y-o-y to THB4.0bn in FY12 from THB4.3bn in


FY11 due to the severe floods in 4QFY11, which disrupted the construction of Red
Line Bang Sue-Taling Chan and MRT Blue Line Hua Lamphong-Bang Khae.
However, construction revenue surged 67% y-o-y to THB6.7bn in FY13 as the
company recognised revenue from the construction of MRT Blue Line Hua
Lamphong-Bang Khae and Pattanakarn-Onuch Interchange projects.
We expect Unique to report construction revenue of THB10bn (+58% y-o-y) in 2014,
and THB14bn (+32% y-o-y) in 2015. The significant revenue increase will be driven
mainly by revenue recognition from MRT Red Line Contract 1 and Blue Line
Extension Contract 3 projects. Revenue from MRT Red Line Contract 1 and Blue
Line Extension Contract 3 projects will account for 96% and 97% of our total turnover
forecasts in FY14 and FY15 respectively.
Figure 12: Uniques rising sales growth
(THB bn)
16
14
12
10
8
6
4
2
0
2014F

2015F

(2)
Revenue

EBITDA

Net income (Ex. EI)

Source: Company data, RHB estimates

Gross profit margin is expected to decline to a


a normalised 15-16% level in FY14 as we
expect lower trade discounts.

Gross profit margin jumped to 19% in FY13 from 10% in FY12. This was mainly due
to a trade discount in construction material and machinery, which was the result of
heavy working capital investment in MRT Red Line Contract 1 and Blue Line
Extension Contract 3 projects. We forecast gross profit margin to decline to its
normalised level of 15-16% in FY14 and FY15. Additionally, cement and steel prices
are expected to remain stable in FY14. In anticipation of the passing of the THB2trn
Infrastructure Bill in FY13, the producers overproduced construction materials,
resulting in an oversupply.
Figure 13: Earnings outlook
(%)
25
20
15
10

5
0

2014F

2015F

-5
-10

Gross margin

EBITDA margin

Net margin (Ex. EI)

Source: Company data

See important disclosures at the end of this report

10

Unique Engineering & Construction (UNIQ TB)


11 April 2014

The current political stalemate has


minimal impact on our forecasts.

Core earnings are expected to come in at THB 663m (13% y-o-y) in FY14 and THB
821m (24% y-o-y) in FY15. We believe the current political stalemate has minimal
impact on our earnings forecast as Unique has already signed and secured most of
the revenue from MRT Red Line Contract 1 and Blue Line Extension Contract 3
projects in FY14. There is limited downside risk to our earnings forecast.
Figure 14: Interest bearing debt and financial debt
(THB bn)

(x)

2.0
1.8

1.6
3

1.4
1.2

1.0

0.8
0.6

0.4
1

0.2

0.0
2014F
Financial Debt (LHS)

2015F

Interest bearing D/E (RHS)

Source: Company data, RHB estimates

Debt-to-Equity (D/E) ratio is within the


industry average.

The companys interest bearing debt increased significantly to 1.1x in 2013 from 0.5x
in 2012 as a result of significant investment in construction equipment and machinery
for MRT Red Line Contract 1 and Blue Line Extension Contract 3 projects. However,
Uniques current interest bearing ratio of 1.1x is still relatively low compared with the
sector average of more than 2x. Moreover, its interest coverage ratio was at 6.2x in
FY13, compared with 3x in FY11. We are confident that the company will be able to
repay its debts and be ready for new projects.
We expect Uniques interest bearing debt-to-equity (D/E) ratio to decline slightly to
1.0x and 0.8x in FY14 and FY15 as the company will repay its debts after the
completion of the Blue Line Extension Contract 3 project. Note that most of its debts
are short-term project financing, which will be fully repaid after the completion of the
projects. At the moment, we believe that the company is not likely to make any
significant investment in construction machinery since it has already invested in
major construction machinery and equipment for current and future potential projects
in FY13.

Interest-bearing D/E to decline slightly to


1.0x in FY14 as the company pays back its
debt after the Blue Line Extension
Contract 3 project has been completed.

The companys cash flow from operations is expected to be positive and remain at
the same level in FY14 and FY15 as it continues to recognise revenue from the
construction of Red Line Contract 1 project. Capital expenditure is expected to be
minimal in FY14 and FY15 since the company has already invested in major
construction machinery and equipment in FY13. Hence, we believe the company can
generate enough cash internally to finance its projects in FY14 and FY15.
Figure 15: Uniques cash flow
2011

2012

2013

2014F

2015F

CFO

759

164

1,365

1,214

1,033

CFI

(521)

(232)

(2,915)

(1,200)

(500)

FCF

404

(51)

(1,338)

14

533

CFF

(513)

19

1,762

171

(353)

196

147

359

544

724

Ending cash

Source: Company data, RHB estimates

See important disclosures at the end of this report

11

Unique Engineering & Construction (UNIQ TB)


11 April 2014

Financial Exhibits
Profit & Loss (THBm)

Dec-11

Dec-12

Dec-13

Dec-14F

Total turnover

4,313

4,014

6,715

10,619

14,047

Cost of sales

(3,664)

(3,608)

(5,437)

(8,920)

(11,940)

1,279

1,699

2,107

Gross profit

Dec-15F

649

406

(370)

(479)

(484)

(690)

Other operating costs

(19)

(18)

(21)

(22)

Operating profit

260

(91)

773

987

1,172

1,103

1,550

1,787

Gen & admin expenses

Operating EBITDA
Depreciation of fixed assets
Operating EBIT
Other recurring income

448

106

(188)

(197)

(330)

(563)

260

(91)

773

987

(913)
(23)

(616)
1,172

22

19

99

53

70

Interest expense

(92)

(76)

(140)

(212)

(216)

Pre-tax profit

190

(148)

732

828

Taxation

(67)

(80)

(146)

(166)

(0)

(0)

(0)

(0)

Minority interests

1,026
(205)
(0)

Profit after tax & minorities

123

(228)

587

663

821

Reported net profit

123

(228)

587

663

821

Recurring net profit

123

(228)

587

663

821

Source: Company data, RHB estimates

Cash flow (THBm)

Dec-13

Dec-14F

Dec-15F

Operating profit

Dec-11
260

Dec-12
(91)

773

987

1,172

Depreciation & amortisation

188

197

330

563

616

Change in working capital

335

(98)

509

52

(345)

Other operating cash flow

136

313

38

Operating cash flow

919

320

1,651

Interest paid

(92)

(76)

(140)

(212)

Tax paid

(67)

(80)

(146)

(166)

Cash flow from operations

759

164

1,365

1,214

Capex

(355)

(215)

(2,703)

(1,200)

Other investing cash flow

(165)

(18)

(211)

Cash flow from investing activities

(521)

(232)

(2,915)

(1,200)

(500)

(125)

(164)

Dividends paid

(38)

(47)

Proceeds from issue of shares

(37)

191

(439)

(172)

1,808

Increase in debt
Other financing cash flow
Cash flow from financing activities
Cash at beginning of period
Total cash generated
Implied cash at end of period

(0)

(11)
1,591

(0)

296
-

12
1,454
(216)
(205)
1,033
(500)
-

(188)
-

(513)

19

1,762

171

(353)

470

196

147

359

544

(274)

(49)

212

185

180

196

147

359

544

724

Source: Company data, RHB estimates

See important disclosures at the end of this report

12

Unique Engineering & Construction (UNIQ TB)


11 April 2014

Financial Exhibits
Balance Sheet (THBm)

Dec-11

Dec-12

Dec-13

Dec-14F

196

147

592

776

957

Inventories

1,337

542

556

892

1,433

Accounts receivable

1,974

3,372

6,713

9,663

12,783

Other current assets

550

290

479

584

773

4,057

4,351

8,339

11,915

15,945

Total cash and equivalents

Total current assets


Total investments
Tangible fixed assets

Dec-15F

382

360

394

467

501

1,219

1,368

3,753

4,390

4,274

Intangible assets

Total other assets

44

80

126

190

248

Total non-current assets

1,648

1,812

4,278

5,051

5,028

Total assets

5,705

6,163

12,617

16,967

20,973

Short-term debt

766

687

1,478

1,694

1,468

Accounts payable

1,648

1,706

3,223

4,460

5,970

Other current liabilities

1,121

1,186

3,773

6,081

8,094

Total current liabilities

3,534

3,579

8,473

12,235

15,532

Total long-term debt

476

382

1,400

1,480

1,517

Other liabilities

126

137

139

110

125

Total non-current liabilities

603

519

1,540

1,590

1,642
17,174

Total liabilities

4,137

4,098

10,013

13,824

Share capital

671

780

780

780

780

Retained earnings reserve

803

1,191

1,731

2,269

2,925

Other reserves

94

94

94

94

94

1,568

2,064

2,604

3,142

3,799

Minority interests

Other equity

(0)

Total equity

1,569

2,064

2,604

3,142

3,799

Total liabilities & equity

5,705

6,163

12,617

16,967

20,973

Dec-11

Dec-12

Dec-13

Dec-14F

Dec-15F

14.5

(6.9)

67.3

58.1

32.3

Operating profit growth (%)

(16.5)

(135.1)

0.0

27.6

18.7

Net profit growth (%)

(17.4)

(286.4)

0.0

12.9

23.9

EPS growth (%)

(17.4)

(279.8)

0.0

5.1

23.9

(0.8)

22.6

8.6

20.7

20.9

Operating margin (%)

6.0

(2.3)

11.5

9.3

8.3

Net profit margin (%)

2.8

(5.7)

8.7

6.2

5.8

Return on average assets (%)

2.2

(3.8)

6.2

4.5

4.3

Return on average equity (%)

7.8

(12.6)

25.1

23.1

23.7

Net debt to equity (%)

66.7

44.7

87.8

76.3

53.4

DPS

0.06

0.00

0.06

0.16

0.21

Recurrent cash flow per share

1.21

0.25

1.88

1.56

1.33

Shareholders' equity

Source: Company data, RHB estimates

Key Ratios (THB)


Revenue growth (%)

Bv per share growth (%)

Source: Company data, RHB estimates

See important disclosures at the end of this report

13

Unique Engineering & Construction (UNIQ TB)


11 April 2014

SWOT Analysis
One of the leading contractors in Thailand

Political
impasse which
could potentially
delay
construction
projects

Healthy orderbook of THB30bn, accounting for three


years of current construction revenue

Competition
from
international
contractors

Bidding for
MRTA Dark
Green Line
project in April
Bidding for
Suvarnabhumi
Airport Phase II
project in July

Reliance on government projects


Weak economy could slow down private spending

P/E (x) vs EPS growth

P/BV (x) vs ROAE

1,950%

120

1,600%

100

1,250%

20

-150%

-500%

P/E (x) (lhs)

Jan-15

200%

Jan-14

550%

40

Jan-13

60

Jan-12

900%

Jan-11

80

EPS growth (rhs)

Source: Company data, RHB estimates

2.5

23%

2.0

15%

1.5

8%

1.0

0%

0.5

-8%

0.0

-15%

P/B (x) (lhs)

Jan-15

2,300%

140

30%

Jan-14

160

3.0

Jan-13

2,650%

Jan-12

3,000%

180

Jan-11

200

Return on average equity (rhs)

Source: Company data, RHB estimates

Company Profile
Unique is one of the leading construction companies in Thailand. The company's expertise lies in the construction of medium to large
public utility construction which requires expertise in the management of projects and advanced technologies.

See important disclosures at the end of this report

14

Unique Engineering & Construction (UNIQ TB)


11 April 2014

Recommendation Chart
Price Close
13
11
9
7
5

3
1
Apr-09

Jul-10

Oct-11

Jan-13

Source: RHB estimates, Bloomberg


Date

Recommendation

Target Price Price

2014-04-10

Source : RHB estimates, Bloomberg

See important disclosures at the end of this report

15

RHB Guide to Investment Ratings


Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage

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16

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17

Thai Institute of Directors Association (IOD) Corporate Governance Report Rating 2013

ADVANC
AOT
ASIMAR
BAFS
BANPU
BAY
BBL

2S
ACAP
AF
AHC
AIT
AKP
AMANAH
AMARIN
AMATA
AP
APCO
APCS
ASIA
ASK
ASP

BCP
BECL
BKI
BROOK
BTS
CIMB
CK

CPF
CPN
CSL
DRT
DTAC
EASTW
EGCO

AYUD
BEC
BFIT
BH
BIGC
BJC
BLA
BMCL
BWG
CCET
CENTEL
CFRESH
CGS
CHOW
CM

ERW
GRAMMY
HANA
HEMRAJ
ICC
INTUCH
IRPC

CNT
CPALL
CSC
DCC
DELTA
DTC
ECL
EE
EIC
ESSO
FE
FORTH
GBX
GC
GFPT

IVL
KBANK
KKP
KTB
LPN
MCOT
MINT

GL
GLOW
GOLD
GSTEL
GUNKUL
HMPRO
HTC
IFEC
INET
ITD
JAS
JUBILE
KBS
KCE
KGI

NKI
NOBLE
PAP
PG
PHOL
PR
PRANDA

KKC
KSL
KWC
L&E
LANNA
LH
LHBANK
LHK
LIVE
LOXLEY
LRH
LST
MACO
MAJOR
MAKRO

PS
PSL
PTT
PTTEP
PTTGC
QH
RATCH

MBK
MBKET
MFC
MFEC
MODERN
MTI
NBC
NCH
NINE
NMG
NSI
NWR
OCC
OFM
OGC

ROBINS
RS
S&J
SAMART
SAMTEL
SAT
SC

OISHI
PB
PDI
PE
PF
PJW
PM
PPM
PPP
PREB
PRG
PT
PYLON
QTC
RASA

SCB
SCC
SCSMG
SE-ED
SIM
SIS
SITHAI

SABINA
SAMCO
SCCC
SCG
SEAFCO
SFP
SIAM
SINGER
SIRI
SKR
SMT
SNP
SPCG
SPPT
SSF

SNC
SPALI
SPI
SSI
SSSC
SVI
SYMC

TCAP
THAI
THCOM
THRE
TIP
TASCO
TKT

STANLY
STEC
SUC
SUSCO
SYNTEC
TASCO
TCP
TF
TFD
TFI
THANA
THANI
THIP
TICON
TIPCO

TK
TLUXE
TMILL
TMT
TNL
TOG
TPC
TPCORP
TPIPL
TRT
TRU
TSC
TSTE
TSTH
TTA

TBSP
TCCC
TEAM
TGCI
TIC
TIES
TIW
TKS
TMC
TMD
TMI
TNDT
TNPC
TOPP
TPA

TPP
TR
TTI
TVD
TVI
TWZ
UBIS
UEC
UOBKH
UPF
UWC
VARO
VTE
WAVE
WG

TMB
TNITY
TOP
TRC
TRUE
TTW
TVO

UV
VGI
WACOAL

TTCL zZMICO
TUF
TWFP
TYM
UAC
UMI
UMS
UP
UPOIC
UT
VIBHA
VIH
VNG
VNT
YUASA

*** PHATRA was voluntarily delisted from the Stock Exchange of Thailand effectively on September 25,2012

A
AAV
AEC
AEONTS
AFC
AGE
AH
AI
AJ
AKR
ALUCON
ANAN
ARIP
AS
BAT-3K

BCH
BEAUTY
BGI
BLAND
BOL
BROCK
BSBM
CHARAN
CHUO
CI
CIG
CITY
CMR
CNS
CPL

CRANE
CSP
CSR
CTW
DEMCO
DNA
DRACO
EA
EARTH
EASON
EMC
EPCO
F&D
FNS
FOCUS

FPI
FSS
GENCO
GFM
GJS
GLOBAL
HFT
HTECH
HYDRO
IFS
IHL
ILINK
INOX
IRC
IRPC

IT
JMART
JMT
JTS
JUTHA
KASET
KC
KCAR
KDH
KTC
KWH
LALIN
LEE
MATCH
MATI

MBAX
MDX
PRINC
MJD
MK
MOONG
MPIC
MSC
NC
NIPPON
NNCL
NTV
OSK
PAE
PATO

PICO
PL
POST
PRECHA
PRIN
Q-CON
QLT
RCI
RCL
ROJNA
RPC
SCBLIF
SCP
SENA
SF

SGP
SIMAT
SLC
SMIT
SMK
SOLAR
SPC
SPG
SRICHA
SSC
STA
SUPER
SVOA
SWC
SYNEX

WIN
WORK

*** CIMBI was voluntarily delisted from the Stock Exchange of Thailand effectively on September 25, 2012.

IOD (IOD Disclaimer)

(IOD) (Corporate Governance)


IOD


()