Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

Delta Electronics (Thailand) / Index Rebalance

Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the SET50 index with the changes taking effect after the close of trading on 30 December.<a href="https://www.smartkarma.com/entities/bangkok-commercial-asset-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:28442:1" rel="noopener">Bangkok Commercial Asset Management (BAM TB)</a>, <a href="https://www.smartkarma.com/entities/com7-pcl" target="_blank" data-smartkarma-citation="entities:27411:1" rel="noopener">Com7 PCL (COM7 TB)</a> and <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> have been included in the index, replacing <a href="https://www.smartkarma.com/entities/banpu-power-pcl" target="_blank" data-smartkarma-citation="entities:23631:1" rel="noopener">Banpu Power PCL (BPP TB)</a>, <a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a> and <a href="https://www.smartkarma.com/entities/wha-corp-pcl" target="_blank" data-smartkarma-citation="entities:104:1" rel="noopener">WHA Corp Pcl (WHA TB)</a>. This was our base case scenario, though DELTA had the lowest probability of index inclusion.Terrible timing! <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> has gained 543.72% since it was deleted from the SET50 index at the June review, while <a href="https://www.smartkarma.com/entities/banpu-power-pcl" target="_blank" data-smartkarma-citation="entities:23631:1" rel="noopener">Banpu Power PCL (BPP TB)</a> has gained just 2.99% since it was included in the index at the June review. Not implementing this change in June would have led to the SET50 index return being over 3.5% higher than its actual return.One-way turnover for the rebalance is 4.92%. The impact of the changes does not appear like a lot, but the active funds trading ahead of implementation date could cause the stocks to move around a lot compared to their peers.This Insight is labelled Bullish as we expect DELTA to outperform its peers post the inclusion in the SET50 index. The stock could move lower post implementation date due to its higher valuations.

Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the SET50 index with the changes taking effect after the close of trading on 30 December.Bangkok Commercial Asset Management (BAM TB), Com7 PCL (COM7 TB) and Delta Electronics Thai (DELTA TB) have been included in the index, replacing Banpu Power PCL (BPP TB), IRPC PCL (IRPC TB) and WHA Corp Pcl (WHA TB). This was our base case scenario, though DELTA had the lowest probability of index inclusion.Terrible timing! Delta Electronics Thai (DELTA TB) has gained 543.72% since it was deleted from the SET50 index at the June review, while Banpu Power PCL (BPP TB) has gained just 2.99% since it was included in the index at the June review. Not implementing this change in June would have led to the SET50 index return being over 3.5% higher than its actual return.One-way turnover for the rebalance is 4.92%. The impact of the changes does not appear like a lot, but the active funds trading ahead of implementation date could cause the stocks to move around a lot compared to their peers.This Insight is labelled Bullish as we expect DELTA to outperform its peers post the inclusion in the SET50 index. The stock could move lower post implementation date due to its higher valuations.

<a href="https://www.smartkarma.com/entities/scg-packaging-public-company-limited" target="_blank" data-smartkarma-citation="entities:28684:1" rel="noopener">SCG Packaging (SCGP TB)</a> listed today on the Stock Exchange of Thailand (SET). No big bang opening day for the stock as it opened at the highs and quickly sold off to trade a tick or two above its IPO price of THB 35/share for most of the day.<a href="https://www.smartkarma.com/entities/scg-packaging-public-company-limited" target="_blank" data-smartkarma-citation="entities:28684:1" rel="noopener">SCG Packaging (SCGP TB)</a> traded 329.77m shares on the day at a VWAP of THB 35.9505. Bulk of the volume traded in the opening auction at THB 37.At the close of trading, SCGP traded at THB 35/share, probably supported by the greenshoe. That gave <a href="https://www.smartkarma.com/entities/scg-packaging-public-company-limited" target="_blank" data-smartkarma-citation="entities:28684:1" rel="noopener">SCG Packaging (SCGP TB)</a> a full market cap of THB 148.874bn placing it at rank 20 among the SET50 constituents and ensuring its market cap was more than 1% of the market cap of the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-index" target="_blank" data-smartkarma-citation="entities:22915:1" rel="noopener">Thailand SET Index (SET INDEX)</a> - 1.16% from our calculations. With a free float of 29.51%, the stock met all conditions for Fast Entry into the index.SET has just <a href="https://www.set.or.th/th/market/files/constituents/SET50_100_H2_2020_revised.pdf" target="_blank" rel="noopener">announced</a> the changes to the SET50 Index where <a href="https://www.smartkarma.com/entities/scg-packaging-public-company-limited" target="_blank" data-smartkarma-citation="entities:28684:1" rel="noopener">SCG Packaging (SCGP TB)</a> has been added and <a href="https://www.smartkarma.com/entities/thanachart-capital-pcl" target="_blank" data-smartkarma-citation="entities:297:1" rel="noopener">Thanachart Capital (TCAP TB)</a> has been deleted. The changes will need to be made at the close of trading on 27 October.The inclusion also affects the stocks to be included and excluded at the regular index review in December.

SCG Packaging (SCGP TB) listed today on the Stock Exchange of Thailand (SET). No big bang opening day for the stock as it opened at the highs and quickly sold off to trade a tick or two above its IPO price of THB 35/share for most of the day.SCG Packaging (SCGP TB) traded 329.77m shares on the day at a VWAP of THB 35.9505. Bulk of the volume traded in the opening auction at THB 37.At the close of trading, SCGP traded at THB 35/share, probably supported by the greenshoe. That gave SCG Packaging (SCGP TB) a full market cap of THB 148.874bn placing it at rank 20 among the SET50 constituents and ensuring its market cap was more than 1% of the market cap of the Thailand SET Index (SET INDEX) - 1.16% from our calculations. With a free float of 29.51%, the stock met all conditions for Fast Entry into the index.SET has just announced the changes to the SET50 Index where SCG Packaging (SCGP TB) has been added and Thanachart Capital (TCAP TB) has been deleted. The changes will need to be made at the close of trading on 27 October.The inclusion also affects the stocks to be included and excluded at the regular index review in December.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<div><a href="https://www.smartkarma.com/entities/scg-packaging-public-company-limited" target="_blank" data-smartkarma-citation="entities:28684:1" rel="noopener">SCG Packaging (SCGP TB)</a> raise around US$1.2bn in its Thailand IPO. It is a part of the <a href="https://www.smartkarma.com/entities/siam-cement-pcl-the" target="_blank" data-smartkarma-citation="entities:2589:1" rel="noopener">Siam Cement (SCC TB)</a> group.</div><div>SCGP is a packaging solutions provider in ASEAN offering fiber-based packaging, performance and polymer packaging, food service products, design, printing and other solutions. SCGP is the largest packaging paper and corrugated containers producer in ASEAN, as per Frost &amp; Sullivan. </div><div>I have covered various aspects of the deal in my earlier notes:</div><div><ul>
<li><a href="https://www.smartkarma.com/insights/scg-packaging-pre-ipo-shift-to-packaging-has-been-aiding-margins-but-acquisition-drove-up-leverage" target="_blank" rel="noopener">SCG Packaging Pre-IPO - Shift to packaging has been aiding margins but acquisitions have driven up leverage</a></li>
<li><a href="https://www.smartkarma.com/insights/scg-packaging-ipo-unexciting" target="_blank" rel="noopener">SCG Packaging IPO - Unexciting</a></li>
</ul></div>In this note, I'll talk about the deal updates and provide implied valuations at different share price levels.

SCG Packaging (SCGP TB) raise around US$1.2bn in its Thailand IPO. It is a part of the Siam Cement (SCC TB) group.SCGP is a packaging solutions provider in ASEAN offering fiber-based packaging, performance and polymer packaging, food service products, design, printing and other solutions. SCGP is the largest packaging paper and corrugated containers producer in ASEAN, as per Frost &amp; Sullivan. I have covered various aspects of the deal in my earlier notes:
SCG Packaging Pre-IPO - Shift to packaging has been aiding margins but acquisitions have driven up leverage
SCG Packaging IPO - Unexciting
In this note, I'll talk about the deal updates and provide implied valuations at different share price levels.

SCG Packaging IPO Trading - Placed with Domestics

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

Equity Bottom-Up

Bangkok Commercial Asset Management / Equity Bottom-Up

Bangkok Commercial Asset Management (BAM TB)

We followed up with companies that launched their IPOs around 2 years ago to see how they are doing. To refresh your memory, Bangkok Glass is Singha's Group glass bottling unit, while BAM (Bangkok Asset Management) was founded to manage non-performing loans that flooded Thailand during the AFC. Here's what we found:<ul>
<li>
Bangkok Glass reported earnings of Bt80m (down 5% YoY, 51% QoQ) on the back of Bt2.2bn revenues  (down 20% YoY, 27% QoQ) due to the government ban on alcohol, though it was partially offset by profits from the newly acquired power business in Vietnam.</li>
<li>BGC's outlook is improving in H2'20 as seen from the positive MoM momentum throughout Q2'20. Raw material costs, such as natural gas and scrap glass, is expected to remain low based on macroeconomic data.</li>
<li>
BAM was able to collect Bt5.9bn in H1'20, up Bt6.8% YoY, and they were happy with this in light of the pandemic situation. They continue to buy Bt6.56bn of NPLs at 55% discount and Bt1.1bn NPA (non-performing assets) at 40% discount this year and are confident of ample opportunities ahead.</li>
<li>The re-opening of booths allowed them to sell Bt42m worth of NPAs in July, and they will have 10 more of these during the rest of the year. While Shoppee is promising, it only accounted for Bt27m of comparable sales so far.</li>
</ul>

We followed up with companies that launched their IPOs around 2 years ago to see how they are doing. To refresh your memory, Bangkok Glass is Singha's Group glass bottling unit, while BAM (Bangkok Asset Management) was founded to manage non-performing loans that flooded Thailand during the AFC. Here's what we found:

Bangkok Glass reported earnings of Bt80m (down 5% YoY, 51% QoQ) on the back of Bt2.2bn revenues  (down 20% YoY, 27% QoQ) due to the government ban on alcohol, though it was partially offset by profits from the newly acquired power business in Vietnam.
BGC's outlook is improving in H2'20 as seen from the positive MoM momentum throughout Q2'20. Raw material costs, such as natural gas and scrap glass, is expected to remain low based on macroeconomic data.

BAM was able to collect Bt5.9bn in H1'20, up Bt6.8% YoY, and they were happy with this in light of the pandemic situation. They continue to buy Bt6.56bn of NPLs at 55% discount and Bt1.1bn NPA (non-performing assets) at 40% discount this year and are confident of ample opportunities ahead.
The re-opening of booths allowed them to sell Bt42m worth of NPAs in July, and they will have 10 more of these during the rest of the year. While Shoppee is promising, it only accounted for Bt27m of comparable sales so far.


Event-Driven

<a href="https://www.smartkarma.com/entities/scg-packaging-public-company-limited" target="_blank" data-smartkarma-citation="entities:28684:1" rel="noopener">SCG Packaging (SCGP TB)</a>, Thailand's largest packaging company, is looking to raise between THB 37.77-39.46bn (US$1.21-1.26bn) via a listing on the Stock Exchange of Thailand (SET) by selling 1.127bn shares (plus a greenshoe of 169m shares) at a price range of THB 33.5-35/share.Shares will be offered to investors between 28 September and 14 October with final pricing to be announced on 8 October and shares should begin trading in the second half of October.Using current market prices, the stock should be included in the SET50 index at the close on its third day of trading, but the final decision is dependent on <a href="https://www.smartkarma.com/entities/scg-packaging-public-company-limited" target="_blank" data-smartkarma-citation="entities:28684:1" rel="noopener">SCG Packaging (SCGP TB)</a>'s closing price on its first trading day and also on the performance of the current constituents of the SET50 index and the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-index" target="_blank" data-smartkarma-citation="entities:22915:1" rel="noopener">Thailand SET Index (SET INDEX)</a>.In this Insight, we take a look at the some of the IPO details and the possibility of the stock being included in the SET50 index.

SCG Packaging (SCGP TB), Thailand's largest packaging company, is looking to raise between THB 37.77-39.46bn (US$1.21-1.26bn) via a listing on the Stock Exchange of Thailand (SET) by selling 1.127bn shares (plus a greenshoe of 169m shares) at a price range of THB 33.5-35/share.Shares will be offered to investors between 28 September and 14 October with final pricing to be announced on 8 October and shares should begin trading in the second half of October.Using current market prices, the stock should be included in the SET50 index at the close on its third day of trading, but the final decision is dependent on SCG Packaging (SCGP TB)'s closing price on its first trading day and also on the performance of the current constituents of the SET50 index and the Thailand SET Index (SET INDEX).In this Insight, we take a look at the some of the IPO details and the possibility of the stock being included in the SET50 index.

SCG Packaging and SET50 Fast Entry Inclusion: In The Box

Thailand

Bangkok Commercial Asset Management Public Company Limited operates as an asset management company in Thailand, focusing on purchasing and managing non-performing loans (NPLs) and non-performing assets (NPAs). It acquires NPLs from financial institutions, managing them through debt negotiation, and also acquires NPAs, including properties from debt settlements and collateral from auctions, with an emphasis on adding value. The company was founded in 1998 and is headquartered in Bangkok, Thailand.

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Bangkok Commercial Asset Management (BAM TB)

SET50 Index Rebalance: DELTA to Buy

BAM, COM7 and DELTA have been added to the SET50 index replacing BPP, IRPC and WHA with the changes effective after the close on 30 Dec. With 11...

Brian Freitas

SCG Packaging Listing & SET50 Inclusion

SCG Packaging listed on the SET today and finished flat on the day. That was enough to warrant inclusion in the SET50 index. TCAP will be deleted...

Brian Freitas

SCG Packaging IPO Trading - Placed with Domestics

SCG Packaging (SCGP TB) raised around US$1.2bn in its Thailand IPO. Given its lack of growth in the past, we remain less than excited, to put it...

Sumeet Singh

Bangkok's Finest: Bangkok Glass and BAM

<p>We followed up with companies that launched their IPOs around 2-3 years ago to see how they are doing. To refresh your memory, Bangkok Glass is...

Athaporn Arayasantiparb, CFA

SCG Packaging and SET50 Fast Entry Inclusion: In The Box

SCG Packaging (SCGP TB)

Brian Freitas

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