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

Supalai Public Company / Equity Bottom-Up

Five recent interesting trends/news that could influence Thai equities/markets include:<ul>
<li>
Wutthisak Clinic files for bankruptcy. Once one of Thailand's most famous clinics for cosmetic surgery, the filing also has a domino effect on parent company EFORL and the reputation of Vichai Thongtaeng, one of Thailand's most famous investors.</li>
<li>
Supalai diversifies into Australia. On the expertise front, it seems like a risky venture, but given the weak prospects of Thai property and presence of local partners, it may be the right thing to do at this point.</li>
<li>
Small deal updates. In the shadow of CP Group's mega-takeover of Tesco Asia, Ratchaburi, IIG, SKY, and ACAP are all hatching deals of their own. Ootoya, a CENTEL-run brand in Thailand, is also fending a hostile takeover in Japan.</li>
<li>
New alliances. BSR consortium looks set to win two motorway contracts after pulling Gulf into the new alliance. </li>
<li>
KBS delays its plant construction, but their infrastructure fund's IPO still went on in early August. </li>
</ul>

Five recent interesting trends/news that could influence Thai equities/markets include:

Wutthisak Clinic files for bankruptcy. Once one of Thailand's most famous clinics for cosmetic surgery, the filing also has a domino effect on parent company EFORL and the reputation of Vichai Thongtaeng, one of Thailand's most famous investors.

Supalai diversifies into Australia. On the expertise front, it seems like a risky venture, but given the weak prospects of Thai property and presence of local partners, it may be the right thing to do at this point.

Small deal updates. In the shadow of CP Group's mega-takeover of Tesco Asia, Ratchaburi, IIG, SKY, and ACAP are all hatching deals of their own. Ootoya, a CENTEL-run brand in Thailand, is also fending a hostile takeover in Japan.

New alliances. BSR consortium looks set to win two motorway contracts after pulling Gulf into the new alliance. 

KBS delays its plant construction, but their infrastructure fund's IPO still went on in early August. 


Snippets #43: Wutthisak Clinic Bankruptcy, Supalai Goes Down Under

Equity Capital Markets

Global Service Center PCL / Equity Capital Markets

For this month, we highlight the upcoming IPO of GSC, which will be the second call center company in Thailand to ever be properly listed. Firm underwritten by Finnex, there are a couple of interesting points to note about this company:<ul>
<li>
Estimated valuations. We estimate the IPO price of Bt3.6/sh, assuming the same PE as OTO, its only comparable in Thailand. We would have preferred DCF, but judging from the low profits and cashflows, the valuations wouldn't pass our own "crazy" test.</li>
<li>
Low leverage, decent growth. At the moment, this company is basically debt free, but we expect them to borrow a small minority (20%) to finance the capex plans of Bt153m next year, which is large for a company of this size. They should be able to grow at an average growth rate of 13% over the next three year while settling at closer to 1% during the terminal period.</li>
<li>
Ties to the past. This company is essentially a spinoff from ACAP, a subprime lender we highlighted in <a href="https://www.smartkarma.com/insights/swimming-with-the-loan-sharks" target="_blank" data-smartkarma-citation="insights:7079">Swimming with the Loan Sharks</a>
</li>
<li>
Key risk factors includes: 1) customer concentration risk; 2) in-sourcing trend; 3) office lease continuity; and 4) natural disasters.</li>
</ul>

For this month, we highlight the upcoming IPO of GSC, which will be the second call center company in Thailand to ever be properly listed. Firm underwritten by Finnex, there are a couple of interesting points to note about this company:

Estimated valuations. We estimate the IPO price of Bt3.6/sh, assuming the same PE as OTO, its only comparable in Thailand. We would have preferred DCF, but judging from the low profits and cashflows, the valuations wouldn't pass our own "crazy" test.

Low leverage, decent growth. At the moment, this company is basically debt free, but we expect them to borrow a small minority (20%) to finance the capex plans of Bt153m next year, which is large for a company of this size. They should be able to grow at an average growth rate of 13% over the next three year while settling at closer to 1% during the terminal period.

Ties to the past. This company is essentially a spinoff from ACAP, a subprime lender we highlighted in Swimming with the Loan Sharks


Key risk factors includes: 1) customer concentration risk; 2) in-sourcing trend; 3) office lease continuity; and 4) natural disasters.


IPO Radar: GSC, Thailand's Second Call Center Listing

Thailand

Global Service Center Group Limited Partnership.

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