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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

Asset World Corporation / Index Rebalance

<p>Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> with the changes taking effect after the close of trading on 30 June.</p><p><a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a>, <a href="https://www.smartkarma.com/entities/kce-electronics-pcl" target="_blank" data-smartkarma-citation="entities:1892:1" rel="noopener">KCE Electronics PCL (KCE TB)</a>, <a href="https://www.smartkarma.com/entities/sri-trang-agro-industry-pcl" target="_blank" data-smartkarma-citation="entities:2759:1" rel="noopener">Sri Trang Agro Industry (STA TB)</a> and <a href="https://www.smartkarma.com/entities/sri-trang-gloves-thailand-public-company-limited" target="_blank" data-smartkarma-citation="entities:29141:1" rel="noopener">Sri Trang Gloves (Thailand) Public Company Limited (STGT TB)</a> have been added to the index, replacing <a href="https://www.smartkarma.com/entities/asset-world-corp-pcl" target="_blank" data-smartkarma-citation="entities:28136:1" rel="noopener">Asset World Corporation (AWC TB)</a>, <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/toa-paint-thailand-pcl" target="_blank" data-smartkarma-citation="entities:24235:1" rel="noopener">TOA Paint (Thailand) (TOA TB)</a> and <a href="https://www.smartkarma.com/entities/vgi-pcl" target="_blank" data-smartkarma-citation="entities:12409:1" rel="noopener">VGI PCL (VGI TB)</a>.</p><p><a href="https://www.smartkarma.com/entities/asset-world-corp-pcl" target="_blank" data-smartkarma-citation="entities:28136:1" rel="noopener">Asset World Corporation (AWC TB)</a> and <a href="https://www.smartkarma.com/entities/toa-paint-thailand-pcl" target="_blank" data-smartkarma-citation="entities:24235:1" rel="noopener">TOA Paint (Thailand) (TOA TB)</a> are deletes on liquidity. We had <a href="https://www.smartkarma.com/entities/asset-world-corp-pcl" target="_blank" data-smartkarma-citation="entities:28136:1" rel="noopener">Asset World Corporation (AWC TB)</a> just about passing the liquidity test, while the SET sees it as failing the test.</p><p><a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a> was deleted from the index at the December 2020 rebalance and has gained 8.6% since then, while <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> was included in the index at the same review and has lost 11.4% since then.</p><p>One-way turnover for the rebalance is 2.86%. The impact of passive fund trading on the deletions is expected to be a lot higher than that on the inclusions.</p><p>With <a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a> shareholders meeting for their EGM on 25 June, the tender offer for <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a> should be approved. <a href="https://www.smartkarma.com/entities/banpu-public-co-ltd" target="_blank" data-smartkarma-citation="entities:15363:1" rel="noopener">Banpu Public (BANPU TB)</a> is the frontrunner to join the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> once the <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a> tender offer is complete and the free float drops below 20%.</p>

Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) with the changes taking effect after the close of trading on 30 June.IRPC PCL (IRPC TB), KCE Electronics PCL (KCE TB), Sri Trang Agro Industry (STA TB) and Sri Trang Gloves (Thailand) Public Company Limited (STGT TB) have been added to the index, replacing Asset World Corporation (AWC TB), Bangkok Commercial Asset Management (BAM TB), TOA Paint (Thailand) (TOA TB) and VGI PCL (VGI TB).Asset World Corporation (AWC TB) and TOA Paint (Thailand) (TOA TB) are deletes on liquidity. We had Asset World Corporation (AWC TB) just about passing the liquidity test, while the SET sees it as failing the test.IRPC PCL (IRPC TB) was deleted from the index at the December 2020 rebalance and has gained 8.6% since then, while Bangkok Commercial Asset Management (BAM TB) was included in the index at the same review and has lost 11.4% since then.One-way turnover for the rebalance is 2.86%. The impact of passive fund trading on the deletions is expected to be a lot higher than that on the inclusions.With Gulf Energy Development Public Company (GULF TB) shareholders meeting for their EGM on 25 June, the tender offer for Intouch Holdings (INTUCH TB) should be approved. Banpu Public (BANPU TB) is the frontrunner to join the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) once the Intouch Holdings (INTUCH TB) tender offer is complete and the free float drops below 20%.

SET50 June Index Rebalance: Four Changes Announced; One More Coming Up Soon

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

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<p><strong>We maintained HOLD rating with new 2022E target price at Bt52.50, (up 13% from Bt46.50), derived from 18.5xPE’22E, which is +1SD of its 3-year trading average.</strong></p><div>• HANA recurring profit was Bt412m (-16%YoY, -6%QoQ). The shortfall in YoY performance was due to high profitability base in 1Q20, given Baht weakness. The QoQ hiccup came from higher SG&amp;A expenses.</div><div></div><div>• There is strong demand for electronic components from automotive, cloud computing, 5G related, industrial and consumer electronic industries.</div><div></div><div>• However, the benefit from the solid demand should be limited by raw material shortage, particularly chip.</div><div></div><div>• HANA disclosed its plan to enter power management and Silicon Carbide (SiC) business, which has high growth, driven by EV industry.</div><div></div><div>• We think development in power management and SiC should be rerating catalyst for the stock, thus we upgraded our target price.</div>

We maintained HOLD rating with new 2022E target price at Bt52.50, (up 13% from Bt46.50), derived from 18.5xPE’22E, which is +1SD of its 3-year trading average.• HANA recurring profit was Bt412m (-16%YoY, -6%QoQ). The shortfall in YoY performance was due to high profitability base in 1Q20, given Baht weakness. The QoQ hiccup came from higher SG&amp;A expenses.• There is strong demand for electronic components from automotive, cloud computing, 5G related, industrial and consumer electronic industries.• However, the benefit from the solid demand should be limited by raw material shortage, particularly chip.• HANA disclosed its plan to enter power management and Silicon Carbide (SiC) business, which has high growth, driven by EV industry.• We think development in power management and SiC should be rerating catalyst for the stock, thus we upgraded our target price.

HANA: Benefit from Strong Demand Could Be Limited by Chip Shortage

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Dr. Andrew Stotz, CFA

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We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai market to try to find interesting ideas base upon Fundamentals or Valuation or Momentum or Risk or some combination thereof.

The Stocks to Own in Thailand – Vol. 31

<section><div id="ember1644"><div><p>We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai market to try to find interesting ideas base upon Fundamentals or Valuation or Momentum or Risk or some combination thereof.</p></div></div></section>

The Stocks to Own in Thailand – Vol. 30

<p>We maintain HOLD rating for HANA with a new 2021E target price of Bt38.50, derived from 13.8xPE’21E, which is +0.5 SD of its 5-year trading average. While we believe its earnings will expand in 2021E, the stock price seems to priced in, spiked to a pre-trade war level in 2018. We attended an analyst meeting yesterday and came up with key information as followed;</p><div>•HANA 2Q20 recurring profit was Bt487m (+12%YoY, Flat QoQ), better than the previous company’s estimation, as an impact from Covid-19 was quite manageable.</div><div></div><div>•The negative impact on revenue from Covid-19 should have bottomed out. Its revenue will recover from 3Q20E onwards.</div><div></div><div>•However, the margin in 3Q20E should be softer than 1H20, as Baht currency has appreciated, recently, compared to a depreciation trend in the first half.</div><div></div><div>•We revised up 2020-22E earning by 63%, 18%, and 6%, respectively.</div><div></div><div>
<p><strong>Background</strong>: Hana Microelectronics Public Company Limited is an electronics manufacturing service provider. The company's main product groups include 1) printed circuit board assembly (PCBA); 2) integrated circuit (IC) assembly and testing, and 3) microdisplay assembly. Currently, the company has six manufacturing facilities, which are located in Lamphun and Ayutthaya provinces in Thailand, Jiaxing in China, Ohio in the US, and a new plant in Koh Kong, Cambodia.</p>
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We maintain HOLD rating for HANA with a new 2021E target price of Bt38.50, derived from 13.8xPE’21E, which is +0.5 SD of its 5-year trading average. While we believe its earnings will expand in 2021E, the stock price seems to priced in, spiked to a pre-trade war level in 2018. We attended an analyst meeting yesterday and came up with key information as followed;•HANA 2Q20 recurring profit was Bt487m (+12%YoY, Flat QoQ), better than the previous company’s estimation, as an impact from Covid-19 was quite manageable.•The negative impact on revenue from Covid-19 should have bottomed out. Its revenue will recover from 3Q20E onwards.•However, the margin in 3Q20E should be softer than 1H20, as Baht currency has appreciated, recently, compared to a depreciation trend in the first half.•We revised up 2020-22E earning by 63%, 18%, and 6%, respectively.
Background: Hana Microelectronics Public Company Limited is an electronics manufacturing service provider. The company's main product groups include 1) printed circuit board assembly (PCBA); 2) integrated circuit (IC) assembly and testing, and 3) microdisplay assembly. Currently, the company has six manufacturing facilities, which are located in Lamphun and Ayutthaya provinces in Thailand, Jiaxing in China, Ohio in the US, and a new plant in Koh Kong, Cambodia.



Thailand

Hana Microelectronics Public Company Limited is an electronics manufacturing service company.  The Company manufactures electronic components on behalf of its customers for shipment to them or their customers.

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Hana Microelectronics (HANA TB)

SET50 June Index Rebalance: Four Changes Announced; One More Coming Up Soon

There are 4 changes to the SET50 index with IRPC, KCE, STA & STGT replacing AWC, BAM, TOA & VGI. BANPU could be included in the next couple of...

Brian Freitas

HANA: Benefit from Strong Demand Could Be Limited by Chip Shortage

We maintained HOLD rating with new 2022E target price at Bt52.50, (up 13% from Bt46.50), derived from 18.5xPE’22E, which is +1SD of its 3-year...

Pi Securities PCL, Thailand

The Stocks to Own in Thailand – Vol. 31

We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai...

A. Stotz Investment Research

The Stocks to Own in Thailand – Vol. 30

We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai...

A. Stotz Investment Research

HANA: Covid-19 Impact Has Passed

We maintain HOLD rating for HANA with a new 2021E target price of Bt38.50, derived from 13.8xPE’21E, which is +0.5 SD of its 5-year trading...

Pi Securities PCL, Thailand

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