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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.</li>
<li>An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an 'Administrative Issue'. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.</li>
<li>Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.</li>
</ul>


Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.
An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an 'Administrative Issue'. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.
Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.


Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown

<ul>
<li>The market cap review period for the June rebalance 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> starts in a couple of weeks.</li>
<li>Using the last close, we see <a href="https://www.smartkarma.com/entities/jmt-network-services-pcl" target="_blank" data-smartkarma-citation="entities:8581:1" rel="noopener">JMT Network Services (JMT)</a> and <a href="https://www.smartkarma.com/entities/bangkok-life-assurance-pcl" target="_blank" data-smartkarma-citation="entities:16237:1" rel="noopener">Bangkok Life Assurance (BLA)</a> as potential inclusions, replacing <a href="https://www.smartkarma.com/entities/ratch-group-pcl" target="_blank" data-smartkarma-citation="entities:15338:1" rel="noopener">Ratch Group PCL (RATCH TB)</a> and <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>.</li>
<li>
<a href="https://www.smartkarma.com/entities/ratch-group-pcl" target="_blank" data-smartkarma-citation="entities:15338:1" rel="noopener">Ratch Group PCL</a> is the lowest ranked index constituent and needs to move 15% higher to avoid deletion. Passive trackers will need to sell nearly 4 days of ADV.</li>
</ul>


The market cap review period for the June rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) starts in a couple of weeks.
Using the last close, we see JMT Network Services (JMT) and Bangkok Life Assurance (BLA) as potential inclusions, replacing Ratch Group PCL (RATCH TB) and KCE Electronics PCL (KCE TB).

Ratch Group PCL is the lowest ranked index constituent and needs to move 15% higher to avoid deletion. Passive trackers will need to sell nearly 4 days of ADV.


SET50 Index Rebalance Preview (June): Two Changes, Maybe Three

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

Thai Airways International / Equity Bottom-Up

Five interesting news/development we noticed recently that may affect Thai equities include:<ul>
<li>
Sayonara to Thai retail. Japanese retailer Isetan announces plans to leave Thailand after 28 years. Max Valu, a unit of  financier AEONTS, also plans to close down 20 of its Tanjai stores.</li>
<li>
The government announces a Bt54bn bailout of Thai Airways, but quickly runs into a slew of problems with the union, the company's operating loss, and multiple critics.</li>
<li>
Singha's Machida teams up with Bonchon to come up with a new flavor. Interestingly, they are the only brand still growing in 2019. </li>
<li>
Change of Guard. In the last few years, we noticed that a number of major business groups in Thailand have changed leadership either through deaths or retirement of their tycoons, including BEC, King Power, KBANK, LH, BDMS, and most recently Bangkok Land.</li>
<li>
JMART, Kookmin gets into credit cards with a new joint venture. The deal involves new share issuance and would dilute JMART's holdings in J Fintech.</li>
</ul>

Five interesting news/development we noticed recently that may affect Thai equities include:

Sayonara to Thai retail. Japanese retailer Isetan announces plans to leave Thailand after 28 years. Max Valu, a unit of  financier AEONTS, also plans to close down 20 of its Tanjai stores.

The government announces a Bt54bn bailout of Thai Airways, but quickly runs into a slew of problems with the union, the company's operating loss, and multiple critics.

Singha's Machida teams up with Bonchon to come up with a new flavor. Interestingly, they are the only brand still growing in 2019. 

Change of Guard. In the last few years, we noticed that a number of major business groups in Thailand have changed leadership either through deaths or retirement of their tycoons, including BEC, King Power, KBANK, LH, BDMS, and most recently Bangkok Land.

JMART, Kookmin gets into credit cards with a new joint venture. The deal involves new share issuance and would dilute JMART's holdings in J Fintech.


Snippets #40: Thai Airways Bailout, Tycoon Successions

Equity Capital Markets

Thailand ranks as one of the major MICE (meetings, incentives, conventions, exhibitions) in Southeast Asia after Singapore, so we are increasingly seeing exhibition-themed companies being listed. Next up is M Vision, the organizer of the Mobile Expo, which happens three times a year in Thailand. Unlike the auto exhibitors, this is only roughly half of their revenues, and their fastest growing revenue stream is in e-commerce, selling a lot of phones for Samsung via Lazada and 11Street.Assuming varying growth rates for their businesses (explained in this review) and a net margin of 10%, we arrive at a valuation of Bt1.3/sh for this upcoming IPO by small-ish underwriter Asset Pro. If we have capital at the time, we would be interested in joining assuming the indicative pricing comes in below this level. Granted, it is a really small IPO and will be done on the secondary MAI bourse, not the primary SET one.

Thailand ranks as one of the major MICE (meetings, incentives, conventions, exhibitions) in Southeast Asia after Singapore, so we are increasingly seeing exhibition-themed companies being listed. Next up is M Vision, the organizer of the Mobile Expo, which happens three times a year in Thailand. Unlike the auto exhibitors, this is only roughly half of their revenues, and their fastest growing revenue stream is in e-commerce, selling a lot of phones for Samsung via Lazada and 11Street.Assuming varying growth rates for their businesses (explained in this review) and a net margin of 10%, we arrive at a valuation of Bt1.3/sh for this upcoming IPO by small-ish underwriter Asset Pro. If we have capital at the time, we would be interested in joining assuming the indicative pricing comes in below this level. Granted, it is a really small IPO and will be done on the secondary MAI bourse, not the primary SET one.

IPO Radar: M Vision, The Guys Who Bought Us the Iconic Mobile Expo

With ROIs routinely exceeding 100%, Jaymart's debt collection subsidiary, <a href="https://www.smartkarma.com/entities/8581" target="_blank" data-smartkarma-citation="entities:8581:1">Jmt Network Services Pcl (JMT TB)</a>, became the market darling of its time. Of course, if you invested today, you are way behind the curve, but don't lose hope. CHAYO seems like a younger-day JMT clone, and that's why we're taking a look. This IPO may be a chance to get in on the same business at ground zero. We believe this company, which generates higher margins than JMT, should IPO somewhere between Bt1.2/sh to Bt2.5/sh, but it's more likely to be the upper side of the range. Assuming the underwriters (AEC) don't go crazy and price this thing at something way out of reach, we're all in on this IPO.

With ROIs routinely exceeding 100%, Jaymart's debt collection subsidiary, Jmt Network Services Pcl (JMT TB), became the market darling of its time. Of course, if you invested today, you are way behind the curve, but don't lose hope. CHAYO seems like a younger-day JMT clone, and that's why we're taking a look. This IPO may be a chance to get in on the same business at ground zero. We believe this company, which generates higher margins than JMT, should IPO somewhere between Bt1.2/sh to Bt2.5/sh, but it's more likely to be the upper side of the range. Assuming the underwriters (AEC) don't go crazy and price this thing at something way out of reach, we're all in on this IPO.

IPO Radar: CHAYO, the Next JMT (Debt Collection Biz)

Thailand

Jaymart Group Holdings Public Company Limited operates as a holding company, investing in other businesses. Its core business involves the retail and wholesale distribution of mobile phones, gadgets, IT products, and related items from major brands and telecommunication operators. Additionally, the company engages in financial services, debt collection and management, and property development through its subsidiaries. The company is headquartered in Bangkok, Thailand, and was founded on December 27, 1988.

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Jaymart Group (JMART TB)

Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

SET50 Index Rebalance Preview (June): Two Changes, Maybe Three

JMT and BLA could replace RATCH and KCE in the SET50 index at the June rebalance. There could be an adhoc change if the DTAC/TRUE merger is...

Brian Freitas

Snippets #40: Thai Airways Bailout, Tycoon Successions

Five interesting news/development we noticed recently that may affect Thai equities include: Sayonara to Thai retail. Japanese retailer Isetan...

Athaporn Arayasantiparb, CFA

IPO Radar: M Vision, The Guys Who Bought Us the Iconic Mobile Expo

Thailand ranks as one of the major MICE (meetings, incentives, conventions, exhibitions) in Southeast Asia after Singapore, so we are increasingly...

Athaporn Arayasantiparb, CFA

IPO Radar: CHAYO, the Next JMT (Debt Collection Biz)

With ROIs routinely exceeding 100%, Jaymart's debt collection subsidiary, Jmt Network Services Pcl (JMT TB), became the market darling of its time....

Athaporn Arayasantiparb, CFA

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52-week Range

Market Cap (USDm)

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