Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/179/974/original/BANNER-TTOtherDec20_GreyOrange.png?1608781028" class="editor-image img-responsive" data-smartkarma-image-id="179974"></figure></section><p>In a previous note we argued <a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a>, at its IPO price of 28 baht per share, was attractively priced relative to comps in the Chinese express sector.</p><p>However, after shares jumped 83% to 51.25 baht in their trading debut on December 24, KEX's EV/Revenue and EV/EBITDA multiples increased substantially (even as its Chinese comps faded).</p><p>A day after its public debut, KEX is still a unique Thai play on eCommerce and the company enjoys strong market position in a growing segment. However, at 50+ baht per share it is no longer cheap.</p><p>By the way, Merry Christmas!</p>

In a previous note we argued Kerry Express Thailand (KEX TB), at its IPO price of 28 baht per share, was attractively priced relative to comps in the Chinese express sector.However, after shares jumped 83% to 51.25 baht in their trading debut on December 24, KEX's EV/Revenue and EV/EBITDA multiples increased substantially (even as its Chinese comps faded).A day after its public debut, KEX is still a unique Thai play on eCommerce and the company enjoys strong market position in a growing segment. However, at 50+ baht per share it is no longer cheap.By the way, Merry Christmas!

Kerry Express Thailand: Just One Day Into Public Life, KEX Suddenly Looks Expensive

<p>In an updated filing, <a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a> indicated it could sell as many as 300 mn new shares in its planned IPO. Many media reports have suggested the company hopes to raise about US$300 mn in the offering, suggesting KEX will come to market at around 30 baht per share.</p><p>In this note, we try to answer the following questions regarding KEX's valuation:</p><ul>
<li>What are the most useful 'comps' for KEX? </li>
<li>What are some appropriate valuation multiples to use in comparing KEX to peers?</li>
<li>How does KEX's valuation at 30 baht per share compare to the peer group we've identified?</li>
<li>What factors could support either a premium or discount valuation for KEX versus peers?</li>
</ul><p>At 30 baht per share (which implies market capitalization of US$1.7 bn), KEX would <em>not</em> be overvalued relative to peers, in our view, and there are reasons KEX could eventually demand a premium valuation relative to other express companies.</p>

In an updated filing, Kerry Express Thailand (KEX TB) indicated it could sell as many as 300 mn new shares in its planned IPO. Many media reports have suggested the company hopes to raise about US$300 mn in the offering, suggesting KEX will come to market at around 30 baht per share.In this note, we try to answer the following questions regarding KEX's valuation:
What are the most useful 'comps' for KEX? 
What are some appropriate valuation multiples to use in comparing KEX to peers?
How does KEX's valuation at 30 baht per share compare to the peer group we've identified?
What factors could support either a premium or discount valuation for KEX versus peers?
At 30 baht per share (which implies market capitalization of US$1.7 bn), KEX would not be overvalued relative to peers, in our view, and there are reasons KEX could eventually demand a premium valuation relative to other express companies.

Kerry Express Thailand (KEX) IPO: Approach to Valuation

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

<p>For this next session of our Corporate Webinars, we are joined by the CEO of <a href="https://www.smartkarma.com/entities/precious-shipping-pcl" target="_blank" data-smartkarma-citation="entities:13819:1" rel="noopener">Precious Shipping (PSL TB)</a>, Khalid Hashim, who will present some key aspects about the company and engage in a fireside chat with Smartkarma Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a>.</p>
<div>
<p>Every week, Corporate Webinars by <a href="https://www.smartkarma.com/home/corporate-solutions/" target="_blank" rel="noopener">Smartkarma Corporate Solutions</a> feature discussions with Corporate IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.</p>
<h3>This Corporate Webinar will be hosted on Tuesday, 17/November/2020, 5:00PM SGT/HKT, 4:00PM ICT.</h3>
<div class="content-highlight">
<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=83678405749" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
</div>
</div>

For this next session of our Corporate Webinars, we are joined by the CEO of Precious Shipping (PSL TB), Khalid Hashim, who will present some key aspects about the company and engage in a fireside chat with Smartkarma Insight Provider Angus Mackintosh.

Every week, Corporate Webinars by Smartkarma Corporate Solutions feature discussions with Corporate IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.
This Corporate Webinar will be hosted on Tuesday, 17/November/2020, 5:00PM SGT/HKT, 4:00PM ICT.

Register for the Webinar here



Smartkarma Corporate Webinar | Shipping: The Impact of COVID-19 and PSL’s Response

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).

<p>We first heard about this for the first time when the same tycoon (Nishita Shah Federbush) who controls <a href="https://www.smartkarma.com/entities/17462" target="_blank" data-smartkarma-citation="entities:17462:1">Mega Lifesciences (MEGA TB)</a>, a top five global generics drug maker, also has a big chunk of this stock in her family portfolio. Four takeaways from the meeting:</p><ul>
<li>Flat earnings despite 20% growth at revenue and EBITDA level due to increased depreciation;</li>
<li>Additional 150 ton/day capacity following the <strong>acquisition of </strong><strong>Saraburi Quick Lime, </strong>adding Bt20-30m in EBITDA annually. On top of this, the company is still expanding capacity as well as overseas market presence in Asia (CMLV, Taiwan, Korea).</li>
<li>Introduce key shareholders apart from GBuP (G Premji) Group of India, namely Belgian global technology leader Carmeuse.</li>
<li>Burgeoning equipment business for both flare cleansing for exports to Japan/Singapore as well as EOD furnaces for internal use.</li>
</ul>

We first heard about this for the first time when the same tycoon (Nishita Shah Federbush) who controls Mega Lifesciences (MEGA TB), a top five global generics drug maker, also has a big chunk of this stock in her family portfolio. Four takeaways from the meeting:
Flat earnings despite 20% growth at revenue and EBITDA level due to increased depreciation;
Additional 150 ton/day capacity following the acquisition of Saraburi Quick Lime, adding Bt20-30m in EBITDA annually. On top of this, the company is still expanding capacity as well as overseas market presence in Asia (CMLV, Taiwan, Korea).
Introduce key shareholders apart from GBuP (G Premji) Group of India, namely Belgian global technology leader Carmeuse.
Burgeoning equipment business for both flare cleansing for exports to Japan/Singapore as well as EOD furnaces for internal use.


SUTHA: Growing Quick Lime Via Acquisitions & Expansion

<p>The other four new tycoons on Forbes are more difficult to group, because they come from such diverse set of industries. I guess we could pretty much call them industrialists, which is a pretty broad word too. There are other interesting things about this list. The two first ones (richer that is) are women, and the two guys on this list underwent several tough years in their commodities business, which is a bit of a surprise that they emerged. Don't count on the list being the same next year!</p><table class="table table-striped"><tbody>
<tr>
</tr>
</tbody></table>…

The other four new tycoons on Forbes are more difficult to group, because they come from such diverse set of industries. I guess we could pretty much call them industrialists, which is a pretty broad word too. There are other interesting things about this list. The two first ones (richer that is) are women, and the two guys on this list underwent several tough years in their commodities business, which is a bit of a surprise that they emerged. Don't count on the list being the same next year!


…

Little Thai-Coons of 2018 (Part 2): The New Industrialists

Thailand

Precious Shipping is a Thailand-based ship-owner providing global dry-bulk transportation services. The company operates dry bulk ships on a tramp shipping basis, employing its vessels on both time and voyage charters, and handles cargoes such as cement, agricultural products, steel, fertilizers, ores, coal, and logs. It was founded in 1989 and is headquartered in Bangkok, Thailand.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Precious Shipping (PSL TB)

Kerry Express Thailand: Just One Day Into Public Life, KEX Suddenly Looks Expensive

After it jumped by 83% to 51.25 baht per share in its trading debut, it's suddenly much tougher to argue that KEX is attractively priced versus peers.

Tracking Traffic

Kerry Express Thailand (KEX) IPO: Approach to Valuation

What's the right valuation approach to Kerry Express (KEX), which hopes to complete its IPO in Thailand in the coming weeks?

Tracking Traffic

Smartkarma Corporate Webinar | Shipping: The Impact of COVID-19 and PSL’s Response

Tune in on 17 November, 5PM SGT/4PM ICT to hear from the CEO of Precious Shipping, Khalid Hashim, on the impact of COVID-19 on shipping and how his...

Smartkarma Research

SUTHA: Growing Quick Lime Via Acquisitions & Expansion

We first heard about this for the first time when the same tycoon (Nishita Shah Federbush) who controls Mega Lifesciences (MEGA TB), a top five...

Athaporn Arayasantiparb, CFA

Little Thai-Coons of 2018 (Part 2): The New Industrialists

The other four new tycoons on Forbes are more difficult to group, because they come from such diverse set of industries. I guess we could pretty...

Athaporn Arayasantiparb, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)