Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>The SET Index is expected to move sideways, with the resistance at 1,650/1,666 points and the support at 1,627/1,613 points.</li><li>We recommend trading buy on SABUY, PTG and CPN.</li><li>Technically, there is a signal for a further increase in the index, with the next target at 1,666 points, after it hit a higher high yesterday; the loss-stopping point would be at 1,627 points (10-day EMA).</li></ul>

The SET Index is expected to move sideways, with the resistance at 1,650/1,666 points and the support at 1,627/1,613 points.We recommend trading buy on SABUY, PTG and CPN.Technically, there is a signal for a further increase in the index, with the next target at 1,666 points, after it hit a higher high yesterday; the loss-stopping point would be at 1,627 points (10-day EMA).

Technical Analysis: Recommendation: Selective Speculation

<ul><li>We again raise PSL's earnings in 2021-22E to factor in the upward revision to the firm's TC rate owing to the brightening prospects of the BDI, which will enter the high season in 4Q.</li><li>We expect PSL to report a net profit of Bt836mn in 2Q21E, including FX gain of Bt100mn.</li><li>The BDI closed at 3,103 points yesterday, down from closing at 3,383 points at the end of June, likely repeating the historical seasonal pattern.</li></ul>

We again raise PSL's earnings in 2021-22E to factor in the upward revision to the firm's TC rate owing to the brightening prospects of the BDI, which will enter the high season in 4Q.We expect PSL to report a net profit of Bt836mn in 2Q21E, including FX gain of Bt100mn.The BDI closed at 3,103 points yesterday, down from closing at 3,383 points at the end of June, likely repeating the historical seasonal pattern.

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

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 <div class='content-caption'>GEAR- CIO</div>
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Just as American actor and director Morgan Freeman once famously said, “Challenge yourself - it's the only path which leads to growth”, investment specialist Mark Zhou strives to live life outside his comfort zone. 
To spur personal development, it’s also essential to keep an open mind and heart, said the Executive Director and Chief Investment Officer (CIO) of SGX-listed Golden Energy and Resources Ltd (GEAR). 
“It’s vital for us to constantly challenge ourselves, and operate outside our comfort zones. This generates growing pains, yes, but they are instrumental to our progress and maturity,” Zhou noted. 
“With open minds, we will never stop learning from all our experiences, conversations and interactions. With open hearts, we can build authentic relationships with stakeholders, partners and colleagues. Such efforts help us grow and improve.” 
This dovetails with GEAR’s core values and the transformation journey it has recently embarked upon - reinventing itself to maximise growth potential, Zhou added.  
“Although we are doing well organically with our energy coal operations, GEAR intentionally took steps to expand into counter-cyclical metals such as gold,” he pointed out. 
“This resulted in the metamorphosis of GEAR from an energy coal producer in Indonesia to a diversified resources company in Asia-Pacific, with a product portfolio that includes metallurgical coal and gold.” 
Zhou derives an immense sense of satisfaction from having seen this key strategic initiative of the Group from inception to fruition.  
“Demand in the energy sector is dynamic, and will continue to change. As such, it is important to be resource-relevant, stay nimble, and move in the right direction to capitalise on prevailing trends,” he added. 
Zhou, who holds a Bachelor of Business degree with a double major in Banking and Finance as well as Business Law from Singapore’s Nanyang Technological University, has more than a decade of senior management and investment banking experience. Prior to being appointed CIO of GEAR in February 2021, Zhou held CEO and CIO positions in Mainboard-listed PSL Holdings Ltd and Geo Energy Resources Ltd respectively.  
“Having an investment banking background and management experience in the resources industry has enabled me to contribute positively to GEAR, where together with our subsidiaries, we are listed on three stock exchanges - SGX, IDX and ASX,” he noted. 
“Harmonising the compliance with regulations of three stock exchanges with an active M&amp;A strategy is very much an art in itself!” Building Resilience 
Listed on SGX Mainboard in December 2016, GEAR is engaged in the exploration, mining and marketing of energy coal in Indonesia through its subsidiary PT Golden Energy Mines Tbk (GEMS), and metallurgical coal in Australia through its subsidiary Stanmore Coal. The Group raised its stake in Stanmore to 75.3% in May 2020 from an initial 19.9% interest held since December 2018. 
Thermal or energy coal has a lower energy content and higher moisture, and is used to generate electricity. Metallurgical, or coking coal, due to other inherent properties, is used to make metals such as iron and steel. 
GEAR also extended its product suite to include gold when it completed the acquisition of a 50% interest in Ravenswood Gold Mine in Queensland, Australia, in March 2020, via a 50:50 joint venture with EMR Capital. 
These efforts have helped the Group evolve into a more diversified entity, broadening its earnings base and reducing dependence on the core resource of energy coal. 
“Our strategy includes organic growth through production expansion as well as strategic investments in non-substitutable and non-energy coal commodities,” Zhou said. “This helps us build resiliency through commodity price cycles while maintaining a prudent financial policy.” 
“Our investment in Stanmore allows us to reduce reliance on energy coal mining, and our investment in gold - generally a countercyclical precious metal - helps diversify our exposure to coal price cycles,” he added. 
“Such investments also increase our presence in Australia, helping to diversify our operations geographically.” 
Over the years, GEAR has also demonstrated its resilience during bouts of low coal prices. “Our distinctive competitive edge comes from the ability to consistently maintain relatively low costs in coal production,” Zhou noted.  
“Incidentally, GEAR is widely recognised as one of the lowest cost producers of energy coal in Indonesia. Our strict control of production costs has ensured our continued profitability amidst periods of weak coal prices.” Sustainability Focus 
Despite the ongoing effects of the pandemic, global coal demand is expected to be supported by higher electricity generation needs and industrial output as China and other Asian economies step up efforts towards a gradual recovery. 
Chinese thermal coal imports are anticipated to remain robust in 2021, supported by tight domestic coal supplies ahead of the high-demand summer months and high local prices. Furthermore, following China’s political tensions with its second-largest supplier Australia, coal miners in Indonesia - where GEAR has operations - are expected to benefit from strong Chinese imports. 
While demand for metallurgical coal was adversely impacted by lower steel production due to the pandemic, this is expected to improve as global steelmakers restore production and kick-start industrial output. 
On the other hand, gold prices retreated in early 2021, following a record-breaking rally in 2020. Optimism over reopening economies and vaccine rollouts drove the US dollar and bond yields higher, reducing demand for the precious metal as a haven asset. Nonetheless, most analysts have forecast gold to hold above US$2,000/oz in 2021, as the US Federal Reserve maintains a loose monetary and fiscal policy. 
Meanwhile, COVID-19 has not disrupted the Group’s operations at its mining facilities. However, it has caused delays in exploration activities due to movement restrictions in Indonesia and Australia. 
“The pandemic has had no material impact on GEAR’s operations, and we displayed strong financial and operational results for FY2020,” Zhou said, pointing to the Group’s record revenue of US$1.2 billion for the year ended 31 December 2020, as net profit rose 4.8% to US$34.5 million. 
Nonetheless, the coal mining industry continues to grapple with challenges arising from the global push towards renewable energy. 
“In line with this, GEAR strives to be a globally diversified energy and resource company leading in innovation and sustainability. We continue to explore ways to ensure energy efficiency and reduce the environmental impact of our operations,” Zhou noted. 
“We uphold ESG guidelines and have performed considerably well on several fronts. For instance, the Group’s pH limits and metal content of effluents are below regulatory limits, while nitric oxide, sulphur dioxide and carbon monoxide emissions are much lower than regulatory limits.” 
Apart from its mining operations, GEAR is keeping an eye on the renewables industry. The Group has pumped US$4 million into a renewable energy fund that invests in solar photovoltaic systems in the target geographies of Taiwan, Japan and Australia. 
When Zhou isn’t focused on the day-to-day operations of the Group, he can be found with his son, nine, and two daughters, aged six and eight.  
“I always challenge my kids to show love to someone with a simple act of kindness,” said the 38-year-old. 
“We would never be able to walk a mile in someone else’s shoes, as all our journeys, backgrounds and circumstances are different. But with open hearts, we can extend friendships beyond boundaries or stereotypes, which are inherent in society, and make a difference in the lives of those around us.” Golden Energy and Resources Ltd

GEAR is principally engaged in the exploration, mining and marketing of metallurgical coal and gold in Australia, as well as energy coal in Indonesia. As at 31 December 2020, the Group’s subsidiary, Stanmore Coal, has coal resources estimates of 1.7 billion tonnes, marketable coal reserves estimates of 130.0 million tonnes and a coal handling preparation plant capacity of up to 3.5 million tonnes per annum. Its Indonesia subsidiary, PT Golden Energy Mines (GEMS), has more than 2.9 billion tonnes of energy coal resources and more than 1 billion tonnes of coal reserves. The Group has also extended its product suite to include gold via a 50% joint venture with EMR Capital in Ravenswood Gold. As of 31 December 2020, Ravenswood has 3.9 million ounces of gold resources and 2.6 million ounces of gold reserves.

The company website is: <a href="https://gear.com.sg/">gear.com.sg</a> 
Click <a href="https://www.sgx.com/securities/equities/AUE">here </a>for the company's StockFacts page. 
For the year ended 31 December 2020 financial results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/UPWW6BHE3A25PBJ0/650285_GEAR%20-%20FY2020%20News%20Release.pdf">here</a>. 
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="https://www.sgx.com/research-education/market-dialogues">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="https://www.sgx.com/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    GEAR- CIO


Just as American actor and director Morgan Freeman once famously said, “Challenge yourself - it's the only path which leads to growth”, investment specialist Mark Zhou strives to live life outside his comfort zone.  
To spur personal development, it’s also essential to keep an open mind and heart, said the Executive Director and Chief Investment Officer (CIO) of SGX-listed Golden Energy and Resources Ltd (GEAR).  
“It’s vital for us to constantly challenge ourselves, and operate outside our comfort zones. This generates growing pains, yes, but they are instrumental to our progress and maturity,” Zhou noted.  
“With open minds, we will never stop learning from all our experiences, conversations and interactions. With open hearts, we can build authentic relationships with stakeholders, partners and colleagues. Such efforts help us grow and improve.”  
This dovetails with GEAR’s core values and the transformation journey it has recently embarked upon - reinventing itself to maximise growth potential, Zhou added.   
“Although we are doing well organically with our energy coal operations, GEAR intentionally took steps to expand into counter-cyclical metals such as gold,” he pointed out.  
“This resulted in the metamorphosis of GEAR from an energy coal producer in Indonesia to a diversified resources company in Asia-Pacific, with a product portfolio that includes metallurgical coal and gold.”  
Zhou derives an immense sense of satisfaction from having seen this key strategic initiative of the Group from inception to fruition.   
“Demand in the energy sector is dynamic, and will continue to change. As such, it is important to be resource-relevant, stay nimble, and move in the right direction to capitalise on prevailing trends,” he added.  
Zhou, who holds a Bachelor of Business degree with a double major in Banking and Finance as well as Business Law from Singapore’s Nanyang Technological University, has more than a decade of senior management and investment banking experience. Prior to being appointed CIO of GEAR in February 2021, Zhou held CEO and CIO positions in Mainboard-listed PSL Holdings Ltd and Geo Energy Resources Ltd respectively.   
“Having an investment banking background and management experience in the resources industry has enabled me to contribute positively to GEAR, where together with our subsidiaries, we are listed on three stock exchanges - SGX, IDX and ASX,” he noted.  
“Harmonising the compliance with regulations of three stock exchanges with an active M&amp;A strategy is very much an art in itself!”  Building Resilience  
Listed on SGX Mainboard in December 2016, GEAR is engaged in the exploration, mining and marketing of energy coal in Indonesia through its subsidiary PT Golden Energy Mines Tbk (GEMS), and metallurgical coal in Australia through its subsidiary Stanmore Coal. The Group raised its stake in Stanmore to 75.3% in May 2020 from an initial 19.9% interest held since December 2018.  
Thermal or energy coal has a lower energy content and higher moisture, and is used to generate electricity. Metallurgical, or coking coal, due to other inherent properties, is used to make metals such as iron and steel.  
GEAR also extended its product suite to include gold when it completed the acquisition of a 50% interest in Ravenswood Gold Mine in Queensland, Australia, in March 2020, via a 50:50 joint venture with EMR Capital.  
These efforts have helped the Group evolve into a more diversified entity, broadening its earnings base and reducing dependence on the core resource of energy coal.  
“Our strategy includes organic growth through production expansion as well as strategic investments in non-substitutable and non-energy coal commodities,” Zhou said. “This helps us build resiliency through commodity price cycles while maintaining a prudent financial policy.”  
“Our investment in Stanmore allows us to reduce reliance on energy coal mining, and our investment in gold - generally a countercyclical precious metal - helps diversify our exposure to coal price cycles,” he added.  
“Such investments also increase our presence in Australia, helping to diversify our operations geographically.”  
Over the years, GEAR has also demonstrated its resilience during bouts of low coal prices. “Our distinctive competitive edge comes from the ability to consistently maintain relatively low costs in coal production,” Zhou noted.   
“Incidentally, GEAR is widely recognised as one of the lowest cost producers of energy coal in Indonesia. Our strict control of production costs has ensured our continued profitability amidst periods of weak coal prices.”  Sustainability Focus  
Despite the ongoing effects of the pandemic, global coal demand is expected to be supported by higher electricity generation needs and industrial output as China and other Asian economies step up efforts towards a gradual recovery.  
Chinese thermal coal imports are anticipated to remain robust in 2021, supported by tight domestic coal supplies ahead of the high-demand summer months and high local prices. Furthermore, following China’s political tensions with its second-largest supplier Australia, coal miners in Indonesia - where GEAR has operations - are expected to benefit from strong Chinese imports.  
While demand for metallurgical coal was adversely impacted by lower steel production due to the pandemic, this is expected to improve as global steelmakers restore production and kick-start industrial output.  
On the other hand, gold prices retreated in early 2021, following a record-breaking rally in 2020. Optimism over reopening economies and vaccine rollouts drove the US dollar and bond yields higher, reducing demand for the precious metal as a haven asset. Nonetheless, most analysts have forecast gold to hold above US$2,000/oz in 2021, as the US Federal Reserve maintains a loose monetary and fiscal policy.  
Meanwhile, COVID-19 has not disrupted the Group’s operations at its mining facilities. However, it has caused delays in exploration activities due to movement restrictions in Indonesia and Australia.  
“The pandemic has had no material impact on GEAR’s operations, and we displayed strong financial and operational results for FY2020,” Zhou said, pointing to the Group’s record revenue of US$1.2 billion for the year ended 31 December 2020, as net profit rose 4.8% to US$34.5 million.  
Nonetheless, the coal mining industry continues to grapple with challenges arising from the global push towards renewable energy.  
“In line with this, GEAR strives to be a globally diversified energy and resource company leading in innovation and sustainability. We continue to explore ways to ensure energy efficiency and reduce the environmental impact of our operations,” Zhou noted.  
“We uphold ESG guidelines and have performed considerably well on several fronts. For instance, the Group’s pH limits and metal content of effluents are below regulatory limits, while nitric oxide, sulphur dioxide and carbon monoxide emissions are much lower than regulatory limits.”  
Apart from its mining operations, GEAR is keeping an eye on the renewables industry. The Group has pumped US$4 million into a renewable energy fund that invests in solar photovoltaic systems in the target geographies of Taiwan, Japan and Australia.  
When Zhou isn’t focused on the day-to-day operations of the Group, he can be found with his son, nine, and two daughters, aged six and eight.   
“I always challenge my kids to show love to someone with a simple act of kindness,” said the 38-year-old.  
“We would never be able to walk a mile in someone else’s shoes, as all our journeys, backgrounds and circumstances are different. But with open hearts, we can extend friendships beyond boundaries or stereotypes, which are inherent in society, and make a difference in the lives of those around us.”   Golden Energy and Resources Ltd

GEAR is principally engaged in the exploration, mining and marketing of metallurgical coal and gold in Australia, as well as energy coal in Indonesia. As at 31 December 2020, the Group’s subsidiary, Stanmore Coal, has coal resources estimates of 1.7 billion tonnes, marketable coal reserves estimates of 130.0 million tonnes and a coal handling preparation plant capacity of up to 3.5 million tonnes per annum. Its Indonesia subsidiary, PT Golden Energy Mines (GEMS), has more than 2.9 billion tonnes of energy coal resources and more than 1 billion tonnes of coal reserves. The Group has also extended its product suite to include gold via a 50% joint venture with EMR Capital in Ravenswood Gold. As of 31 December 2020, Ravenswood has 3.9 million ounces of gold resources and 2.6 million ounces of gold reserves.

The company website is: gear.com.sg  
Click here for the company's StockFacts page.  
For the year ended 31 December 2020 financial results, click here.  
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.



Golden Energy and Resources: Mining Key Opportunities

<ul><li>CPW's 2020 results missed our expectation on a weak top line and GPM thanks to the adverse impact of the pandemic.</li><li>We revise down the 2021-2022E earnings to reflect the slow momentum of the economic recovery, despite the strong product lineup.</li><li>The current share price has limited upside to our new TP of Bt2.37, pegged with 2021E PER of 19x, leading us to downgrade our rating to Hold.</li></ul>

CPW's 2020 results missed our expectation on a weak top line and GPM thanks to the adverse impact of the pandemic.We revise down the 2021-2022E earnings to reflect the slow momentum of the economic recovery, despite the strong product lineup.The current share price has limited upside to our new TP of Bt2.37, pegged with 2021E PER of 19x, leading us to downgrade our rating to Hold.

<ul><li>We lift PSL's earnings in 2021-22E to factor in the potential better-than-expected TC rate in 2021E amid the favorable bulk ship demand-supply situation.</li><li>PSL delivered a net profit of Bt27mn in 4Q20, +5% YoY and improving from the net loss of Bt22mn in 3Q20, including FX loss of Bt30mn and other extra loss of Bt16mn (losses on settlement agreements and expected bad debt and doubtful accounts).</li><li>Given the stronger-than-expected BDI, BHSI and BSI in 1Q21, we decide to revise up PSL's net profit forecasts in 2021-22E by 24% and 19% from the previous expectations to Bt796mn and Bt1,093mn, based on the upward revisions of the TC rate in 2021E to USD12,200 (from USD12,000 previously) and in 2022E to USD13,200 (from USD13,000 previously).</li></ul>

We lift PSL's earnings in 2021-22E to factor in the potential better-than-expected TC rate in 2021E amid the favorable bulk ship demand-supply situation.PSL delivered a net profit of Bt27mn in 4Q20, +5% YoY and improving from the net loss of Bt22mn in 3Q20, including FX loss of Bt30mn and other extra loss of Bt16mn (losses on settlement agreements and expected bad debt and doubtful accounts).Given the stronger-than-expected BDI, BHSI and BSI in 1Q21, we decide to revise up PSL's net profit forecasts in 2021-22E by 24% and 19% from the previous expectations to Bt796mn and Bt1,093mn, based on the upward revisions of the TC rate in 2021E to USD12,200 (from USD12,000 previously) and in 2022E to USD13,200 (from USD13,000 previously).

Company Update Precious Shipping Plc. (PSL)

Singapore

PSL Holdings Limited is an investment holding company providing land and marine logistics and support services in Singapore and Indonesia. It engages in construction and infrastructure activities, trading and supply of construction materials, and real estate. The company was incorporated in 1997 and is headquartered in Singapore.

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PSL (PSL SP)

Technical Analysis: Recommendation: Selective Speculation

The SET Index is expected to move sideways, with the resistance at 1,650/1,666 points and the support at 1,627/1,613 points. We recommend trading...

Krungthai XSpring

Precious Shipping Plc. (PSL)

We again raise PSL's earnings in 2021-22E to factor in the upward revision to the firm's TC rate owing to the brightening prospects of the BDI,...

Krungthai XSpring

Golden Energy and Resources: Mining Key Opportunities

Just as American actor and director Morgan Freeman once famously said, “Challenge yourself - it's the only path which leads to...

Singapore Exchange Ltd (SGX)

2020 Earnings Below Forecast

CPW's 2020 results missed our expectation on a weak top line and GPM thanks to the adverse impact of the pandemic. We revise down the 2021-2022E...

Krungthai XSpring

Company Update Precious Shipping Plc. (PSL)

We lift PSL's earnings in 2021-22E to factor in the potential better-than-expected TC rate in 2021E amid the favorable bulk ship demand-supply...

Krungthai XSpring

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