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

For this week, we visited two companies which are already in our portfolio: 1)  TKS, one of the small cap stocks where we have one of our largest positions, and 2) <a href="https://www.smartkarma.com/entities/11778" target="_blank" data-smartkarma-citation="entities:11778:1">Somboon Advance Technology P (SAT TB)</a>, one of the best performing auto stocks in Thailand. Somboon Advance is a recurring theme in The Autobot Update. Their big customers include Toyota and Mitsubishi. It's also the best performing stock in our portfolio, up 64% since we first bought it a few years ago. TKS hasn't had quite a stellar…

For this week, we visited two companies which are already in our portfolio: 1)  TKS, one of the small cap stocks where we have one of our largest positions, and 2) Somboon Advance Technology P (SAT TB), one of the best performing auto stocks in Thailand. Somboon Advance is a recurring theme in The Autobot Update. Their big customers include Toyota and Mitsubishi. It's also the best performing stock in our portfolio, up 64% since we first bought it a few years ago. TKS hasn't had quite a stellar…

Small Cap Diary: TKS and the Anti-Tesla Play

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

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A. Stotz Investment Research

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Somboon Advance Technology / Equity Bottom-Up

<ul><li>Low core profit valuation, good growth in core profit, and low volatility in earnings relative to its sector</li><li>SAT’s sales should grow in 2018 supported by continued growing demand in the auto sector from new models and in agricultural machinery exports, domestic production up by 2% and 12% respectively in 2017</li><li>Gross margin expansion should continue from increased automation in the production, gross margin improved by about 70bps in 2017 YoY</li><li>Attractive at 18CE* 9.2% ROE/PB versus the sector at 3.5%, is net cash and offers an attractive 3.7% dividend yield</li><li>Slow recovery of auto industry and domestic purchasing power</li></ul>* Consensus Estimates

Low core profit valuation, good growth in core profit, and low volatility in earnings relative to its sectorSAT’s sales should grow in 2018 supported by continued growing demand in the auto sector from new models and in agricultural machinery exports, domestic production up by 2% and 12% respectively in 2017Gross margin expansion should continue from increased automation in the production, gross margin improved by about 70bps in 2017 YoYAttractive at 18CE* 9.2% ROE/PB versus the sector at 3.5%, is net cash and offers an attractive 3.7% dividend yieldSlow recovery of auto industry and domestic purchasing power* Consensus Estimates

SAT: Increased Automation to Expand Margin

In addition to crunching the industry numbers provided to us by Toyota, we also visited Thai Rung. Thai Rung is one of the smallest and least profitable of the auto stocks, though they seem to have finally turned a corner in this quarter. The company has joint ventures with Japanese firms Kogyo and Kyowa to build seats and car cabins, and they supply Isuzu for the export markets and Tata domestically. In 2017, Thai car exports shrank for the first time, primarily due to high base effects in…

In addition to crunching the industry numbers provided to us by Toyota, we also visited Thai Rung. Thai Rung is one of the smallest and least profitable of the auto stocks, though they seem to have finally turned a corner in this quarter. The company has joint ventures with Japanese firms Kogyo and Kyowa to build seats and car cabins, and they supply Isuzu for the export markets and Tata domestically. In 2017, Thai car exports shrank for the first time, primarily due to high base effects in…

The Autobot Update (March): Riding on the Big Boy's Coattails

<ul><li>Low core profit valuation and share price is less volatile relative to its sector</li><li>Recovering automotive sector in Thailand, with new models launched by Nissan, Honda, Mazda and others supporting future growth</li><li>The JV with Mubea Engineering AG should increase SAT’s ASEAN market share in coil spring products in the long run</li><li>Attractive at 18CE* 8.0% ROE/PB versus the sector at 3.4%, is net cash and offers an attractive 3.2% dividend yield</li><li>Risks: Weaker than expected demand for axle shafts and potential for fewer orders from Toyota and Kubota</li></ul>

Low core profit valuation and share price is less volatile relative to its sectorRecovering automotive sector in Thailand, with new models launched by Nissan, Honda, Mazda and others supporting future growthThe JV with Mubea Engineering AG should increase SAT’s ASEAN market share in coil spring products in the long runAttractive at 18CE* 8.0% ROE/PB versus the sector at 3.4%, is net cash and offers an attractive 3.2% dividend yieldRisks: Weaker than expected demand for axle shafts and potential for fewer orders from Toyota and Kubota

SAT (SAT TB): Thai Auto Recovery and New JV Should Drive Growth

<ul><li>Low core profit valuation, share price is less volatile, and cheap on a gross profit basis relative to its sector </li><li>SAT entered into JV with Mubea Engineering AG aimed to increase its ASEAN market share in coil spring products in the long run </li><li>Recovering automotive sector in Thailand, with new models launched by Nissan, Honda, Mazda and others supporting future growth </li><li>Attractive at 17CE* 10.2% ROE/PB versus the sector at 3.7%, offers a solid balance sheet and an attractive 4.2% dividend yield </li><li>Risks: Weaker than expected demand for axle shafts and potential for fewer orders from Toyota and Kubota</li></ul>* Consensus Estimates

Low core profit valuation, share price is less volatile, and cheap on a gross profit basis relative to its sector SAT entered into JV with Mubea Engineering AG aimed to increase its ASEAN market share in coil spring products in the long run Recovering automotive sector in Thailand, with new models launched by Nissan, Honda, Mazda and others supporting future growth Attractive at 17CE* 10.2% ROE/PB versus the sector at 3.7%, offers a solid balance sheet and an attractive 4.2% dividend yield Risks: Weaker than expected demand for axle shafts and potential for fewer orders from Toyota and Kubota* Consensus Estimates

SAT: New JV Should Grow ASEAN Market Share in Coil Springs

Thailand

Somboon Advance Technology is a holding company with subsidiaries that manufacture automotive and agricultural machinery parts. The company's products include axle shafts, disc brakes, drum brakes, and hub wheels for passenger cars, pickup trucks, and agricultural machinery. It was founded on September 14, 1995, and is headquartered in Samut Prakan, Thailand.

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Somboon Advance Technology (SAT TB)

Small Cap Diary: TKS and the Anti-Tesla Play

For this week, we visited two companies which are already in our portfolio: 1) TKS, one of the small cap stocks where we have one of our largest...

Athaporn Arayasantiparb, CFA

SAT: Increased Automation to Expand Margin

Low core profit valuation, good growth in core profit, and low volatility in earnings relative to its sector SAT’s sales should grow in 2018...

A. Stotz Investment Research

The Autobot Update (March): Riding on the Big Boy's Coattails

In addition to crunching the industry numbers provided to us by Toyota, we also visited Thai Rung. Thai Rung is one of the smallest and least...

Athaporn Arayasantiparb, CFA

SAT (SAT TB): Thai Auto Recovery and New JV Should Drive Growth

Low core profit valuation and share price is less volatile relative to its sector Recovering automotive sector in Thailand, with new models...

A. Stotz Investment Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Small Cap Diary: TKS and the Anti-Tesla Play

For this week, we visited two companies which are already in our portfolio: 1) TKS, one of the small cap stocks where we have one of our largest...

Athaporn Arayasantiparb, CFA

SAT: Increased Automation to Expand Margin

Low core profit valuation, good growth in core profit, and low volatility in earnings relative to its sector SAT’s sales should grow in 2018...

A. Stotz Investment Research

The Autobot Update (March): Riding on the Big Boy's Coattails

In addition to crunching the industry numbers provided to us by Toyota, we also visited Thai Rung. Thai Rung is one of the smallest and least...

Athaporn Arayasantiparb, CFA

SAT (SAT TB): Thai Auto Recovery and New JV Should Drive Growth

Low core profit valuation and share price is less volatile relative to its sector Recovering automotive sector in Thailand, with new models...

A. Stotz Investment Research

SAT: New JV Should Grow ASEAN Market Share in Coil Springs

Low core profit valuation, share price is less volatile, and cheap on agross profit basis relative to its sector SAT entered into JV with Mubea...

A. Stotz Investment Research