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

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

On the back of 42% earnings recovery in 2021, we maintain our BUY rating and roll over target price to Bt55 (up from previous TP of Bt43) based on 30xPE’21E, the Thai Commerce group.<ul>
<li>Benefit from government stimulus measures.</li>
<li>Expansion phase for Mini BigC still go on.</li>
</ul>We still like this stock for 12-months holding given (1) its strong integrated solid supply chain which allow the company to benefit from industry growth and recovery; (2) growth potential from small stores expansion by double digit growth in the next two years (ie., Mini BigC and BigC Market which currently contribute 15% of total sales).

On the back of 42% earnings recovery in 2021, we maintain our BUY rating and roll over target price to Bt55 (up from previous TP of Bt43) based on 30xPE’21E, the Thai Commerce group.
Benefit from government stimulus measures.
Expansion phase for Mini BigC still go on.
We still like this stock for 12-months holding given (1) its strong integrated solid supply chain which allow the company to benefit from industry growth and recovery; (2) growth potential from small stores expansion by double digit growth in the next two years (ie., Mini BigC and BigC Market which currently contribute 15% of total sales).

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).

Event-Driven

In their request for approval of the deal between CP Group and Tesco (Thailand), CP All, which would acquire 40% of the assets, sent us details in greater depth than can be found in the press. Some key points include:<ul>
<li>
Earnings-accretive. The deal should add Bt4bn in earnings and Bt38.2bn in assets to CP Group. For CP All, that's a nice earnings bump of almost Bt1.4bn on a sustainable basis that doesn't seem impacted by COVID-19.</li>
<li>
Complex structure with non-core assets. Two special purpose vehicles (SPV) and numerous non-core assets such as TLGF and two insurance businesses are involved in this deal. Difficult to summarize...better see the charts and details for yourself.
</li>
<li>
Approval will likely be delayed, since the shareholder meeting is scheduled on April 24 in the midst of Bangkok's shutdown.</li>
<li>
Blood and sweat. Several top executives were infected with COVID-19 due to their presence in London as they pursued this historic deal with one of them Quant Chairman Pakpoom having passed away.</li>
</ul>

In their request for approval of the deal between CP Group and Tesco (Thailand), CP All, which would acquire 40% of the assets, sent us details in greater depth than can be found in the press. Some key points include:

Earnings-accretive. The deal should add Bt4bn in earnings and Bt38.2bn in assets to CP Group. For CP All, that's a nice earnings bump of almost Bt1.4bn on a sustainable basis that doesn't seem impacted by COVID-19.

Complex structure with non-core assets. Two special purpose vehicles (SPV) and numerous non-core assets such as TLGF and two insurance businesses are involved in this deal. Difficult to summarize...better see the charts and details for yourself.


Approval will likely be delayed, since the shareholder meeting is scheduled on April 24 in the midst of Bangkok's shutdown.

Blood and sweat. Several top executives were infected with COVID-19 due to their presence in London as they pursued this historic deal with one of them Quant Chairman Pakpoom having passed away.


Mechanics and Details of the CP Group-Tesco Deal

Five interesting news/developments that influence Thai equities and came across our radar screen recently:<ul>
<li>
PTTOR and CENTEL form a toehold joint venture to enter the promising Vietnam coffee business together.</li>
<li>
Tesco puts its US$7-9bn Thai-Malaysian unit up for bids, and several major Thai conglomerates (CP, TCC, Central) are eyeing it. Each party faces different challenges and opportunities.</li>
<li>
An outbreak in Wuhan results in more travel controls for Thailand that could potentially hurt tourism.</li>
<li>
CRC, Thailand's biggest IPO ever, recently agreed to an indicative IPO price of Bt40-48/sh and also setting February 3 as the deadline for the ROBINS-CRC share swap.</li>
<li>
Relief for property sector. At the risk of encouraging more speculation, the Thai government agreed to temporarily raise the LTV (loan to value) ratio back to 100%. The opposition is also leading a crusade against land taxes, both residential and industrial estates.</li>
</ul>

Five interesting news/developments that influence Thai equities and came across our radar screen recently:

PTTOR and CENTEL form a toehold joint venture to enter the promising Vietnam coffee business together.

Tesco puts its US$7-9bn Thai-Malaysian unit up for bids, and several major Thai conglomerates (CP, TCC, Central) are eyeing it. Each party faces different challenges and opportunities.

An outbreak in Wuhan results in more travel controls for Thailand that could potentially hurt tourism.

CRC, Thailand's biggest IPO ever, recently agreed to an indicative IPO price of Bt40-48/sh and also setting February 3 as the deadline for the ROBINS-CRC share swap.

Relief for property sector. At the risk of encouraging more speculation, the Thai government agreed to temporarily raise the LTV (loan to value) ratio back to 100%. The opposition is also leading a crusade against land taxes, both residential and industrial estates.


Snippets #34: Tesco in Play, CRC's Indicative IPO Pricing

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.

Thematic (Sector/Industry)

§  Ascendas REIT has recently replaced CapitaLand Mall Trust as Singapore's largest capitalised REIT – and has been the second-best performing REIT in the YTD with an 11.9% total return.§  The capitalisation of Singapore’s REIT Sector has almost doubled over the past five years. Singapore’s REIT Sector also maintains a competitive edge with higher average yields and lower average gearing ratios than the combined REIT Sector of Japan, Australia and Hong Kong. §  The NikkoAM - StraitsTrading Asia ex Japan REIT ETF  which is expected to include up to 70% weightage in Singapore REITs is scheduled to list on SGX on 29 March 2017. Ascendas REIT and CapitaLand Mall Trust are expected to maintain relatively large weightings in the ETF.

§  Ascendas REIT has recently replaced CapitaLand Mall Trust as Singapore's largest capitalised REIT – and has been the second-best performing REIT in the YTD with an 11.9% total return.§  The capitalisation of Singapore’s REIT Sector has almost doubled over the past five years. Singapore’s REIT Sector also maintains a competitive edge with higher average yields and lower average gearing ratios than the combined REIT Sector of Japan, Australia and Hong Kong. §  The NikkoAM - StraitsTrading Asia ex Japan REIT ETF  which is expected to include up to 70% weightage in Singapore REITs is scheduled to list on SGX on 29 March 2017. Ascendas REIT and CapitaLand Mall Trust are expected to maintain relatively large weightings in the ETF. 

Ascendas REIT Is Now Singapore's Largest Capitalised REIT

<ul>
<li>SGX’s Real Estate Developers and Operators have returned 12% YTD, outperforming the STI’s +8%. Despite the rally, the price-to-book ratio of the Sector is still trading near one standard deviation below its historical mean.</li>
<li>
Potential drivers for the Singapore property market exist on both the supply and demand front. The biggest Real Estate Developer stocks with substantial Singapore exposure include UOL Group, United Industrial Corporation, Wheelock Properties, Wing Tai Holdings and Bukit…</li>
</ul>


SGX’s Real Estate Developers and Operators have returned 12% YTD, outperforming the STI’s +8%. Despite the rally, the price-to-book ratio of the Sector is still trading near one standard deviation below its historical mean.

Potential drivers for the Singapore property market exist on both the supply and demand front. The biggest Real Estate Developer stocks with substantial Singapore exposure include UOL Group, United Industrial Corporation, Wheelock Properties, Wing Tai Holdings and Bukit…


Real Estate Sector Outperformed in the Year to Date

Thailand

Tesco Lotus Retail Growth Freehold & Leasehold Property Fund is a closed-end fund incorporated in Thailand. The Fund's objective is to achieve good returns. The Fund invests in freehold & leasehold of 17 shopping malls anchored by a Tesco Lotus hypermarket in cities including Bangkok and tourist destinations such as Krabi.

Tesco Lotus Retail Growth Fr (TLGF TB)

BJC: Expected Strong Recovery in 2021

On the back of 42% earnings recovery in 2021, we maintain our BUY rating and roll over target price to Bt55 (up from previous TP of Bt43) based on...

Pi Securities PCL, Thailand

Mechanics and Details of the CP Group-Tesco Deal

In their request for approval of the deal between CP Group and Tesco (Thailand), CP All, which would acquire 40% of the assets, sent us details in...

Athaporn Arayasantiparb, CFA

Snippets #34: Tesco in Play, CRC's Indicative IPO Pricing

Five interesting news/developments that influence Thai equities and came across our radar screen recently: PTTOR and CENTEL form a toehold joint...

Athaporn Arayasantiparb, CFA

Ascendas REIT Is Now Singapore's Largest Capitalised REIT

§ Ascendas REIT has recently replaced CapitaLand Mall Trust as Singapore's largest capitalised REIT – and has been the second-best performing REIT...

Singapore Exchange Ltd (SGX)

Real Estate Sector Outperformed in the Year to Date

SGX’s Real Estate Developers and Operators have returned 12% YTD, outperforming the STI’s +8%. Despite the rally, the price-to-book ratio of the...

Singapore Exchange Ltd (SGX)