IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

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<li>
<a href="https://www.smartkarma.com/entities/betagro-group" target="_blank" data-smartkarma-citation="entities:36222:1" rel="noopener">Betagro (BTG TB)</a>, Thailand’s leading integrated food company, will open its books for its THB17.4 billion (US$462 million) from 10 to 25 October.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/betagro-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:81570" rel="noopener">Betagro IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/betagro-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:81612" rel="noopener">Betagro IPO: The Bear Case</a>. </li>
<li>Our valuation analysis suggests that Betagro is fully priced at the IPO price. Give the IPO a pass, awaiting a lower entry point.</li>
</ul>



Betagro (BTG TB), Thailand’s leading integrated food company, will open its books for its THB17.4 billion (US$462 million) from 10 to 25 October.
We previously discussed the IPO in Betagro IPO: The Bull Case and Betagro IPO: The Bear Case. 
Our valuation analysis suggests that Betagro is fully priced at the IPO price. Give the IPO a pass, awaiting a lower entry point.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/betagro-group" target="_blank" data-smartkarma-citation="entities:36222:1" rel="noopener">Betagro (BTG TB)</a>, Thailand’s leading integrated food company, is seeking to raise US$462 million at an IPO price of THB40 per share. Books open on 10 October.</li>
<li>In <a href="https://www.smartkarma.com/insights/betagro-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:81570" rel="noopener">Betagro IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.  </li>
<li>The key elements of the bear case rest on weak sector market sentiment, second largest business under pressure, elevated raw material prices and mid-tier EBITDA margin and ROE.</li>
</ul>



Betagro (BTG TB), Thailand’s leading integrated food company, is seeking to raise US$462 million at an IPO price of THB40 per share. Books open on 10 October.
In Betagro IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.  
The key elements of the bear case rest on weak sector market sentiment, second largest business under pressure, elevated raw material prices and mid-tier EBITDA margin and ROE.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/betagro-group" target="_blank" data-smartkarma-citation="entities:36222:1" rel="noopener">Betagro Group (1737144D TB)</a>, Thailand’s leading integrated food company, is seeking to raise US$554 million through a SET IPO, according to press reports</li>
<li>Betagro plans to offer 500 million shares or 25% of the total issued shares after IPO. This will be Thailand's second-largest listing this year after <a href="https://www.smartkarma.com/entities/thai-life-insurance" target="_blank" data-smartkarma-citation="entities:34915:1" rel="noopener">Thai Life Insurance (TLI TB)</a>. </li>
<li>The key elements of the bull case rest on top quartile growth rates, a well-functioning core business, rising profitability, cash generation and declining leverage.</li>
</ul>



Betagro Group (1737144D TB), Thailand’s leading integrated food company, is seeking to raise US$554 million through a SET IPO, according to press reports
Betagro plans to offer 500 million shares or 25% of the total issued shares after IPO. This will be Thailand's second-largest listing this year after Thai Life Insurance (TLI TB). 
The key elements of the bull case rest on top quartile growth rates, a well-functioning core business, rising profitability, cash generation and declining leverage.


Event-Driven

<a href="https://www.smartkarma.com/entities/cp-pokphand-co-ltd" target="_blank" data-smartkarma-citation="entities:10135:1" rel="noopener">Cp Pokphand (43 HK)</a> (CPP) is a leading agri-food conglomerate in China and Vietnam. After market close on Thursday, it announced a privatisation offer by way of a scheme of arrangement from <a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener">CP FOODS (CPF TB)</a>, the largest shareholder (49.74% of the outstanding shares). The offeror will offer HK$1.15 in cash for each scheme share. The bid represents a premium of 19.79% over the closing price of HK$0.96 per share on the last trading date (24 September prior to the trading halt). For good measure, CPP also released a statement outlining a profit warning. CPP noted that the net profit would decline -75% YoY in 8M21, which marks a deterioration to the net profit decline of -50% YoY in 1H21. The profit warning was attributed mainly to a poor performance in China caused by lower poultry and swine prices. CPP notes that poultry and swine prices in China and swine prices in Vietnam will have fallen further in September. <div class="content-highlight">The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 5,958.8 million shares or 24.75% of shares outstanding, the 10% blocking stake is 595.9 million shares or 2.48% of shares outstanding. No shareholder holds a blocking stake. Overall, we think the offer price is attractive and that the privatisation bid will be successful. </div>

Cp Pokphand (43 HK) (CPP) is a leading agri-food conglomerate in China and Vietnam. After market close on Thursday, it announced a privatisation offer by way of a scheme of arrangement from CP FOODS (CPF TB), the largest shareholder (49.74% of the outstanding shares). The offeror will offer HK$1.15 in cash for each scheme share. The bid represents a premium of 19.79% over the closing price of HK$0.96 per share on the last trading date (24 September prior to the trading halt). For good measure, CPP also released a statement outlining a profit warning. CPP noted that the net profit would decline -75% YoY in 8M21, which marks a deterioration to the net profit decline of -50% YoY in 1H21. The profit warning was attributed mainly to a poor performance in China caused by lower poultry and swine prices. CPP notes that poultry and swine prices in China and swine prices in Vietnam will have fallen further in September. The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 5,958.8 million shares or 24.75% of shares outstanding, the 10% blocking stake is 595.9 million shares or 2.48% of shares outstanding. No shareholder holds a blocking stake. Overall, we think the offer price is attractive and that the privatisation bid will be successful. 

C.P. Pokphand’s Privatisation Bid from CPF

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Since the beginning of February, a lot of companies in Thailand have announced stock buybacks ranging from a maximum spend of THB 10m to THB 16bn. With one exception, these buybacks will be executed on the Stock Exchange of Thailand (SET).In this Insight, we look at the SET's repurchase rules, the companies that have announced buybacks and their ability to complete the buyback, the impact of the buyback if completed, and formulate trades on some of the stocks where we see a high probability of the buyback being completed.

Since the beginning of February, a lot of companies in Thailand have announced stock buybacks ranging from a maximum spend of THB 10m to THB 16bn. With one exception, these buybacks will be executed on the Stock Exchange of Thailand (SET).In this Insight, we look at the SET's repurchase rules, the companies that have announced buybacks and their ability to complete the buyback, the impact of the buyback if completed, and formulate trades on some of the stocks where we see a high probability of the buyback being completed.

Thailand Buybacks - Show of Strength or Leap of Faith?

Thailand

Thaifoods Group is a vertically integrated food producer specializing in the production of chicken and swine, operating in Thailand and Vietnam. The company's core activities include chicken breeding, meat production, processed chicken products, pig breeding, and live pig sales. It also operates feed mills and a retail business. Thaifoods Group was founded in 1987 and is headquartered in Bangkok, Thailand.

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Thaifoods Group (TFG TB)

Betagro IPO: Valuation Insights

Betagro is a well-run company. However, it is fully priced at the IPO price of THB40 per share. Give the IPO a pass, awaiting a lower entry point.

Arun George

Betagro IPO: The Bear Case

The key elements of the bear case rest on weak sector market sentiment, second largest business under pressure, elevated raw material prices and...

Arun George

Betagro IPO: The Bull Case

The key elements of the bull case rest on top quartile growth rates, a well-functioning core business, rising profitability, cash generation and...

Arun George

C.P. Pokphand’s Privatisation Bid from CPF

CPP announced a privatisation offer from CPF at HK$1.15 cash for each scheme share. Overall, we think the offer price is attractive and that the...

Arun George

Thailand Buybacks - Show of Strength or Leap of Faith?

Since the beginning of February, a lot of companies in Thailand have announced stock buybacks ranging from a maximum spend of THB 10m to THB 16bn....

Brian Freitas

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