Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Last week <a href="https://www.smartkarma.com/entities/kerry-logistics-network-ltd" target="_blank" data-smartkarma-citation="entities:367:1" rel="noopener">Kerry Logistics Network (636 HK)</a> (KLN) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/1229/2023122900152.pdf" target="_blank" rel="noopener">announced</a> it would in-specie its entire 52.1% stake in <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> (KET).</li>
<li>As <a href="https://www.smartkarma.com/entities/maanshan-dingtai-rare-a" target="_blank" data-smartkarma-citation="entities:4128:1" rel="noopener">S.F. Holding (002352 CH)</a> holds a controlling 51.5% stake in KLN after the 2021 partial Offer, it will hold 26.8% in KET post-in-specie. That triggers an unconditional MTO.  </li>
<li>The MTO price will be THB5.50/share. The key regulatory approval is Thai SFC. That won't be an issue. </li>
</ul>


Last week Kerry Logistics Network (636 HK) (KLN) announced it would in-specie its entire 52.1% stake in Kerry Express Thailand (KEX TB) (KET).
As S.F. Holding (002352 CH) holds a controlling 51.5% stake in KLN after the 2021 partial Offer, it will hold 26.8% in KET post-in-specie. That triggers an unconditional MTO.  
The MTO price will be THB5.50/share. The key regulatory approval is Thai SFC. That won't be an issue. 


Kerry Express (KEX TB): Kerry Logistics (636 HK)'s In-Specie Triggers MTO

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

<ul>
<li>VGI reports Bt68m net profit in FY2Q23(July’22-Sept’22).Stripping out extra items mainly from sales of investment,loss from core operation would be at Bt147m,the most disappointed loss in the past six quarters.</li>
<li>Disappointed earnings result in 2QFY23 Six-quarter high of VGI’s loss pressured by;1.) a spike in operating costs from digital service segment mainly from an insurance arm under ‘Rabbit Care’ together</li>
<li>Revenue hit eleven quarter high at Bt1.2bn (+33%YoY +18%QoQ), underpinned by revenue from digital service that hit all-time high at Bt381m. (+47%QoQ +40%YoY) mostly from insurance commission</li>
</ul>


VGI reports Bt68m net profit in FY2Q23(July’22-Sept’22).Stripping out extra items mainly from sales of investment,loss from core operation would be at Bt147m,the most disappointed loss in the past six quarters.
Disappointed earnings result in 2QFY23 Six-quarter high of VGI’s loss pressured by;1.) a spike in operating costs from digital service segment mainly from an insurance arm under ‘Rabbit Care’ together
Revenue hit eleven quarter high at Bt1.2bn (+33%YoY +18%QoQ), underpinned by revenue from digital service that hit all-time high at Bt381m. (+47%QoQ +40%YoY) mostly from insurance commission


VGI : On Slow Recovery Pace Relative to Peers at Demanding Valuation

<ul>
<li>We downgrade VGI to HOLD rating while trim down target price to Bt4.60(previous TP:Bt6.20)after revise down earnings in 22-23E by 57%and 24% and factor in target price cut for KEX</li>
<li>Disappointed earnings result in 1QFY23 Five-quarter low of VGI’s core profit was dragged down by;1) share of loss from associates that fell to Bt101m (vs.Bt90m in 4QFY22), mainly from KEX </li>
<li>An extra gain from share divestment that boost net profit include Bt113m from JMART and Bt59m from KEX.</li>
</ul>


We downgrade VGI to HOLD rating while trim down target price to Bt4.60(previous TP:Bt6.20)after revise down earnings in 22-23E by 57%and 24% and factor in target price cut for KEX
Disappointed earnings result in 1QFY23 Five-quarter low of VGI’s core profit was dragged down by;1) share of loss from associates that fell to Bt101m (vs.Bt90m in 4QFY22), mainly from KEX 
An extra gain from share divestment that boost net profit include Bt113m from JMART and Bt59m from KEX.


VGI : Still in Recovery Path but at a Sluggish Pace Against Peers

<ul>
<li>We maintain BUY rating for VGI with the new target price of Bt6.20 (Previous TP: Bt6.50), derived from SOTP method or 50% premium to Thai media peers.  </li>
<li>We anticipate revenue streams from media and commercial space (recently started to manage by NINE),to retreat to 70% of the level we have seen during pre-pandemic by late 2QFY23 (July’22-September’22)</li>
<li>The management revenue target in FY2023 at Bt6.5bn-7.0bn is fairly optimistic as we anticipate OOH media revenue to not recover that quickly.</li>
</ul>


We maintain BUY rating for VGI with the new target price of Bt6.20 (Previous TP: Bt6.50), derived from SOTP method or 50% premium to Thai media peers.  
We anticipate revenue streams from media and commercial space (recently started to manage by NINE),to retreat to 70% of the level we have seen during pre-pandemic by late 2QFY23 (July’22-September’22)
The management revenue target in FY2023 at Bt6.5bn-7.0bn is fairly optimistic as we anticipate OOH media revenue to not recover that quickly.


VGI: Moderate Earnings Recovery with Growth Remain Promising

<ul>
<li>We maintain BUY rating for VGI with the new target price of Bt6.50 (Previous TP: Bt8.10), derived from SOTP method or 50% premium to Thai media peers.  Target price downgrade </li>
<li>Bt12.9bn from Capital raising will be utilized to pay loan repayment from JMART 15% stake investment (Bt8.2bn) and future business expansion via M&amp;A.</li>
<li>Expect 4QFY22 earnings (Jan’22-Mar’22) to face a hiccup given Omicron virus spread in Jan’22.We anticipate the media revenue stream to retreat to 70%of the level we have seen during pre-pandemic </li>
</ul>


We maintain BUY rating for VGI with the new target price of Bt6.50 (Previous TP: Bt8.10), derived from SOTP method or 50% premium to Thai media peers.  Target price downgrade 
Bt12.9bn from Capital raising will be utilized to pay loan repayment from JMART 15% stake investment (Bt8.2bn) and future business expansion via M&amp;A.
Expect 4QFY22 earnings (Jan’22-Mar’22) to face a hiccup given Omicron virus spread in Jan’22.We anticipate the media revenue stream to retreat to 70%of the level we have seen during pre-pandemic 


VGI: Positive for Short-Term Outlook While Long-Term Remain Promising

Thailand

VGI Public Company Limited provides offline-to-online (O2O) marketing solutions, encompassing advertising, digital services, and distribution. Its advertising segment includes Out-of-Home (OOH) and online marketing services, with OOH advertising covering transit, office building, and billboard media. The company also offers digital lifestyle solutions such as cashless payment services and digital lending. VGI Public Company Limited was founded in 1995 and is headquartered in Bangkok, Thailand.

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VGI (VGI TB)

Kerry Express (KEX TB): Kerry Logistics (636 HK)'s In-Specie Triggers MTO

KET is trading 2% through term. Get involved if this were to dip below the net terms. Or buy outright is you have a firm conviction on the back...

David Blennerhassett

VGI : On Slow Recovery Pace Relative to Peers at Demanding Valuation

VGI reports Bt68m net profit in FY2Q23 (July’22-Sept’22). Stripping out extra items mainly from sales of investment, loss from core operation would...

Pi Securities PCL, Thailand

VGI : Still in Recovery Path but at a Sluggish Pace Against Peers

We downgrade VGI to HOLD rating while trim down target price to Bt4.60 (previous TP: Bt6.20) after revise down earnings in 22-23E by 57% and 24%...

Pi Securities PCL, Thailand

VGI: Moderate Earnings Recovery with Growth Remain Promising

We maintain BUY rating for VGI with the new target price of Bt6.20 (Previous TP: Bt6.50), derived from SOTP method or 50% premium to Thai media...

Pi Securities PCL, Thailand

VGI: Positive for Short-Term Outlook While Long-Term Remain Promising

We maintain BUY rating for VGI with the new target price of Bt6.50 (Previous TP: Bt8.10), derived from SOTP method or 50% premium to Thai media...

Pi Securities PCL, Thailand

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