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 1,640/1,650 points and the support at 1,625/1,620 points.</li><li>Positive factors include the valuations of Thai stocks, which remain inexpensive, as reflected in the fact that the earnings yield gap is still higher than the 12M average.</li><li>The negative factors include concerns that the Fed may hike the policy interest rate more aggressively than expected due to the better-than-forecast employment figures and the continued increase in the ISM services PMI.</li></ul>

The SET Index is expected to move sideways, with the resistance at 1,640/1,650 points and the support at 1,625/1,620 points.Positive factors include the valuations of Thai stocks, which remain inexpensive, as reflected in the fact that the earnings yield gap is still higher than the 12M average.The negative factors include concerns that the Fed may hike the policy interest rate more aggressively than expected due to the better-than-forecast employment figures and the continued increase in the ISM services PMI.

<ul><li>The SET Index is expected to weaken, with the resistance at 1,650/1,666 points and the support at 1,630/1,613 points (10-day and 200-day EMA).</li><li>We recommend trading buy on BDMS, AOT and ADVANC.</li><li>Negative momentum will be generated by the sharp falls of greater than 3% in US markets after the Fed chairman signaled further rate hikes to bring down inflation at the Jackson Hole Economic Policy Symposium, increasing the risk of an economic slowdown.</li></ul>

The SET Index is expected to weaken, with the resistance at 1,650/1,666 points and the support at 1,630/1,613 points (10-day and 200-day EMA).We recommend trading buy on BDMS, AOT and ADVANC.Negative momentum will be generated by the sharp falls of greater than 3% in US markets after the Fed chairman signaled further rate hikes to bring down inflation at the Jackson Hole Economic Policy Symposium, increasing the risk of an economic slowdown.

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Credit

Siri Hub Investment Digital Tokens / Credit

Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY)

This research follows our first report on <a href="https://www.smartkarma.com/entities/siri-hub-investment-digital-tokens" target="_blank" data-smartkarma-citation="entities:33515:1" rel="noopener">Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY)</a> (SIRIHUB) published on 30-June ( <a href="https://www.smartkarma.com/insights/spv77-siri-hub-investment-digital-token-thailand-s-first-debt-token" target="_blank" data-smartkarma-citation="insights:53833" rel="noopener">SPV77 / Siri Hub Investment Digital Token: Thailand’s First Debt Token</a> ). We advise readers to familiarize themselves with the structure of SIRIHUB first which was laid out in our last report.XSpring Digital received an approval from Thailand’s Securities Exchange Commission (SEC) on 29-July to sell Siri Hub Investment Digital Tokens (SIRIHUB), Thailand’s first investment token. We understand Xspring has not concluded the sale yet and maintain the selling price at THB10 per token for the THB2.4bn sale. SIRIHUB-A was launched at 4.5% as per our expectation. SIRIHUB-B was launched at 8% (lower than the initial guidance of 8.25%). We attribute a lowered yield to demand for high-yielding investment in Thailand which reflects a lack of opportunities to invest outside Thailand and/or outside a traditionally low domestic yield environment. As per our opinion in the last report, we view SIRIHUB-B as a much better investment than SIRIHUB-A.We view SIRIHUB akin to 4-year 2-tier bonds issued by Siripat Four Co. Ltd. (SP4). SIRIHUB-A can be viewed as a 4%-coupon senior bond while SIRIHUB-B can be viewed as an 8%-coupon subordinated bond. Overall, we assign an UNDERWEIGHT recommendation on both SIRIHUB A and B as we believe the valuation is not compelling, compared to Sansiri’s prevalent THB bond yields. We also see the following risk elements on the token:<ul>
<li>The token has no recourse to <a href="https://www.smartkarma.com/entities/sansiri-public-co-ltd" target="_blank" data-smartkarma-citation="entities:12201:1" rel="noopener">Sansiri Public (SIRI TB)</a> (Sansiri) but the ability to pay dividends on a timely manner rests on Sansiri’s liquidity.</li>
<li>The token relies on cashflow of Siri Campus. Even though we like the potential of Siri Campus in terms of location and the up-and-coming area close to the intersection of Sukhumvit Road and Onnut Road (Soi Sukhumvit 77) area, there is no income diversification in terms of other properties where the token can draw cashflow from.</li>
</ul>All in all, we see investors buying into Thailand’s first debt token as a fare to get on the first cog railway to summit, a slow ride which will take a while to the top. It is a sightseeing trip to be the first investors rather than an investment in itself.

This research follows our first report on Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY) (SIRIHUB) published on 30-June ( SPV77 / Siri Hub Investment Digital Token: Thailand’s First Debt Token ). We advise readers to familiarize themselves with the structure of SIRIHUB first which was laid out in our last report.XSpring Digital received an approval from Thailand’s Securities Exchange Commission (SEC) on 29-July to sell Siri Hub Investment Digital Tokens (SIRIHUB), Thailand’s first investment token. We understand Xspring has not concluded the sale yet and maintain the selling price at THB10 per token for the THB2.4bn sale. SIRIHUB-A was launched at 4.5% as per our expectation. SIRIHUB-B was launched at 8% (lower than the initial guidance of 8.25%). We attribute a lowered yield to demand for high-yielding investment in Thailand which reflects a lack of opportunities to invest outside Thailand and/or outside a traditionally low domestic yield environment. As per our opinion in the last report, we view SIRIHUB-B as a much better investment than SIRIHUB-A.We view SIRIHUB akin to 4-year 2-tier bonds issued by Siripat Four Co. Ltd. (SP4). SIRIHUB-A can be viewed as a 4%-coupon senior bond while SIRIHUB-B can be viewed as an 8%-coupon subordinated bond. Overall, we assign an UNDERWEIGHT recommendation on both SIRIHUB A and B as we believe the valuation is not compelling, compared to Sansiri’s prevalent THB bond yields. We also see the following risk elements on the token:
The token has no recourse to Sansiri Public (SIRI TB) (Sansiri) but the ability to pay dividends on a timely manner rests on Sansiri’s liquidity.
The token relies on cashflow of Siri Campus. Even though we like the potential of Siri Campus in terms of location and the up-and-coming area close to the intersection of Sukhumvit Road and Onnut Road (Soi Sukhumvit 77) area, there is no income diversification in terms of other properties where the token can draw cashflow from.
All in all, we see investors buying into Thailand’s first debt token as a fare to get on the first cog railway to summit, a slow ride which will take a while to the top. It is a sightseeing trip to be the first investors rather than an investment in itself.  

Siri Hub Investment Digital Token: The Cog Railway

We are launching coverage of debt tokens with <a href="https://www.smartkarma.com/entities/siri-hub-investment-digital-tokens" target="_blank" data-smartkarma-citation="entities:33515:1" rel="noopener">Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY)</a> (SIRIHUB), Thailand’s first investment token. This report is a pre-launch report and we note that Thailand’s Securities Exchange Commission (SEC) is in the process of reviewing the launch at the time of this report. We understand XSpring Digital (formerly called SE Digital), SIRIHUB’s underwriter, has filed for SEC’s approval for the token launch since 5-May and the SEC has up to 90 days to assess the proposal. As such, we expect the SEC’s decision by 5-August.Our conversation with the SEC on 29-June leads us to believe XSpring Digital will need to revise its token prospectus in July. That said, we do not expect the token to be launched until August. We reached out to XSpring Digital to get our initial questions answered but so far the company has not replied to us. Although the sale is not finalized yet, we believe it is of investor interest to understand the proposed structure of SIRIHUB to react in time when the token is up for sale.Our initial thought on the token is that SIRIHUB-A at up to 4.5% dividend yield is unattractive, compared to <a href="https://www.smartkarma.com/entities/sansiri-public-co-ltd" target="_blank" data-smartkarma-citation="entities:12201:1" rel="noopener">Sansiri Public (SIRI TB)</a> (Sansiri)’s 4-year THB bond yield which hovers in the mid 4% handle at the time of this report. That said, SIRIHUB-B at up to 8.25% dividend yield is a much better choice, in our view, although SIRIHUB-B takes structural subordination to SIRIHUB-A. SIRIHUB-B is a better carry at 8.25% dividend yield (than SIRIHUB-A’s). Sansiri is rated “BBB+” by TRIS Rating. Assuming a one-notch lower rating for SIRIHUB-B at “BBB” on a national scale, SIRIHUB-B’s international scale rating could be in the “B” or “B-“ category. At a “B” credit rating on an international scale, we believe investors can still find 4-year Asian USD bonds with a yield-to-worst of more than an 8.25% handle.Overall, we believe the upside of both tokens is rather limited by (1) the value of Siri Campus which could be lower than THB2.4bn now on COVID-19; (2) a lack of income diversification; and (3) a lack of liquidity as Thailand’s first debt token. That said, we see both SIRIHUB-A and SIRIHUB-B as unattractive at the current offering despite the better carry for SIRIHUB-B.

We are launching coverage of debt tokens with Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY) (SIRIHUB), Thailand’s first investment token. This report is a pre-launch report and we note that Thailand’s Securities Exchange Commission (SEC) is in the process of reviewing the launch at the time of this report. We understand XSpring Digital (formerly called SE Digital), SIRIHUB’s underwriter, has filed for SEC’s approval for the token launch since 5-May and the SEC has up to 90 days to assess the proposal. As such, we expect the SEC’s decision by 5-August.Our conversation with the SEC on 29-June leads us to believe XSpring Digital will need to revise its token prospectus in July. That said, we do not expect the token to be launched until August. We reached out to XSpring Digital to get our initial questions answered but so far the company has not replied to us. Although the sale is not finalized yet, we believe it is of investor interest to understand the proposed structure of SIRIHUB to react in time when the token is up for sale.Our initial thought on the token is that SIRIHUB-A at up to 4.5% dividend yield is unattractive, compared to Sansiri Public (SIRI TB) (Sansiri)’s 4-year THB bond yield which hovers in the mid 4% handle at the time of this report. That said, SIRIHUB-B at up to 8.25% dividend yield is a much better choice, in our view, although SIRIHUB-B takes structural subordination to SIRIHUB-A. SIRIHUB-B is a better carry at 8.25% dividend yield (than SIRIHUB-A’s). Sansiri is rated “BBB+” by TRIS Rating. Assuming a one-notch lower rating for SIRIHUB-B at “BBB” on a national scale, SIRIHUB-B’s international scale rating could be in the “B” or “B-“ category. At a “B” credit rating on an international scale, we believe investors can still find 4-year Asian USD bonds with a yield-to-worst of more than an 8.25% handle.Overall, we believe the upside of both tokens is rather limited by (1) the value of Siri Campus which could be lower than THB2.4bn now on COVID-19; (2) a lack of income diversification; and (3) a lack of liquidity as Thailand’s first debt token. That said, we see both SIRIHUB-A and SIRIHUB-B as unattractive at the current offering despite the better carry for SIRIHUB-B.

SPV77 / Siri Hub Investment Digital Token: Thailand’s First Debt Token

Thailand

XSpring Capital Public Company Limited is a Thailand-based financial services firm that invests in diverse businesses both domestically and internationally. It operates through five segments: Securities, Fund Asset Management, Digital Assets, Asset Management, and Investment and Other, offering services like securities brokerage, digital asset dealing, and wealth management. The company was founded in 1974 and is headquartered in Bangkok, Thailand.

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Thailand's first debt token is under SEC review. See how the token is structured, how the story came together, and whether "SIRIHUB" is investable.

Bondcritic

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