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Thailand

Brief Thailand: A Liquidity Peak With A View and more

By | Daily Briefs, Thailand

In this briefing:

  1. A Liquidity Peak With A View

1. A Liquidity Peak With A View

Image 4208335621593355545509

  • The worst and the best of 2020 may already be over for the financial markets  
  • Global Liquidity remains buoyant, but growth is peaking
  • US broad liquidity expansion slowed markedly in June 2020
  • Still on-track for V-shaped economic rebound
  • Slower liquidity growth and large upcoming coupon issuance points to at best range bound Wall Street

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Brief Thailand: A Liquidity Peak With A View and more

By | Daily Briefs, Thailand

In this briefing:

  1. A Liquidity Peak With A View
  2. ACE: Great Growth Opportunities, but the Stock Is Overpriced
  3. ILM: Leader in Home Furnishing Has More to Give
  4. Osotspa Placement – Resilient Business but Founding Family Is Selling

1. A Liquidity Peak With A View

Image 4208335621593355545509

  • The worst and the best of 2020 may already be over for the financial markets  
  • Global Liquidity remains buoyant, but growth is peaking
  • US broad liquidity expansion slowed markedly in June 2020
  • Still on-track for V-shaped economic rebound
  • Slower liquidity growth and large upcoming coupon issuance points to at best range bound Wall Street

2. ACE: Great Growth Opportunities, but the Stock Is Overpriced

Slide6

We initiate coverage on ACE with a SELL recommendation based on a target price of Bt2.64, implying a downside of 36% from the current price. We derive the target price from a de-rating to a 25% premium to the sector PE ratio, meaning a 2020E 29.4x PE.

Investment thesis:

  • Power producer with high growth potential, but already priced in
  • Long-term contracts and supply control drive high profitability
  • Government driven demand can pose a risk

Risks: Adverse regulatory changes, reliance on a few customers, volatility in fuel prices, unexpected disruptions in production, delays in project execution, change in political leadership can sometimes impact companies.

3. ILM: Leader in Home Furnishing Has More to Give

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We initiate coverage on ILM with a BUY recommendation based on a target price of Bt15.20, implying an upside of 13% from the current price. We derive our target price from a DCF-based valuation using a WACC of 6.8% and a terminal growth rate of 2%.

Investment thesis:

  • Customized furniture brand Younique captures modern customer demand
  • Improved inventory management leads to significant cost cut
  • Overseas expansion provide future growth opportunities

Risks: Slowdown in Thai consumer spending, increased competition puts pressure on margins, worsening inventory management, and disruptions in supply chain.

4. Osotspa Placement – Resilient Business but Founding Family Is Selling

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The Osathanugrah family, specifically Petch Osathanugrah, Puree Osathanugrah, Purat Osathanugrah and Orizon Limited, are looking to sell their shares in Osotspa Co Ltd (OSP TB) worth about US$108m. Post-selldown, the family’s core holdings through The Orizon Group still has a 27.9% stake in Osotspa.

We have earlier covered the IPO in:

In this note, we will look take a look at the company’s fundamentals, deal dynamics, and run the deal through our framework.

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Brief Thailand: MINOR and TAC Consumer Navigate the Pandemic and more

By | Daily Briefs, Thailand

In this briefing:

  1. MINOR and TAC Consumer Navigate the Pandemic

1. MINOR and TAC Consumer Navigate the Pandemic

Ralikuma

Minor called a shareholder meeting to update on the recent capital management program which included a combination of bond and warrants issuance. We also checked on TAC Consumer, a small cap stock that typically rides on CP All’s coattails.

  • MINT’s US$300m perpetual bonds was 11x oversubscribed despite offering a modest rate of only 3.1% and including a 3-year call option, largely because it had a guarantee by the similarly rated Bangkok Bank. The company also requested that Banks waive the quarterly covenant test.
  • Equity increase. The company is also offering 563m new shares at Bt18.9/sh (give or take 10%) for every 8.2 existing shares and one warrant for every 17 existing shares, which expire in 3 years. These measures should give them more than ample capital to weather the pandemic. So far, operating cash outflow was only Bt1.4m in March and April, so we actually consider this a bit of an over-reaction on management’s part.
  • TAC Consumer reported 19% earnings growth (to Bt42m) despite a 7% revenue decline. The company was quite positive on H2’20 given the re-opening of the economy, though they did face limitations in signing up new characters for their merchandising and premium business.

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Brief Thailand: MINOR and TAC Consumer Navigate the Pandemic and more

By | Daily Briefs, Thailand

In this briefing:

  1. MINOR and TAC Consumer Navigate the Pandemic
  2. AOT: Still a Valid Proxy for Tourism?

1. MINOR and TAC Consumer Navigate the Pandemic

Ralikuma

Minor called a shareholder meeting to update on the recent capital management program which included a combination of bond and warrants issuance. We also checked on TAC Consumer, a small cap stock that typically rides on CP All’s coattails.

  • MINT’s US$300m perpetual bonds was 11x oversubscribed despite offering a modest rate of only 3.1% and including a 3-year call option, largely because it had a guarantee by the similarly rated Bangkok Bank. The company also requested that Banks waive the quarterly covenant test.
  • Equity increase. The company is also offering 563m new shares at Bt18.9/sh (give or take 10%) for every 8.2 existing shares and one warrant for every 17 existing shares, which expire in 3 years. These measures should give them more than ample capital to weather the pandemic. So far, operating cash outflow was only Bt1.4m in March and April, so we actually consider this a bit of an over-reaction on management’s part.
  • TAC Consumer reported 19% earnings growth (to Bt42m) despite a 7% revenue decline. The company was quite positive on H2’20 given the re-opening of the economy, though they did face limitations in signing up new characters for their merchandising and premium business.

2. AOT: Still a Valid Proxy for Tourism?

Image 80730589831592956625075

If the country were to change its target to the wealthy clients then the question is whether Airports of Thailand (AOT TB) going to be a good proxy for tourism’s sweet spot in Thailand? Before COVID-19 break, Thailand’s tourism scene was popular with the Chinese middle class and tons of backpackers from all over the world thanks, partly to a couple of Hollywood movies such as The Beach and Hangover Part II that presented the world with the opposite views of what the country has to offer for tourists. 

The Civil Aviation Authority of Thailand (CAAT) recently mentioned that the ban on commercial international flights might not be lifted on July 1st as previously planned, and if at some point the ban will be lifted, business travelers will likely be the first allowed to travel. 

Concession service (26% contribution) will be reduced by 20% and 50% EBITDA followed by 15 ppts EBITDA margin reduction as the company extended rent holiday to its tenants. 

The bigger question is whether AOT is still a good proxy for Thai tourism given the predictably muted growth in the tourist arrival and the Tourism Ministry’s aim to focus on the quality rather than quantity? It is likely that peers such as Minor International (MINT TB) , Central Plaza Hotel (CENTEL TB) , Central Pattana Pub (CPN TB), or Bangkok Dusit Medical Services (BDMS TB) to benefit from the shift in focus in the short run. In addition to that, AOT is trading at 50%, 97%, and 65% premium in PER, PBR, and EV/EBITDA multiples to the Thai Tourism stock peers. No rush on having AOT in my portfolio. 

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Brief Thailand: MINOR and TAC Consumer Navigate the Pandemic and more

By | Daily Briefs, Thailand

In this briefing:

  1. MINOR and TAC Consumer Navigate the Pandemic
  2. AOT: Still a Valid Proxy for Tourism?
  3. Sri Trang Gloves IPO: Valuation Insights

1. MINOR and TAC Consumer Navigate the Pandemic

Ralikuma

Minor called a shareholder meeting to update on the recent capital management program which included a combination of bond and warrants issuance. We also checked on TAC Consumer, a small cap stock that typically rides on CP All’s coattails.

  • MINT’s US$300m perpetual bonds was 11x oversubscribed despite offering a modest rate of only 3.1% and including a 3-year call option, largely because it had a guarantee by the similarly rated Bangkok Bank. The company also requested that Banks waive the quarterly covenant test.
  • Equity increase. The company is also offering 563m new shares at Bt18.9/sh (give or take 10%) for every 8.2 existing shares and one warrant for every 17 existing shares, which expire in 3 years. These measures should give them more than ample capital to weather the pandemic. So far, operating cash outflow was only Bt1.4m in March and April, so we actually consider this a bit of an over-reaction on management’s part.
  • TAC Consumer reported 19% earnings growth (to Bt42m) despite a 7% revenue decline. The company was quite positive on H2’20 given the re-opening of the economy, though they did face limitations in signing up new characters for their merchandising and premium business.

2. AOT: Still a Valid Proxy for Tourism?

Image 80730589831592956625075

If the country were to change its target to the wealthy clients then the question is whether Airports of Thailand (AOT TB) going to be a good proxy for tourism’s sweet spot in Thailand? Before COVID-19 break, Thailand’s tourism scene was popular with the Chinese middle class and tons of backpackers from all over the world thanks, partly to a couple of Hollywood movies such as The Beach and Hangover Part II that presented the world with the opposite views of what the country has to offer for tourists. 

The Civil Aviation Authority of Thailand (CAAT) recently mentioned that the ban on commercial international flights might not be lifted on July 1st as previously planned, and if at some point the ban will be lifted, business travelers will likely be the first allowed to travel. 

Concession service (26% contribution) will be reduced by 20% and 50% EBITDA followed by 15 ppts EBITDA margin reduction as the company extended rent holiday to its tenants. 

The bigger question is whether AOT is still a good proxy for Thai tourism given the predictably muted growth in the tourist arrival and the Tourism Ministry’s aim to focus on the quality rather than quantity? It is likely that peers such as Minor International (MINT TB) , Central Plaza Hotel (CENTEL TB) , Central Pattana Pub (CPN TB), or Bangkok Dusit Medical Services (BDMS TB) to benefit from the shift in focus in the short run. In addition to that, AOT is trading at 50%, 97%, and 65% premium in PER, PBR, and EV/EBITDA multiples to the Thai Tourism stock peers. No rush on having AOT in my portfolio. 

3. Sri Trang Gloves IPO: Valuation Insights

Val

Sri Trang Gloves (STGT TB) is the third-largest manufacturer of gloves in the world and the largest manufacturer of gloves in Thailand. It is seeking to raise $481 million at a fixed price of THB34.00 per share. The IPO period will run between 23-25 June and the first trading day is slated for 2 July.

In our initiation note, we stated that Sri Trang has attractive fundamentals. Our valuation analysis suggests that the IPO price is attractive and we would be inclined to participate in the IPO.

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Brief Thailand: GULF: Short Term Negative Sentiments from Capital Increase and more

By | Daily Briefs, Thailand

In this briefing:

  1. GULF: Short Term Negative Sentiments from Capital Increase
  2. Banking Systems Brace for COVID-19 Legacies as Asset Impairment and Weaker Profitability Loom Large
  3. CHAYO: When the Going Gets Tough, CHAYO Gets Going
  4. BCP: Offers Cheap Valuation with Earnings Upcycle Ahead in 2H20
  5. Gulf Energy Placement – No Big Deal

1. GULF: Short Term Negative Sentiments from Capital Increase

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We see the fall in GULF’s share price by 9% due to the news on capital increase and ADB’s divestment of stake in GULF as an opportunity for accumulative buying given there is minimal impact to our valuation. Thus, we maintain our positive outlook and recommend BUY with a target price of Bt45.4 derived using sum-of-the-parts (SOTP) methodology, implying a 78x PE’21.

Story:

  • GULF announced increase of paid-up capital from Bt10.66bn to Bt11.73bn by issuing new 1.07bn common shares through rights offering.
  • Limited impact on GULFS valuation from ADB’s divestment of 1.7% stake in the company.

2. Banking Systems Brace for COVID-19 Legacies as Asset Impairment and Weaker Profitability Loom Large

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Globally, banking systems are facing threats to their profitability due to an uncertain economic outlook and continued pressure on their net interest margins. Credible fiscal policy support could be critical to supporting the economic recovery, as well as preventing the onset of structurally lower banking profitability via over-reliance on extraordinary monetary accommodation. Some impairment to banking system assets is inevitable in the aftermath of the COVID-19 pandemic, particularly in emerging markets.

Financial conditions have improved significantly in emerging markets, but the risk of individual banking system asset impairment varies considerably on a country-by-country basis. Those countries at risk of permanent output losses due to the COVID-19 pandemic, accentuated by poor political decisions, will experience the highest incidence of falling asset quality.
Asset impairment in Asia Pacific banks will be affected by China’s impact on regional economic activity, as well as the lifting of forbearance policies, while India’s banks will probably suffer the largest losses in 2021 due to lingering bad loans. Meanwhile, the fate of Latin American banking asset quality could be the hands of governments’ ability to support economic activity via fiscal easing, particularly easing the plight of small businesses and the self-employed.
European banks’ problems vary idiosyncratically on a country-by-country basis, such as structurally low profitability in Germany and relatively low operating efficiency in France. The speed of the European economic recovery will determine the magnitude of credit losses, but banks will accept all offers of assistance from policymakers and regulators. 
US banking profits were heavily assisted in Q2 by the big disconnection between financial markets and the real economy, but reimposed lockdowns could undermine the buoyancy of capital markets by delaying the economic recovery. Capital buffers are generally better at US banks and will be further enhanced by the banning of buybacks and capping of dividends, thereby ensuring adequate lending capacity for the real economy.

3. CHAYO: When the Going Gets Tough, CHAYO Gets Going

Slide13

We initiate coverage on CHAYO with a SELL recommendation based on a target price of Bt6.90, implying a downside of 12% from the current price. We derive our target price from the PB/ROE of Thai Diversified Financials and apply a 15% small-cap discount.

Investment thesis:

  • Rising level of bad loans in Thailand can boost core business
  • Economic uncertainty helps to expand the customer base for debt collection
  • Debt collection to further benefit from increasing mobile usage
  • High growth is priced in, warrant exercise to fund growth

Risks: Increased competition in acquiring non-performing loans, loss from unsecured debt management, adverse regulatory changes, and potential litigation issues arising from debt collection service. A risk to our recommendation is that sentiment drives the share price considerably higher.

4. BCP: Offers Cheap Valuation with Earnings Upcycle Ahead in 2H20

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We reinitiate coverage of BCP with a BUY rating, based on a 2021E target price of Bt25, which is derived from a sum-of-the-parts (SOTP) methodology. Our valuation implies 0.8xPBV’21E, a 20% discount to the Thai energy sector.

The story:

  • Full-swing earnings recovery by 2H20
  • Refinery segment on recovery path
  • Secured stable income from power-generation arm
  • Added stability & growth from marketing business
  • Unlocking value of biofuel business with BBGI spinoff
  • Cheap valuation and attractive dividend yield

Risks:

  • Raw material price fluctuation
  • Possibility of impairment losses from investment projects

5. Gulf Energy Placement – No Big Deal

Image 85077132941595419579577

Asian Development Bank (ADB) is looking to sell 176m shares in Gulf Energy Development Public Company (GULF TB), worth about US$200m. Post selldown, ADB will still have about 1.35% of stake in GULF. 

In this note, we will look at deal dynamics, recent performance, and run the deal through our framework.

We have covered GULF’s IPO in:

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Brief Thailand: AOT: Still a Valid Proxy for Tourism? and more

By | Daily Briefs, Thailand

In this briefing:

  1. AOT: Still a Valid Proxy for Tourism?
  2. Sri Trang Gloves IPO: Valuation Insights

1. AOT: Still a Valid Proxy for Tourism?

Image 80730589831592956625075

If the country were to change its target to the wealthy clients then the question is whether Airports of Thailand (AOT TB) going to be a good proxy for tourism’s sweet spot in Thailand? Before COVID-19 break, Thailand’s tourism scene was popular with the Chinese middle class and tons of backpackers from all over the world thanks, partly to a couple of Hollywood movies such as The Beach and Hangover Part II that presented the world with the opposite views of what the country has to offer for tourists. 

The Civil Aviation Authority of Thailand (CAAT) recently mentioned that the ban on commercial international flights might not be lifted on July 1st as previously planned, and if at some point the ban will be lifted, business travelers will likely be the first allowed to travel. 

Concession service (26% contribution) will be reduced by 20% and 50% EBITDA followed by 15 ppts EBITDA margin reduction as the company extended rent holiday to its tenants. 

The bigger question is whether AOT is still a good proxy for Thai tourism given the predictably muted growth in the tourist arrival and the Tourism Ministry’s aim to focus on the quality rather than quantity? It is likely that peers such as Minor International (MINT TB) , Central Plaza Hotel (CENTEL TB) , Central Pattana Pub (CPN TB), or Bangkok Dusit Medical Services (BDMS TB) to benefit from the shift in focus in the short run. In addition to that, AOT is trading at 50%, 97%, and 65% premium in PER, PBR, and EV/EBITDA multiples to the Thai Tourism stock peers. No rush on having AOT in my portfolio. 

2. Sri Trang Gloves IPO: Valuation Insights

Val

Sri Trang Gloves (STGT TB) is the third-largest manufacturer of gloves in the world and the largest manufacturer of gloves in Thailand. It is seeking to raise $481 million at a fixed price of THB34.00 per share. The IPO period will run between 23-25 June and the first trading day is slated for 2 July.

In our initiation note, we stated that Sri Trang has attractive fundamentals. Our valuation analysis suggests that the IPO price is attractive and we would be inclined to participate in the IPO.

You are currently reading Executive Summaries of Smartkarma Insights.

Want to read on? Explore our tailored Smartkarma Solutions.

Brief Thailand: AOT: Still a Valid Proxy for Tourism? and more

By | Daily Briefs, Thailand

In this briefing:

  1. AOT: Still a Valid Proxy for Tourism?
  2. Sri Trang Gloves IPO: Valuation Insights
  3. Sri Trang Gloves IPO Initiation: A Rising Tide

1. AOT: Still a Valid Proxy for Tourism?

Image 80730589831592956625075

If the country were to change its target to the wealthy clients then the question is whether Airports of Thailand (AOT TB) going to be a good proxy for tourism’s sweet spot in Thailand? Before COVID-19 break, Thailand’s tourism scene was popular with the Chinese middle class and tons of backpackers from all over the world thanks, partly to a couple of Hollywood movies such as The Beach and Hangover Part II that presented the world with the opposite views of what the country has to offer for tourists. 

The Civil Aviation Authority of Thailand (CAAT) recently mentioned that the ban on commercial international flights might not be lifted on July 1st as previously planned, and if at some point the ban will be lifted, business travelers will likely be the first allowed to travel. 

Concession service (26% contribution) will be reduced by 20% and 50% EBITDA followed by 15 ppts EBITDA margin reduction as the company extended rent holiday to its tenants. 

The bigger question is whether AOT is still a good proxy for Thai tourism given the predictably muted growth in the tourist arrival and the Tourism Ministry’s aim to focus on the quality rather than quantity? It is likely that peers such as Minor International (MINT TB) , Central Plaza Hotel (CENTEL TB) , Central Pattana Pub (CPN TB), or Bangkok Dusit Medical Services (BDMS TB) to benefit from the shift in focus in the short run. In addition to that, AOT is trading at 50%, 97%, and 65% premium in PER, PBR, and EV/EBITDA multiples to the Thai Tourism stock peers. No rush on having AOT in my portfolio. 

2. Sri Trang Gloves IPO: Valuation Insights

Val

Sri Trang Gloves (STGT TB) is the third-largest manufacturer of gloves in the world and the largest manufacturer of gloves in Thailand. It is seeking to raise $481 million at a fixed price of THB34.00 per share. The IPO period will run between 23-25 June and the first trading day is slated for 2 July.

In our initiation note, we stated that Sri Trang has attractive fundamentals. Our valuation analysis suggests that the IPO price is attractive and we would be inclined to participate in the IPO.

3. Sri Trang Gloves IPO Initiation: A Rising Tide

Gross%20margin

Sri Trang Gloves (STGT TB) is the third-largest manufacturer of gloves in the world and the largest manufacturer of gloves in Thailand. It is seeking to raise $481 million at a fixed price of THB34.00 per share. The IPO period will run between 23-25 June and the first trading day is slated for 2 July.

Sri Trang was a beneficiary of the corona pandemic resulting in an exceptional 1Q20. Overall, we think the fundamentals are attractive. 

You are currently reading Executive Summaries of Smartkarma Insights.

Want to read on? Explore our tailored Smartkarma Solutions.

Brief Thailand: Banking Systems Brace for COVID-19 Legacies as Asset Impairment and Weaker Profitability Loom Large and more

By | Daily Briefs, Thailand

In this briefing:

  1. Banking Systems Brace for COVID-19 Legacies as Asset Impairment and Weaker Profitability Loom Large
  2. CHAYO: When the Going Gets Tough, CHAYO Gets Going
  3. BCP: Offers Cheap Valuation with Earnings Upcycle Ahead in 2H20
  4. Gulf Energy Placement – No Big Deal
  5. E-Wallet Adoption Is Soaring from COVID, Catalyzing Southeast Asia Digital Economy Boom

1. Banking Systems Brace for COVID-19 Legacies as Asset Impairment and Weaker Profitability Loom Large

Option%20adjusted

Globally, banking systems are facing threats to their profitability due to an uncertain economic outlook and continued pressure on their net interest margins. Credible fiscal policy support could be critical to supporting the economic recovery, as well as preventing the onset of structurally lower banking profitability via over-reliance on extraordinary monetary accommodation. Some impairment to banking system assets is inevitable in the aftermath of the COVID-19 pandemic, particularly in emerging markets.

Financial conditions have improved significantly in emerging markets, but the risk of individual banking system asset impairment varies considerably on a country-by-country basis. Those countries at risk of permanent output losses due to the COVID-19 pandemic, accentuated by poor political decisions, will experience the highest incidence of falling asset quality.
Asset impairment in Asia Pacific banks will be affected by China’s impact on regional economic activity, as well as the lifting of forbearance policies, while India’s banks will probably suffer the largest losses in 2021 due to lingering bad loans. Meanwhile, the fate of Latin American banking asset quality could be the hands of governments’ ability to support economic activity via fiscal easing, particularly easing the plight of small businesses and the self-employed.
European banks’ problems vary idiosyncratically on a country-by-country basis, such as structurally low profitability in Germany and relatively low operating efficiency in France. The speed of the European economic recovery will determine the magnitude of credit losses, but banks will accept all offers of assistance from policymakers and regulators. 
US banking profits were heavily assisted in Q2 by the big disconnection between financial markets and the real economy, but reimposed lockdowns could undermine the buoyancy of capital markets by delaying the economic recovery. Capital buffers are generally better at US banks and will be further enhanced by the banning of buybacks and capping of dividends, thereby ensuring adequate lending capacity for the real economy.

2. CHAYO: When the Going Gets Tough, CHAYO Gets Going

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We initiate coverage on CHAYO with a SELL recommendation based on a target price of Bt6.90, implying a downside of 12% from the current price. We derive our target price from the PB/ROE of Thai Diversified Financials and apply a 15% small-cap discount.

Investment thesis:

  • Rising level of bad loans in Thailand can boost core business
  • Economic uncertainty helps to expand the customer base for debt collection
  • Debt collection to further benefit from increasing mobile usage
  • High growth is priced in, warrant exercise to fund growth

Risks: Increased competition in acquiring non-performing loans, loss from unsecured debt management, adverse regulatory changes, and potential litigation issues arising from debt collection service. A risk to our recommendation is that sentiment drives the share price considerably higher.

3. BCP: Offers Cheap Valuation with Earnings Upcycle Ahead in 2H20

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We reinitiate coverage of BCP with a BUY rating, based on a 2021E target price of Bt25, which is derived from a sum-of-the-parts (SOTP) methodology. Our valuation implies 0.8xPBV’21E, a 20% discount to the Thai energy sector.

The story:

  • Full-swing earnings recovery by 2H20
  • Refinery segment on recovery path
  • Secured stable income from power-generation arm
  • Added stability & growth from marketing business
  • Unlocking value of biofuel business with BBGI spinoff
  • Cheap valuation and attractive dividend yield

Risks:

  • Raw material price fluctuation
  • Possibility of impairment losses from investment projects

4. Gulf Energy Placement – No Big Deal

Image 85077132941595419579577

Asian Development Bank (ADB) is looking to sell 176m shares in Gulf Energy Development Public Company (GULF TB), worth about US$200m. Post selldown, ADB will still have about 1.35% of stake in GULF. 

In this note, we will look at deal dynamics, recent performance, and run the deal through our framework.

We have covered GULF’s IPO in:

5. E-Wallet Adoption Is Soaring from COVID, Catalyzing Southeast Asia Digital Economy Boom

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Earlier in the year, we published an in-depth analysis explaining how Southeast Asia’s digital economy could grow much faster than expected should it successfully adopt digital payments.

With COVID catalyzing a massive surge in e-wallet adoption and governments pushing to roll out cashless payments even faster,  we believe the region is currently at an inflection point that will finally see services such as e-commerce and online entertainment become mainstream staples.

You are currently reading Executive Summaries of Smartkarma Insights.

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Brief Thailand: Sri Trang Gloves IPO: Valuation Insights and more

By | Daily Briefs, Thailand

In this briefing:

  1. Sri Trang Gloves IPO: Valuation Insights
  2. Sri Trang Gloves IPO Initiation: A Rising Tide

1. Sri Trang Gloves IPO: Valuation Insights

Val

Sri Trang Gloves (STGT TB) is the third-largest manufacturer of gloves in the world and the largest manufacturer of gloves in Thailand. It is seeking to raise $481 million at a fixed price of THB34.00 per share. The IPO period will run between 23-25 June and the first trading day is slated for 2 July.

In our initiation note, we stated that Sri Trang has attractive fundamentals. Our valuation analysis suggests that the IPO price is attractive and we would be inclined to participate in the IPO.

2. Sri Trang Gloves IPO Initiation: A Rising Tide

Gross%20margin

Sri Trang Gloves (STGT TB) is the third-largest manufacturer of gloves in the world and the largest manufacturer of gloves in Thailand. It is seeking to raise $481 million at a fixed price of THB34.00 per share. The IPO period will run between 23-25 June and the first trading day is slated for 2 July.

Sri Trang was a beneficiary of the corona pandemic resulting in an exceptional 1Q20. Overall, we think the fundamentals are attractive. 

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