Stocks in the news (aq, bmcl, becl, bem, chow, drt, epg, hemraj, kcm, mcs, ml, polar, ratch, siri, stec, t, true, tvo) 30.09.15

AQ expects net profit this year after 2014 net loss of Bt285.61mn on backlog of Bt300- 400mn. It plans to launch a new project “AQ Shadi Phaholyothin-Rangsit” in 2H15. (Thun Hoon, 30/09/15)
Comment: Despite the quality of its projects, the stock is rather expensively valued.
BECL expects the cabinet will okay the merger with BMCL in October. It expects BEM (Bangkok Expressway and Metro Plc) will begin to trade in January 2016. (Khao Hoon, 30/09/15)
Comment: There’s nothing new here in terms of stories nor valuation, in the end its a good move for CK to not have to inject additional capital into BMCL
CHOW has done a JV with BCP to invest in a 50MW solar power plant in Japan. It will invest no more than Bt380mn. (Khao Hoon, 30/09/15)
DRT expects sales to peak in 2016 although 2015 sales may be hurt by the economic slowdown. It plans to expand abroad. It targets exports to comprise 30% of revenue within three years. It expects to benefit from the government’s stimulus. (Thun Hoon, 30/09/15)
Comment: That’s rather ambitious by DRT, unless the Thai portion of the business is going to collapse. 

Continue reading Stocks in the news (aq, bmcl, becl, bem, chow, drt, epg, hemraj, kcm, mcs, ml, polar, ratch, siri, stec, t, true, tvo) 30.09.15

Stocks in the news (bjc, chow, earth, forth, hemraj, ktp, malee, planb, rs, susco, tapac, trubb) 29.09.15

BJC is talking to many prospective partners (in Laos, Vietnam, Cambodia) to take over local and international companies, which is expected to be finalized soon. It has budgeted Bt2.25bn for investment. It expects 2015 revenue to grow 10% as targeted. (Thun Hoon, 29/09/15)
CHOW is talking to prospective partner to invest in solar power plant. It targets capacity of 200MW by 2016. It expects 3Q15 earnings to be peak, aided by large orders in steel and selling electricity. It expects 2015 earnings to be good. It plans to list subsidiaries next year. (Thun Hoon, 29/09/15)
Comment: I’m still incredibly impressed by their shift to solar and their openness to expand internationally
EARTH is considering investing solar energy business in Italy which it expects to be concluded soon. It targets five coal mines in five countries within five years. (Thun Hoon, 29/09/15)
Comment: And yet what is management doing with their shares? I don’t quite feel very comfortable with their practises.
FORTH expects some 3Q15 earnings growth on the back of new projects. It plans to bid for a Bt500mn job at the end of this year. It expects 2015 revenue to achieve target of Bt5bn. It plans to increase revenue by managing 4G network systems. (Thun Hoon, 29/09/15)
Comment: And again the real value here is purely in FSMART more than anything else 

Continue reading Stocks in the news (bjc, chow, earth, forth, hemraj, ktp, malee, planb, rs, susco, tapac, trubb) 29.09.15

Stocks in the news (cho, ck, egco, eforl, hemraj, hmpro, ifec, qtc, singer, sport, syntec, tcmc, thani, tks, tpoly) 28.09.15

CHO expects to sign NGV bus contract, worth Bt1.735mn in mid-October. It expects to bid for more electric bus projects. It maintains 2015 revenue growth of 10% with Bt600bn backlog. (Khao Hoon, 28/09/15)
Comment: Again wonderfully positioned to benefit from this NGV bus , BUT post these sales earnings will decline to what they normally are.

CK says it is ready for upcoming mega projects valued at Bt200bn which is expected to be approved by the cabinet soon. It expects the M&A between BECL and BMCL to be done after the PPP Act has been approved. (Thun Hoon, 28/09/15)
Comment: Every contractor is loving these mega projects and in reality there isn’t a capacity constraint.

EGCO expects 2H5 earnings to be better than 1H15. It expects 2015 net profit to be close to 2014’s Bt7.7bn. It plans to construct more 6-7 projects, 1,700MW in capacity from the existing 3,700MW. It targets capacity of 5,000MW in 2019. (Khao Hoon, 28/06/15)

EFORL expects 2H15 to turn around on the back of large orders, decreasing cost, and extra gain from selling WCIH shares. It expects 2015 net profit of Bt255mn. (Khao Hoon, 28/09/15)

Continue reading Stocks in the news (cho, ck, egco, eforl, hemraj, hmpro, ifec, qtc, singer, sport, syntec, tcmc, thani, tks, tpoly) 28.09.15

Management Trades 21/09 – 25/09

Notables Transactions

Buy(s) THB 108 mn

  • SCC – Quite the story last week with SCB having to sell of their stake in SCC to cover the losses from SSI, no surprise that K. Yos took advantage of the volatility
  • AUCT – And he’s still at it, he is adamant that AUCT will dominate the world at one point. We aren’t…
  • RS – The owner is a constant buyer at these levels

Sell(s) THB 1,867 mn

  • NYT – HUGE sale for NYT, we don’t know if its a switch to a personal holding company or a shipping co (new listings say NYK Limited)
  • JAS – Any surprise that the owner is selling? Nope.


Co Visit: Singha Estate Plc (S)

Singha Estate takes ‘PRIDE’ in three-pronged model

Singha Estate Plc (S) is a lifestyle developer that builds quality settings for people to live, play, work and shop. Chief executive Naris Cheyklin discusses the company’s strategy and outlook.
Please explain Singha Estate’s history.
Singha Estate is a real estate investment and development company and the property arm of Boon Rawd Brewery Co. The company was created through a reverse acquisition of Rasa Property Development Plc and the entire business transfer of companies under Boon Rawd Brewery Co and Khun Santi Bhirombhakdi. Real estate has been a part of the group’s overall business portfolio, and given that the dynamic of this industry is capital-intensive and long-term focused, the group is well-positioned and confident of rising to the challenge of making Singha Estate a prominent real estate and development company in Thailand and the region.

Please explain Singha Estate’s business model.


Naris: Leery of risks in current market

Our focus is on the three major sectors of the real estate industry: residential, commercial and hospitality. With residential our aim is to reinforce our expertise and build a quality-oriented brand with both low-rise and high-rise projects. On commercial we want to further capitalise on our team’s retail and commercial asset management expertise with office buildings and mixed-use properties. And finally, with hospitality the aim is to optimise hospitality assets — capitalising on existing properties and enhancing their value through refurbishment and room expansion. This type of property provides a strong recurring earnings platform to Singha Estate for future expansion. With each sector our aim is to continue expanding either via greenfield or brownfield projects.
Could you provide information on your existing and potential future projects?
For low-rise residential, Nirvana has 10 existing projects with a total remaining project value of 11 billion baht. For high-rise residential we are launching The Esse Asoke, a condominium project located on a 2.5-rai land plot on Asok-Montri, which has a project value of over 4 billion baht. For hospitality we have a 78-key premium asset on Koh Samui, the Santiburi Beach Resort & Spa, a five-star hotel that has been fully refurbished and relaunched in December 2014. We recently acquired a 112-key resort on Koh Phi Phi, the Phi Phi Island Village Beach Resort, which is undergoing a refurbishment and key addition. Finally, with commercial we have three ongoing projects: The Lighthouse, an existing retail space whose renovation is due to be complete in October 2015; Suntowers Complex, a recently acquired large-scale office complex with an investment value of 4.6 billion baht; and Singha Complex, a mixed-use development comprising a Grade A office tower with small retail space. The latter is located on an 11-rai land plot at the Asok-Phetchaburi intersection (previously the Japanese embassy) and is due to launch in the first half of 2018.

Continue reading Co Visit: Singha Estate Plc (S)

William Heinecke Remains Optimistic

A nice little article over at Forbes yesterday interviewing Heinecke and including comments from other executives and analysts on the region. Here are some snippets and a link to the full article.

  • “These emerging markets still have a lot of gas to go.”
  • “Our major clients are not expanding in Thailand,” says Phisud Dejakaisaya, managing partner at Siam Premier law firm in Bangkok. “Instead, they are expanding in Laos and Myanmar, where we also have offices. Only the Japanese, who are already heavily invested, seem to be increasing their market share.”
  • “You don’t see government [woes] changing the face of tourism,” Heinecke contends.
  • China, he offers, powered through its Industrial Revolution in 20 years–much faster than the West did. Now it pauses to readjust. Likewise, the world has to give ASEAN integration time. “Remember, it’s new–relative to the European Union and the United States,” he says. “It will benefit from starting later in life.”
  • “Frankly, I am more concerned about the U.S. economy, which may be at an alltime peak,” he says, noting that Minor International is not invested there. “Look at the New York unions. Why would we want to go there? Now is not the time to buy America. It must slow down as we see ASEAN accelerate.”

Source: Forbes

Stocks in the news (Age, auct, bland, brock, ea, gold, gunkul, irc, ivl, sccc, siri, stec, svi, tfd, twz) 25.09.15

AGE signals a turnaround in coal business, aiming to broaden customer base domestically and internationally. The company expects 3Q15 earnings to be better than Bt34mn made in 1H15, with full-year targeted at Bt100mn backed by better cost control. (Thun Hoon, 25/09/15)
Comment: In theory they should only be making a margin on the logistics of coal
AUCT expects 2H15 earnings to be better than 1H15, with 2015F revenue growth targeted at 20%. (Khao Hoon, 25/09/15)
Comment: Perhaps one of the best asset light business models in Thailand today.
BLAND expects 2QFY15 to be good backed by high demand for exhibition and concert. It plans to construct an outdoor ocean park at Muang Thong Thani (150-200 rai) to serve clients at its hotels. It expects hotel to be finished in 2017, capacity of 1,200-1,300 rooms. (Thun Hoon, 25/09/15)
BROCK expects 2015 revenue to grow 10% from last year of Bt87.98mn aided by transfers. It is talking to prospective partner to invest in mega project. (Thun Hoon, 25/09/15)
EA expects 3Q15 earnings to be higher than Bt2bn. It expects 2015 revenue to grow 50% from last year backed by solar farm at Lampang. It targets capacity of 664MW in 2018. It expects to get a800MW PPA. (Thun Hoon, 25/09/15)
Comment: Nothing new here, move on.

Continue reading Stocks in the news (Age, auct, bland, brock, ea, gold, gunkul, irc, ivl, sccc, siri, stec, svi, tfd, twz) 25.09.15

WHTW: Top 10

  1. BoT orders SSI creditors to obey rules – The Bank of Thailand has instructed creditors of debt-ridden Sahaviriya Steel Industries Plc (SSI) to also set aside loan loss provisions for the parent company of SSI UK by the end of this month to comply with regulations. The lenders are required by law to set aside reserves for lending to the parent company, but after a 60% deduction of collateral value, said Ronadol Numnonda, an assistant governor of the central bank’s supervision group. Krungthai Bank (KTB), Siam Commercial Bank (SCB) and Tisco Bank must put aside 100% in reserves for the entire amount of 28 billion baht lent to SSI’s British subsidiary without deductions for collateral, he said. The full provision coverage for the SSI UK loan, however, is bound not by a rule but by a mutual agreement between the lenders and the central bank. The three banks lent a combined 48.4 billion baht to SSI and SSI UK. (Bangkok Post, 24/9/15)
  2. FTI chairman Supant Mongkolsuthree said the Thai Industries Sentiment Index dropped to 82.4 in August, from 83.0 in the previous month, its eighth consecutive monthly decline. However, the sub-index on expectations on the next three months edged up to 102.0 from 101.2 in July. Scores above 100 indicate positive sentiment. (The Nation, 22/9/15 )
  3. NSF seeks B1.5bn in new funding – The National Savings Fund (NSF) will ask for an additional 1.5 billion baht from the government to pay for the matching contributions for its members following higher-than-expected applications. (Bangkok Post, 22/9/15)
  4. Super cluster ‘specials’ – High-tech industries in line for more tax perks. The government may offer special corporate income tax exemption for 10-15 years to major industries located in proposed “super clusters”. (Bangkok Post, 23/9/15)
  5. UK interest rates likely to go up, says George Osborne – Chancellor says loose monetary policy to end due to UK and US economic success following suggestions China slowdown could keep rates down. British interest rates are more likely to go up than down thanks to the success of the UK and US economies, George Osborne has said, as he toured China to foster closer political and business ties. (The Guardian, 22/9/15)
  6. Caixin flash China general manufacturing PMI hits 78-month low in September – The Caixin flash China general manufacturing PMI plunged to 78-month low at 47.0 in September from 47.3 in August, a preliminary Caixin survey showed on Wednesday. (Xinhua, 23/9/15)
  7. The 28-nation European Union’s (EU) seasonally-adjusted current account surplus stood at 12 billion euros (13.65 billion U.S. dollars) in July, down from 14.6 billion euros in the previous month, the EU statistical office Eurostat said on Friday. (Xinhua, 18/9/15)
  8. China injects 50 bln RMB into market – China’s central bank pumped 50 billion yuan (7.85 billion U.S. dollars) into the money market via reverse repurchase agreement (repo) on Tuesday, the first cash injection this week. The yield for the seven-day reverse repo stood at 2.35 percent, according to a statement of the People’s Bank of China (PBOC). (Xinhua, 22/9/15)
  9. The China Banking Regulatory Commission (CBRC), the country’s top banking regulator, announced on Tuesday that it has revised the measures on commercial banks’ liquidity risk management, and the revised measures (fore trial implementation) will become effective as from October 1, 2015. The measures stipulate that commercial banks’ liquidity coverage ratio should reach at least 100 percent by the year of 2018. As a transition, the liquidity coverage ratio should reach 60 percent by end-2014, 70 percent by end-2015, 80 percent by end-2016 and 90 percent by end-2017. (Xinhua, 22/9/15)
  10. DB cuts developing Asia growth forecast to 5.8 pct in 2015 – The Asian Development Bank (ADB) has slashed its economic growth forecast for developing Asia this year to 5.8 percent from 6.3 percent forecast in March. In its updated Asian Development Outlook 2015 released Tuesday, the Manila-based lending agency attributed the “headwinds” in developing Asia on currency pressures and worries about capital outflows. (Xinhua, 22/9/15)

Bill Gross says Hike Rates damnit!

Bill Gross’s latest monthly paper is out, as usual it contains great thoughts and this month its all about the Fed and the impact of low interest rates and the issues that come with it, see below for snippets and a link to the paper.

  • “financial repression”, long stretches of years and in some cases decades where short-term and even long-term yields were capped and suppressed below the level of inflation. In the U.S. the most recent repressive cycle extended from 1930 to 1979, nearly half a century during which investors on average earned 1.5% less than the rate their principal was eroding due to inflation. It was a savers nightmare.
  • Because zero bound interest rates destroy the savings function of capitalism, which is a necessary and in fact synchronous component of investment
  • My advice to them is this: get off zero and get off quick. Will 2% Fed Funds harm
    corporate America that has already termed out its debt? A little. Will stock and bond prices go down?

Source: Janus Capital Group