WHTW: Top 10

  • 5% GDP growth target set for 2017-21—The12th National Economic and Social Development Plan (2017-21) has set targets of 5% annual GDP growth and per capita income of US$8,200 (286,200 baht), up from $6,000 now. (Bangkok Post, 25/07/16)
  • First-half loan loss provisions sufficient to handle rise in NPLs in second half, central bank says – LOAN-LOSS reserves put in place by the banking sector in the first half of the year are sufficient to cope with a rise in non-performing loans (NPLs) in the second half, Tongurai Limpiti, Bank of Thailand deputy governor for financial institutions’ stability, has said. (The Nation, 25/07/16)
  • NINE BID FOR ORANGE LINE – Nine private companies have bought bid envelopes to construct the Orange Line electric train route linking the Thailand Cultural Centre to Min Buri district in eastern Bangkok. (Bangkok Post, 24/07/16)
  • Cabinet approves Bt44-billion rail projects – THE CABINET yesterday approved construction of two Bangkok urban rail lines worth Bt44.16 billion, part of a larger infrastructure initiative by the ruling junta as it seeks to revive the sluggish economy. (The Nation, 27/7/16)
  • Section 44 urged for rice sales – The government is being urged to exercise the powerful Section 44 of the interim charter to cut red tape and speed up sales of state rice stocks. (Bangkok Post, 27/7/16)
  • Tourism, investment to atone for exports — Despite a deeper cut in its export forecast, the Fiscal Policy Office (FPO) has maintained its economic growth projection of 3.3% this year as ramped-up state investment and the robust tourism industry are expected to offset sagging outbound shipments. (Ba ngkok Post, 29/7/16)

Continue reading WHTW: Top 10

Random Thoughts: A busy Government, Governance Principles, Tenbaggers in Asia

The Thai Government has been rather busy with policies, reforms, projects etc etc just look at the list of things announced in the past 2-3 weeks
First infrastructure investment, we have bidding terms for the southern double-track thats worth some THB 16.5 bn
http://www.bangkokpost.com/news/general/1036445/bidding-terms-for-b16-5bn-southern-double-track-this-month, then the Eastern Economic Corridor which spans the three eastern provinces of Chon Buri, Rayong and Chachoengsao which is supposed to be a leading economic zone for industrial, infrastructure and urban development and require some THB 300 bn of state funds for investments
http://www.bangkokpost.com/business/news/1035225/eec-draft-set-to-be-put-before-cabinet. Second on increasing taxes they are mulling a fee hike for the chicken industry that would increase costs by some THB 480 mn a month for the CP, GFPTs of Thailand and of course the burden will be shifted to the consumer whom may end up paying +8% more for fresh poultry http://www.bangkokpost.com/business/news/1035209/poultry-operators-fret-over-fee-increase-plan. Thirdly, not to completely screw over consumes, they’ve also announced that some naughty telco’s (read: all of them) have been overcharging us poor citizens and that we should all be reimbursed http://www.bangkokpost.com/business/telecom/1034921/reform-panel-demands-refund-of-phone-fees. Finally the Thailand Futures Fund has been approved by the cabinet with 10 billion baht as seed money for the 100-billion-baht Thailand Future Fund (TFF), which will invest in three road projects in the first stage. Of the 10 billion baht, 1 billion derived from Vayupak Fund 1’s dividends will be used to set up a revolving fund to guarantee a minimum return to TFF unit holders, while the remaining 9 billion will be raised from swapping shares held by the Vayupak Fund, said Ekniti Nitithanprapas, director-general of the State Enterprise Policy Office (Sepo).
So for a military government they aren’t doing too badly on pushing things through, although the question is of course, will anything be completely properly?
Corporate Governance Principles…..something that hit the Thai media quite strongly at the end of last year/beginning of this year in regards to the CPALL and MAKRO deal (looks like everyone has forgotten it as CPALL’s share price has rallied rather strongly). Folks such as Warren Buffet, Jamie Dimon, Larry Fink, Mary Barra are signing off on this recommended list of principles.

■ Truly independent corporate boards are vital to effective governance, so no board should be beholden to the CEO or management. Every board should meet regularly without the CEO present, and every board should have active and direct engagement with executives below the CEO level;

■ Diverse boards make better decisions, so every board should have members with complementary and diverse skills, backgrounds and experiences. It’s also important to balance wisdom and judgment that accompany experience and tenure with the need for fresh thinking and perspectives of new board members;

■ Every board needs a strong leader who is independent of management. The board’s independent directors usually are in the best position to evaluate whether the roles of chairman and CEO should be separate or combined; and if the board decides on a combined role, it is essential that the board have a strong lead independent director with clearly defined authorities and responsibilities;

■ Our financial markets have become too obsessed with quarterly earnings forecasts. Companies should not feel obligated to provide earnings guidance — and should do so only if they believe that providing such guidance is beneficial to shareholders;

■ A common accounting standard is critical for corporate transparency, so while companies may use non-Generally Accepted Accounting Principles (“GAAP”) to explain and clarify their results, they never should do so in such a way as to obscure GAAP-reported results; and in particular, since stock- or options-based compensation is plainly a cost of doing business, it always should be reflected in non-GAAP measurements of earnings; and

■ Effective governance requires constructive engagement between a company and its shareholders. So the company’s institutional investors making decisions on proxy issues important to long-term value creation should have access to the company, its management and, in some circumstances, the board; similarly, a company, its management and board should have access to institutional investors’ ultimate decision makers on those issues.
Bloomberg just realised 10 baggers exist in Asia, something that local participants in this region have known for years….
That’s impressive, considering the most recent four-year period has been marked by an abrupt slowdown in the region’s growth. For investors smart enough to steer clear of pump-and-dump schemes, the rewards can be many times what larger companies can provide. Only seven out of more than 1,700 Asian stocks with a market value of more than $1 billion eight years ago have been tenbaggers in the last eight years. Just one of those — South Korean drugmaker Hanmi Science — has also been at least a fivebagger in the past 48 months.

Stocks in the news (a, bgt, earth, fsmart, lalin, lhbank, q-con, max, mcs, mint, pttep, thani, world) 29.07.16

A
A expects 2016 net profit to mark a record high despite the slowdown in 2Q16 sales. It plans to launch 3-4 new projects, valued at Bt2bn. It expects 2016 sales to reach Bt6bn. It targets revenue to hit Bt10bn within three years. (Thun Hoon, 29/07/16)
Comment: It is rather incredible how this property developer started with effectively nothing back in ’97 to achieve these levels of revenues
 
BGT
BGT expects to show a net profit this year thanks to strong growth in sales in 1H16. It plans to launch new products throughout the rest of the year. It targets revenue to grow 15%. It plans to expand to Myanmar with two new branches. (Thun Hoon, 29/07/16)
Comment: A forgotten consumer brand retailer if there was one. One can guess that they’ve struggled with the advent of the new brands hitting the Thai market in the past 5 years
 
EARTH
EARTH expects 2H16 earnings to be good backed by numerous orders and seasonality. It plans to expand to China where it is getting orders amounting to Bt4-6bn/year. (Thun Hoon, 29/07/16)
FSMART
FSMART expects to report its earnings on Aug 11. It expects 2Q16 revenue and profit to record a new high, supported by more top-ups and the addition of 78,000 on-line top-up machines. It will sell 2018 FIFA World Cup Russia tickets on Aug 1. (Kao Hoon, 29/07/16)
Comment: And this compounding machine continues to grow
 
LALIN
LALIN plans to launch new projects to handle demand in 2H16. It expects demand to grow from public transportation. It expects 2016 revenue to grow 15%. Work on hand of Bt700-800mn is expected to be booked this year. (Thun Hoon, 29/07/16)

Continue reading Stocks in the news (a, bgt, earth, fsmart, lalin, lhbank, q-con, max, mcs, mint, pttep, thani, world) 29.07.16

Interview: Karmarts Plc (KAMART)

Karmarts finds a beautiful formula for success

Karmarts Plc (KAMART) was first incorporated as Distar Electric in 1982 and listed on the Stock Exchange of Thailand in 1994. It changed its business focus to cosmetics in 2009 and changed its name to Karmarts Plc in 2011. Wongwiwat Theekhakhirikul, director and assistant managing director for business development, discusses the company’s strategy and outlook.

kamart

Please explain the history of Karmarts.

Karmarts originally started as an electrical appliance business with the Distar brand in 1982 and shifted to the business of NGV for automobiles in 2006 before we began to focus purely on consumer products in 2009 as a distributor of beauty and cosmetic products. In 2010 and 2011 we focused on marketing these products through traditional trade channels before expanding into franchising to create the Karmart brand. This has proved successful and we have continued to grow, expanding via modern trade and exporting to Asian countries, and in 2015 we incorporated a joint venture in Vietnam.

What is Karmarts’ business model?

Today we have more than 1,000 beauty products under our six house brands: Cathy Doll, Cathy Choo, Baby Bright, Jejuvita, Reunrom and Crayon. We also manage the distribution of other brands such as Missha. Our core distribution channels are our franchised Karmart shops, traditional trade to both retailers and wholesalers, modern trade, exports through joint ventures in China, Malaysia and Vietnam, and our online store.

We have 54 shops and by 2017 we aim to remodel all of our franchised locations to ensure that every shop has the same standard to further build the reputation and awareness of the brand.

Who are Karmarts’ target customers?

Typically, our customers are teenagers because of the product type, design and price point. Recently, we have been adding new products to cater to a more mature audience and with this strategy we aim for our brand to achieve the same levels of awareness as international brands in consumers’ minds. This will also expand our existing customer base.

Continue reading Interview: Karmarts Plc (KAMART)

Stocks in the news (aot, bcp, cpall, delta, ea, eason, hmpro, kce, mtls, pace, ptt, pttgc, scc, tpc, trt, tsr, vgi, wha) 27.07.16

AOT
AOT expects 3Q16 earnings growth of 16.3% YoY supported by tourism recovery and low oil price. It expects to benefit from competition between low-cost airlines. (Thun Hoon, 27/07/16)
BCP
BCP expects 2016 EBITDA from retail business grow to Bt3bn supported by low oil price. It has budgeted Bt15bn to expand and renovate its petrol stations. It has set a five-year target of 400 stations. It expects non-oil business to grow and plans to open a new supermarket under franchise from Europe by end-2016. (Thun Hoon, 27/07/16)
Comment: I do wonder if the outstanding growth from PTG has been behind the major players finally deciding to expand their stations throughout Thailand
 
CPALL
CPALL expects 3Q16 to be outstanding supported by 7-Eleven stamps that stimulated sales and expects 4Q16 earnings to be good supported by high season. (Thun Hoon, 27/07/16)
DELTA
DELTA reported 2Q16 net profit of Bt1.32bn, down 22%YoY due to lower sales. It has budgeted to invest in India. (Khao Hoon, 27/07/16)
EA
EA expects 2Q16 to be peak due to high season and expects revenue of Bt1bn. It believes that 2016 profit will be higher than last year. It expects 2016 capacity to reach 404MW and PPA 664MW. (Thun Hoon, 27/07/16)

Continue reading Stocks in the news (aot, bcp, cpall, delta, ea, eason, hmpro, kce, mtls, pace, ptt, pttgc, scc, tpc, trt, tsr, vgi, wha) 27.07.16

Random Thought: Fund flows since 2010

flow

  • Its always interesting to note who the participants are in the market. The advent of mutual funds, tax benefits and continually decreasing interest rates have led to local institutions becoming larger and larger holdings in equities versus pre 2010.
  • It does appear that the prop desks aren’t doing that well (if they sell less than they buy, doesn’t this imply a loss?)
  • Retail investors seem to be a wilder variant of the prop desks and;
  • Foreign institutions, well if this is a long term reversal in flows, we could be seeing the market maintain these levels of going higher in the future

Stocks in the news (aot, bkd, cpn, cwt, dtac, erw, gfpt, irpc, ktc, pap, ps, salee, sat, sccc, thai) 26.07.16

AOT
AOT expects 3QFY16 net profit to hit Bt4.9bn, up 21%, giving 9MFY16 net profit of Bt15bn, up 17%. This came from higher passenger pass-through of 90mn passenger in the first nine months (+12%). (Khao Hoon, 26/07/16)
Comment: Altogether now, 1, 2, 3, amazing thailanddddd.
BKD
BKD expects to get jobs worth Bt300bn in 2H16 which will increase its backlog to 1.8bn. It expects 2H16 net profit to be good because of seasonality. It expects to recognize Bt400mn revenue in 2H16. (Thun Hoon, 26/07/16)
CPN
CPN yesterday announced the launch of its first mixed-use property project in Nakhon Ratchasima at the cost of Bt10bn. (The Nation, 26/07/16)
CWT
CWT expects 2H16 earnings to be good driven by automotive and exports. It expects 2016 revenue to pick up from Bt1.38bn to Bt1.5bn aided by numerous orders. It plans to take part in upcoming PPA bidding. It expects to complete a power plant deal in the north by 4Q16. (Thun Hoon, 26/07/16)
DTAC
DTAC chief marketing officer Sitthichoke Nopchinabutr aims to make the company the No 1 digital brand in Thailand by 2020 through revitalising its brand image, providing digital services that meet the needs of all market segments, and enhancing relationships and partnerships with local and global partners. (The Nation, 26/07/16)
Comment: Well it isn’t happening in the numbers

Continue reading Stocks in the news (aot, bkd, cpn, cwt, dtac, erw, gfpt, irpc, ktc, pap, ps, salee, sat, sccc, thai) 26.07.16

Stocks in the news (acap, akr, bkd, chg, gold, ivl, lit, lph, oishi, ppp, siri, spa, tfg, tipco, uac) 25.07.16

ACAP
ACAP plans to expand to Cambodia and Myanmar via subsidiary “Capital OK” and expects to conclude the deals this year. It targets loans to reach Bt3bn after reported 1H16 loans of Bt2.1bn. It plans to issue a new debenture worth Bt600mn in 4Q16. It expects to list a subsidiary on the SET. (Thun Hoon, 25/07/16)
Comment: It isn’t unimagineable to see Thai financial co’s to gain strong market share in Laos and Cambodia, Myanmar however, could be a tougher nut to crack
 
AKR
AKR expects 2016 revenue growth of 25% supported by outstanding 2H16 earnings. It expects 2016 earnings to be expanded by government projects such as mass transit lines, SEZ and property that will support demand. (Thun Hoon, 25/07/16)
BKD
BKD expects 2H16 to be good. It plans to bid for 2-3 new jobs worth Bt3bn, of which it expects to get Bt1.5bn. It has backlog of more than Bt1.7bn and expects to book this in 3Q16. (Khao Hoon, 25/07/16)
CHG
CHG spent Bt600mn to invest in Ruamphat Chacherngsao Hospital. Construction will begin this September and it will open in 2018. (Khao Hoon, 25/07/16)
GOLD
GOLD expects to report good earnings in 2Q16 in mid-August. Its presales hit Bt8.5bn for the first half of the year with Bt3bn backlog. (Khao Hoon, 25/07/16)
Comment: The story for this company is rather well covered, residential property sales with some offices and a REIT.
 
IVL
IVL expects 2Q16 net profit to reach Bt2.5bn driven by higher sales and higher spread between PTA and PET. (Thun Hoon, 25/07/16)
Comment: And another revaluation of an acquisition ?
 
LIT
LIT expects 2H16 earnings to be good from seasonality in 3Q16. It expects revenue, net profit, and loan portfolio to grow not less than 30%. It expects 2016 performance to mark a record high. (Thun Hoon, 25/07/16)

Continue reading Stocks in the news (acap, akr, bkd, chg, gold, ivl, lit, lph, oishi, ppp, siri, spa, tfg, tipco, uac) 25.07.16