Category Archives: ThaiCapitalist

ThaiCapitalist – general posts.

Stocks in the news (arrow, biz, bsm, cpn, csl, global, jubile, mega, robins, s, sci, spali, sutha, syntec, tacc, tfg, twz) 06.09.16

ARROW
ARROW expects 2016 revenue and profit to be a new high. It is maintains its full-year target revenue at Bt1.4bn, growth of 15%. It has backlog of Bt240mn, all of which will be booked this year. It is talking with two companies to take a share of its subsidiary and expects to make a deal within 2017. (Kao Hoon, 06/09/16)
BIZ
BIZ maintains 2016 revenue target growth of 50-60% and plans to expand its customer base in both government and private hospitals. It expects 2019 revenue to reach Bt1bn and has a three-year plan to do a JV with a private hospital to set up a cancer center. (Kao Hoon, 06/09/16)
Comment: Well its certainly pricing this growth in at these valuation levels
 
BSM
BSM expects to sign a Bt100mn contract for work in Papua New Guinea in early 4Q16. This will support 2H16 earnings. It expects a profit in both 3Q16 and the whole of 2016. It expects the Sansara project to finish around the end of 2017 to early 2018. It targets 2017 revenue of Bt800mn from Bt700mn this year, supported by expanding to Myanmar and Cambodia. ( Thun Hoon, 06/09/16)
CPN
CPN expects 2H16 revenue growth of 12-14% backed by steady growth in same-store sales. It is confident that 2016 revenue will grow 15% supported by opening a new shopping center. It expects to change CPNRF into a REIT at the end of 2016. (Kao Hoon, 06/09/16)
Comment: Given the size of the business today, its rather astounding how well they continue to perform
 
CSL
CSL expects 2016 revenue growth of 2-3%. It plans to expand high-speed internet in condominiums along the BTS line and expects 10,000 customers within this year. (Kao Hoon, 06/09/16)
GLOBAL
GLOBAL expects growth to continue through 2H16 with full-year revenue growth of more than 10%. It expects a net margin of 8.45%. It plans to expand to Myanmar and Cambodia, with a decision to be made next year. It expects to open eight new branches in 2016 and has a five-year budget of Bt10bn. ( Thun Ho on, 06/09/16)
JUBILE
JUBILE expects profit margin to continue to be good. It believes the Forevermark brand has a bright future. It plans to add four branches this year and has a five-year target of 25 branches. ( Thun Hoon, 06/09/16)
Comment: If JUBILE turnarounds around then you know that consumer confidence is back

Continue reading Stocks in the news (arrow, biz, bsm, cpn, csl, global, jubile, mega, robins, s, sci, spali, sutha, syntec, tacc, tfg, twz) 06.09.16

Random Thoughts: Analysts being kicked out, Howard Marks Memo, Vietnam

Silly CFOs

If you wonder why you don’t read too many negative analyst reports in the market this is typically a reason why

Chris Lee can be seen standing over a seated Timothy Lam and ordering him to leave the conference room on Wednesday. Lam initiated coverage on PAX Global’s stock in April with an underweight rating, making him the only analyst out of 17 tracked by Bloomberg to have a bearish recommendation at the time.

Asell-side analyst’s relationship with the management is so important, they can receive further insight into the business, easily arrange meetings for their clients and some of the time you’ll even see those sell-side analysts join the firm’s that they wrote reports on. It’s not the individual’s fault its just the way the business is. I’ve heard from a friend that he also received negative treatment from the CFO of an airline company here for writing a negative report on them, you can probably guess which one that is….
Source: Bloomberg
Howard Marks: Political realities.
There’s a lot in Howard Marks latest memo and I can’t do it justice with a summary, so here’s his last paragraph and a link to the whole article

I wrote this memo to explain what happened in the UK this year and what I think is happening in the U.S.  I wanted to point out that politics rarely hews to economic reality; rather, it has a reality all its own.  

The recent trends in income, wealth, trade and employment are causing a lot of dissatisfaction in the U.S. and Europe, and I expect them to have a strong impact on politics for years to come.  Widespread economic dislocation can cause voters to choose the wrong leaders.   The U.S. is not exempt, and we must be highly vigilant in this regard. 
I’m off to Vietnam for the next few days so there won’t be any posts til Thursday

WHTW: Top 10

  • Thai referendum: Military-written constitution approved — A clear majority of Thai referendum voters have backed a draft constitution written by an army-appointed committee. Unofficial tallies show that 61.45% voted in favour. The military threw out the old constitution when it took power in 2014, after months of political instability and sporadic violence. Supporters of the new document say it will restore stability, but critics say it will entrench military control. (BBC, 7/8/16)
  • Megaprojects to get boost from Yes vote — The government’s 20 planned megaprojects with a combined valued of 1.41 trillion baht are set to move forward smoothly after the Yes vote for the new constitution . (CNBC, 8/8/16) Egat eyes B345bn investment — The Electricity Generating Authority of Thailand (Egat) is mulling a plan to launch another infrastructure fund in order to raise cash to develop highvoltage transmission lines, eyeing a 345.05-billion-baht investment budget. (Bangkok Post, 9/8/16)
  • US created 255,000 jobs in July vs. 180,000 jobs expected — Job creation crushed estimates in July as the economy added 255,000 positions, according to the Labor Department. The headline unemployment rate held steady at 4.9 percent, though a more encompassing measure that includes those not actively looking for work and those working part-time for economic reasons moved up a notch to 9.7 percent. Though still mired near generational lows, the labor force participation rate ticked up one-tenth to 62.8 percent as those counted as not in the labor force decreased 184,000 to 94.3 million. (CNBC, 8/8/16)
  • China Exports Remain Subdued as Import Drop Fuels Demand Concern — China’s exports remained sluggish last month, signaling tepid global demand, while deteriorating imports raise concern domestic conditions may be weakening anew. Overseas shipments fell 4.4 percent in U.S. dollars, rose 2.9 percent in yuan terms in July from a year earlier.  Imports dropped 12.5 percent in dollar terms, slipped 5.7 percent in local currency. Trade surplus widened to $52.3 billion. (Bloomberg, 8/8/16)

Continue reading WHTW: Top 10

Market Update 07/03 – 11/03

And the roaring start to the year continues for the SET, up 8.2%, driven by resources, tech (read telcos) and financials. Earnings last year were so-so @ best given the multiple write-offs by the resources sector, insurance seems to be suffering this year along with the MAI index still down -3.7%. Now we wonder aloud…with prop traders having accumulated a total of THB 15 bn, when they sell who will be picking up their shares? 00sum 01charts

Stocks in the news (advanc, aot, beauty, bem, earth, egco, ifec, jas, m, sawad, scb, susco) 17.02.16

ADVANC
ADVANC to work with TRUE to help 2G customers. TRUE will propose a rental agreement with ADVANC to rent 900MHz for three months. They will be talking today. (Khao Hoon, 17/2/16)
Comment: I don’t quite see the point in ADVANC working with TRUE given that 1) Jas won’t pay and thus there’s still another license available & negotiate with NBTC and TOT to utilise the unused spectrum 2) It has the roaming agreement with DTAC

AOT
AOT expects passengers to increase by 16-18%, signaling 2Q16 growth of 20%. It plans to inject Bt140bn to expand and develop airports. (Thun Hoon, 17/2/16)

BEAUTY
BEAUTY is seeking a partner in Philippines. This will be clear by 4Q16. It targets 2016 revenue to reach Bt2.1bn, driven by higher demand. It also plans to expand branches abroad. (Thun Hoon, 17/2/16)
Comment: I’ve always liked the potential of the Philippines, and given that Beauty’s products are “cheap” i.e. 20 cents of 10-20 baht / unit it could do very well. Or is this just news from another company that they are expanding internationally and nothing will come out of it.

BEM
BEM awarded compensation of Bt4.38bn. The arbitrator has told the Expressway Authority of Thailand to pay BEM. (Khao Hoon, 17/2/16)
Comment: Less funding for the government to do upcountry loans?

Continue reading Stocks in the news (advanc, aot, beauty, bem, earth, egco, ifec, jas, m, sawad, scb, susco) 17.02.16

Evil Chinese!

The evil chinese are devaluing their currency to ruin the world! Right…that’s the headline I’ve been reading the past few days, and this is the only chart that I care about at the moment.cotd-usd-cny

And these quotes from El Erian

China is now following a path that many other advanced and emerging economies have been attempting to take for some time (including the euro zone via the European Central Bank’s quantitative easing program). Indeed, China’s decision leaves the U.S.  as the only systemically important country willing to accept the strengthening of its currency. But what may work for individual countries cannot work for the system as a whole; and that has implications for financial markets.

China’s currency move will be viewed as an important step in the country’s multiyear journey toward a more efficient and responsive market-determined system

Granted the conspiracy theorist inside me asks these questions:

  • Isn’t it convenient that this occurs the month before the head of China goes to the US and the month where the Fed is supposedly going to finally raise interest rates?
  • Why all the rhetoric against China? The USD during ’08-’13 was weakening massively and yet nothing in the media was said
  • Japan has devalued its own currency vs the RMB and the USD by some 30% in the past 12 months, perhaps that’s where it all started?
  • Isn’t this all just a race to the beginning? Every country tries to devalue their currency, exports deflation and in the end currencies return to where they started?

Source: Business Insider, Bloomberg

Management Trades 29/06 – 03/07

Notable Transactions

Buy(s) THB 71.6 mn

  • BA – And the owner still continues to buy back his shares in the market

Sell(s) THB 404 mn

  • ITD – And the exact opposite of BA, here K. Premchai continues to sell his shares!
  • ACD – The President and major shareholder sells over 10% the co, to who and why?
  • GRAND – Is the family thinking that this deal with PF isn’t wonderful?
  • ROCK – A director sells off some shares, must’ve been an off the market transaction

150706 mgmt_trades

Children fighting @ NMG’s AGM

The funniest scene emerged at NMG’s AGM yesterday where police were called in to prevent a portion of shareholders, specifically the SLC group, or News Network as they now call themselves, from entering the AGM.

This sparked chaos in front of the meeting room as the angry shareholders tried to break into the room. This led to the arrival of 50 police officers from nearby police stations who came to control the intense situation and prevent a confrontation.

nmgSource: Bangkok Post

Now I have a few issues with how this all went down:

1. Shareholders, no matter what their agenda, should always be allowed into an AGM, NMG was definitely wrong in this case.

2. Board members are elected by shareholders, NMG has to respect this law

3. If they were so worried about News Network electing a member to the board, so what? In theory they only own 12% of the shares, 75% of attending shareholders need to pass it by Thai law, and even if 1 additional member is added to the board, again so what?

4. The obvious hypocrisy from NMG is that, it is a publicly listed company, it has raised funds from the public multiple times, and now that the some shareholders perhaps want some change, NMG is barring them from having a voice, sooooo, yeah a bit unfair.

It’s quite humourous and yet sad to see that minority shareholders viewpoints are respected.

Disclosure: I’m not a shareholder in either co.