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 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 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 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?
- Why do people love property more over stocks? Is it because its tangible? Perhaps it helps that your condo or house doesn’t have its value shown on a screen with second. So why not look at stocks in the same way as property? i.e. Find a good location/business, understand the key drivers for that location/business, buy at an undervalued price relative to these elements, close your eyes and open them again in 5-10 years? Ah because as humans we inherently want to know what the value of something is immediately, plus the leverage we can get in Thailand is incredible, 10% down, first 3 years are close to 0% interest payment, and they say the stock market is a gamble…
- It’s the economy stupid – has Thailand reached its peak in terms of economy growth potential? Some say yes others say no, high household debt, an aging population work against the long term story, but the potential of the growing economies in Vietnam, Laos, Cambodia, and Myanmar are still a positive for Thai co’s to expand.
- NPL’s – Is there something negative simmering on the balance sheets of the banks? If only KBANK has stated that NPL’s may hit ~2.8% of them by the end of this year, can we really believe that KTB’s NPL’s are only 2%? Or SCB’s for that matter? Or perhaps they have been clever in provisioning for these potential risks.
- Speaking of NPL’s – SSI & TISCO – SSI engaged in one rather adventurous M&A deal years ago, but still can’t make $ and has had a negative EBITDA ever since, Tisco has given them a loan for this, close to 25% of it’s own equity value, when will the proverbial shit hit the fan? Or is the BoT going to allow them to categorise the loans to SSI as however they please when infact it should be an NPL?
- Telco’s – 4G has been announced to occur by the 11th November, rumours have it that the government is pushing for a 4th telco operator to join, now who could do this? loxely, jas, samart, are names mentioned, but why would anyone want to?
- Digital Economy – The next solar craze? Government seems adament to be pushing these projects through, who will the winners be who will the losers be? Still many questions but something to look at in the near future
- Tonnes of Chinese Visitors – who really benefits? Tour operators, bus owners? But which listed co other than AOT and AAV?
- Bangkok is sinking – nothing new, we’ve known that for years, shouldn’t the government shift all civil servants to Saraburi? Or further up North/South? Maybe the Bangkok governor was correct in saying that we should all move to the mountains, have khao yai property prices reflected this yet? Or will Chiang Mai become the burgeoning growth center for the country over the coming decades?
- Investor Relations quality in Thailand – How does the quality of IR in Thailand compare to that of the rest of the region? Quite highly actually, even compared to the rest of the world, the quality of the presentations you find in Thailand are top notch, the only thing generally lacking is that the majority of Thai Co’s still don’t see the value in Investor Relation’s personnel. Regionally I think the Philippines is the leader for IR.
- The Government – Likely that they’ll stick to their timeline of 3Q16 as they’ve come to the realisation that running a country is their best forte, thus does this mean we’ll see all the infrastructure budgets approved by then? Other than the silly submarine, there is a lot of $ a stake here, I wouldn’t be surprised to see it all go through for reasons that I shouldn’t write.
Siam Commercial Bank emerged as the top banker to CP Group, controlled by Thai tycoon Dhanin Chearavanont, pocketing $40 million. Dhanin has stepped up its deal-making since 2013 as the tycoon has made a string of overseas acquisitions to diversify away from Thailand. Siam Commercial Bank has lent to the group and successful in parlaying its lending relationship to play a role on the advisory side, having advised CP All on its acquisition of retailer Siam Makro alongside UBS.
AOT expects revenue growth in 2015 to exceed 15% after stronger-than-expected traffic. The cancellation of charter flights to and from Japan and South Korea has not adversely affected it. The firm plans to go ahead with Phase II of Suvarnabhumi airport. (Khao Hoon, 09/04/15)
Comment: Regardless of these cancellations, in the end AOT will still achieve higher traffic as a result of the continued increase in Lowcost airlines and the expansion of both Don Muang and Suvarnabhumi
APURE studying investment in renewable energy projects. It expects 10% revenue growth in 2015 driven by strong orders from Japanese customers. The firm expects to wipe out retained loss this year and be ready to pay a dividend for the first time in many years. (Khao Hoon, 09/04/15)
Comment: Never really trusted the shareholders and management of this company, they’ve been manipulating their own stock since 2005
CGH spends Bt571mn to acquire 15% in PDI. This share acquisition will further its goal to greater diversification. (Khao Hoon, 09/04/15)
AMATA to join with Labor Department to develop Thailand’s labor market. (Khao Hoon, 03/04/15)
BECL’s shareholders okay merger with BMCL. In July, the two companies will hold a joint shareholders meeting. The merged firm is expected to trade in the stock market in August. (Khao Hoon, 03/04/15)
Comment: What will be interesting is how they will deal with the dissenting shareholders, CK will have to put more cash than they originally expected if the minority shareholders become difficult.
CPF to invest up to US$50-100mn (Bt3.2-3.3bn) to expand production in Vietnam. The firm also expects to open more stores there. It expects 2015 revenue from this market of Bt77bn, reaching Bt1trn within the next two or three years. (Khao Hoon, 03/04/15)
Well ok not all Thai Banks are risk takers, but this one line caught my eye in this morning’s paper.
Pace entered into an agreement for the purchase of one of the world’s most iconic gourmet food brands, Dean & DeLuca, as well as its global business and assets last November for US$140 million from Dean & DeLuca Holdings Inc in Wichita, Kansas.
Of the acquisition budget, $125 million was financed by Siam Commercial Bank, with the rest of the funding coming from Pace’s own equity.
Pace expects to earn revenue from Dean & DeLuca this year from sales at 11 US outlets and fees from new licensing agreements. This will account for 15% of net profit this year and rise to 50% of net profit in 2018.
Source: Bangkok Post
So this is PACE, that still has rubbish earnings (profits aren’t coming in any time soon), a relatively weak balance sheet (equity of THB 2 bn, total liabilities of THB 11bn as of 3Q14), but are still able to raise that much debt financing from SCB for this transaction.
Note: Scroll down to see commentary for the past 3 days.
Stocks in the news (amata, arrow, bay, bkd, cbg, ecl, kbs, ldc, pf, ptg, ptt, spali, super, tcap, thai, ttcl, wha) 27.01.15
AMATA plans to invest in industrial estate in Myanmar, in addition to its existing investment in Vietnam to prepare for the inception of AEC. The company will also increase investment in an information technology system to add more value to its IE. The investment plan should be ready soon. (Krungthep Turakit, 27/01/15)
Comment: It’s a natural development for AMATA to have look at Myanmar however I can also say that I’m planning to expand to investments in Myanmar and raise $ even though its still years away.
ARROW expects revenue growth of 20% and margin of 23-25% this year. The company plans to use capex of ~Bt30mn to build a new plant to serve more pipe conduit orders. (Post Today, 27/01/15)
No ‘trading alert’ — Despite a sharp 118% rally in the stock price since the beginning of this year, the SET says it does not meet the criteria for a “Trading Alert” sign, because the volatile share price movement was due to low liquidity. BAY denies the news about de-listing. (Krungthep Turakit, 27/01/15)
Comment: Everyone regrets not having these shares, I do wonder if local institutions (i.e. mutual funds) have benefited given that it traditionally isn’t among the top holdings.
Banks are always the first to announce their financial performances and here are some quick thoughts:
- Just look @ BAY’s performance, followed by its corresponding stock price performance, it has just been amazing.
- The larger banks in general are still continuing to grow, NPL management has been proactive, especially at KBANK.
- The smaller institutions i.e. KKP the results are well, shit, why? Autos.
- TMB’s performance came out fantastic because of one-time gains that won’t be replicated in 2015.
- All in all a decent performance for the sector despite everything that has happened in the past 18 months. I still think finco’s are going to be a winner this year and next as a result of the infrastructure projects.
- BBL – Stable, unexciting, the same as it has been and will always be.
Source: Bangkok Post
- The major banks are still performing ok, mainly on cost management and lower provisions
- 9M YoY performance is average to say the least with the sector only up +5.7%
- Autoloan related fincos, Tisco and KK, are still suffering, though this may very well be the end of the high provisions.
- KBANK, TMB, and LHBANK have been performing fantastically well each for different reasons.
Source: Bangkok Post