Partnership may decide if AIS joins 4G auction — The uncertain status of a partnership agreement between TOT Plc and Advanced Info Service (AIS) may put the latter under increasing pressure to join the renewed auction for the 900-megahertz spectrum. (Bangkok Post, 28/3/16)
ARROW expects 1Q16 earnings to be good on the back of recovering in construction and its active strategy. It expects 2Q16 earnings to be better than last year after its backlog reach a record high. (Thun Hoon, 28/03/16)
Comment: And they continue to grow and grow and grow
BEAUTY expects 2016 earnings to mark a record high. It targets revenue of Bt2.1bn (20% growth). It plans to expand its business by supplying its products via 7-eleven and opening new branches at home and abroad. It plans to hold a roadshow at Japan in mid-2016. (Khao Hoon, 28/03/16)
Comment: With growth slowing (but still great nonetheless) will investors decide this company isn’t worth its 30x PE anymore?
CWT expects 2016 revenue to achieve Bt2bn (20% growth) aided by Bt1.5bn backlog, revenue from teak exports of Bt400mn and automotive leather orders from abroad. It is budgeting Bt800mn to invest in power plants. (ASTV, 28/03/16)
Let’s start with Nok Airways, it appears that ever since its ludicrously expensive IPO no one has been a believer in Nok Airways, perhaps its the way that they put a silly cartoon image on the front of their planes . Or perhaps its the fact that this company entered into an industry that is not only incredibly competitive but well known for having one of the worst return on investments and that unless you have the balance sheet, management capability, and ability to source traffic and network. And that even with all you are still effectively screwed. Now there are several issues at play with the company all of which are fairly public, their financial performance is crap (loss since 2014, negative FCF, ), pilots are now leaving in droves b/c of safety standards and one would expect for bookings to decline tremendously. Will someone buy them? What’s the point? Perhaps if it was offered for 1 cent and a 95% haircut on the debt then you may see Tony Fernandes swoop in as he did with AirAsia but there is no real tangible value here and if I was AirAsia, Bangkok Airways, (not Thai Airways b/c they own 40% of the company, here comes another write off!) I would be toasting the loss of a competitor.
Thai Airways & AirAsia
Thai Airways stock price has been on a huge run in the past week thanks to some clever reporting that Somkid raised the idea that Thai Airways should work with AirAsia through a share purchase (Bangkok Post). AS IF THIS WAS EVER POSSIBLE! But the market believed it, until the news came out that this was not not on the cards (Bangkok Post) and I had multiple messages about why weren’t we purchasing Thai Airways…I will whenever they recap until then I’d rather believe that pigs can fly.
It’s been in the news since December ’15 that Bank of Nova Scotia has been planning to sell their 49% stake in TCAP.
Latest events suggest that there are two buyers lined up, basically Japan and China (Bangkok Post). Traditionally we normally heard rumours that Malaysian Banks were interested in expanding here and they were typically the parties willing to pay high multiples of BV. But with TCAP’s relatively smaller customer base, loan book etc etc and to compound this the fact that the world isn’t doing well either, it isn’t quite the attractive proposition as other entities in the past. In any case if you believe in the foolishness of buyers don’t be surprised to see a deal happen @ 2x P/BV.
Well the draft charter has been in the news, Yingluck has invited reporters to visit her garden and Thaksin has allowed himself to be interviewed in Singapore. (I do wonder how long it will be before BEC makes a drama similar to this) And in the past week’s Economist there was a piece on Thailand (Economist) I’ll let you read the article in its entirety but it did end the following “…that Thailand’s self-chosen leaders have no real strategy at all. “ Which is rubbish they do, protect the status quo, protect their positions, ensure no one can have full control of parliament and other things which I can’t mention unless I want to be invited for attitude adjustment.
One of the easiest ways in this country to make one’s stock price go up is to decrease its par value/a stock split/par split. Why? Basic finance principles imply that this should have no impact upon the valuation of a business, in reality animal spirits are different….So the SET has come out with a new criteria stating that there would be a floor limit for par value set at 50 satang (Bangkok Post). So one should applaud them for the best efforts to limit the number of unscrupulous companies and owners that are just looking for the ability to manipulate their share prices. Of course there is an easy way around this…do a reverse par, wait a few years and then split it again and again….
AMATA sets target land sales of 1,000 rai in 2016. It is negotiating with a foreign customer and hopes to finish the deal in 2H16. (Khao Hoon, 24/02/16)
Comment: This implies a 20% revenue growth for AMATA this year.
ARROW is confident that revenue in 2016 will reach Bt1.4bn supported by more order, an increase in market share to 65% and expansion of factory and machinery. (Khao Hoon, 24/02/16)
Comment: What property slowdown? As long as the number of buildings continue to increase then ARROW is in good shape. A consistent grower over the past few years.
BIG reported net profit of Bt459mn, growth of 235%, on a gain in market share to over 50% and total revenue of Bt1.62bn. It targets revenue growth of no less than 10%, supported by expanding to high-end customers. It will pay a dividend of Bt0.6/share, XD on April 29. (Khao Hoon, 24/02/16)
Comment: I’ll be reading their notes to the financial statements w/ a lot of questions…
CHO reported profit in 2015 of Bt35mn, less than last year. This was due to a fall in total revenue and impact from the cancellation of the NGV bus. The board approved a stock dividend in the ratio 10 old shares for 1 new share, XD on April 27. It targets revenue growth of 5-10% in 2016. (Khao Hoon, 24/02/16)
Comment: Stock divvy’s are never liked by this market…
AOT says there is no impact from the Chinese yuan depreciation. Growth in Chinese tourist was 10-14% for eight months. (Post Today, 13/08/15)
Comment: For once, I concur with this government enterprise.
ARROW reported 2Q15 earnings of Bt56mn (+92%YoY). It plans to pay an interim dividend of Bt0.15/share, XD on Aug 21. It targets 2015 revenue growth of 20%. (Khao Hoon, 13/08/15)
Comment: And somehow this little company continues to rack up decent earnings growth inspite of the overall economic situation.
BBL sees Chinese corporations becoming some of its major Vietnam customers after seeing greater direct investment activities by them. It targets 2015 Vietnam loan growth of 14% after it achieving 7-8% in 1H15. (Thun Hoon, 13/08/15)
Comment: Perhaps more of a regional play at the moment, without a doubt the Chinese are the largest investors in Vietnam
BIG reported 2Q15 earnings of Bt70.8mn. It expects revenue and net profit to grow steadily. It plans to launch a marketing campaign to boost sales. It is confident 2015 revenue will achieve its target growth of 10%. (Khao Hoon, 13/08/15)
Comment: Well its a camera retail co, just depends upon how large you believe the market is for them
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