Stocks in the news (bts, ecf, grand, mlink, mpg, nyt, pylon, tcap, tpch, trc) 17.07.14
BTS
BTS reveals passenger traffic growth of 4-5% YoY in 1QFY15, below the estimate of 7% YoY, because the government has adjusted the Thai school semester to be in line with AEC. The company is waiting for bidding to open for the Green Line and expects the NCPO to support all train line projects. (Kao Hoon, 17/07/14)
Comment: BTS will continue to grow and grow and grow, line extensions are coming soon.
ECF
ECF reports 1H14 growth meets goals supported by the continual flow of orders. It expects performance in 2H14 to be better as it moves towards high season for the furniture business. It expects revenue growth of 15% this year. It expects to book Bt500mn of its backlog this year and expand its Elega showroom. It also plans to move ahead in negotiating with its new partner in Japan and expects orders to start flowing in September and revenue to be booked in 4Q14. (Kao Hoon, 17/07/14)
GRAND
GRAND is confident net profit growth in 2Q14 after it booked revenue of Bt2.3-2.5bn from the Hyde Sukhumvit project. It expects 1H14 net profit of Bt1bn and is considering paying an interim dividend for the first time. It plans to use Bt1bn to buy a hotel in Pattaya and set up two new projects. Its net profit growth is expected to grow sharply in 2015-16. (Thun Hoon, 17/07/14)
Comment: GRAND’s value is in the Hyde Sukhumvit and when that will be transferred across.
MLINK
MLINK expects a turnaround in 2Q14 after fixing its inventory system. It reaffirms that revenues and profits this year will grow by at least 20% YoY and expects to book revenue from M-Seed of at least Bt100mn starting July, which should help compensate for the lower set-top box target of 500,000 boxes. (Kao Hoon, 17/07/14)
Comment: Not the most trustworthy of stocks nor management.
MPG
Restructure via share swap ahead??? — News is circulating of a possible restructure via share swap after Visit Tantisunthorn, former Secretary General of the Government Pension Fund (GPF) bought 25mn shares in MPG. Word is that he plans to do a share swap for a solar power plant business worth Bt1bn for MPG shares. The share swap is expected to help restructure the company business. Another major shareholder, Taweechat Churangkul, has increased his stake to 7.8%. (Kao Hoon, 17/07/14)
Comment: More and more of these solar power plant projects will be listed in Thailand in the coming 12-18 months as the projects are coming online.
NYT
NYT’s plan to purchase CO Harbor for Bt800mn is not moving after its Japanese partner delayed investment due to the political problems. It expects no impact on 2014 performance. (Kao Hoon, 17/07/14)
Comment: Ouch, thats unlucky for NYT, I’m fairly certain they will be able to renew the investment idea in the future with another partner.
PYLON
Hoping to get Bt1.5bn contract — PYLON is waiting for results of a bid for foundation and warehouse construction work worth Bt1.5bn. It expects revenues this year to exceed Bt1.2bn. It also plans to bid for the Green Line in 3Q14 and Suvarnabhumi phase 2 in 4Q14. (Kao Hoon, 17/07/14)
Comment: The usual construction players are going to be benefiting from all this renewed expansion on government spending, but the Thai market is incredibly forward looking (it has already priced these projects in the construction sector for the next 3 years)
TCAP
TCAP maintains loan growth of 6-7% in 2014 though growth was only 1.5% in 1H15. It expects growth to recover in 2H14 on the basis of a recovery in investment confidence and the initiation of met projects. It expects NPLs to not exceed 4% in 2014. (Thun Hoon, 17/07/14)
TPCH
TPC Power Holding files listing application to SEC. It plans an IPO of 89.45mn shares, with the funds used to expand capacity at its power plant expansion and as working capital. Trinity, its financial advisor, expects to list it on the mai in 2014 and says it has strong fundamentals that are firming up every year. (Kao Hoon, 17/07/14)
TRC
TRC expects net profit to double in 2Q14 as it booked a project with a high 25% gross margin and operating costs were well controlled. It expects record high net profit in 2014. CEO Smai Leesakul says that it probably obtain a big project of Bt5bn, bringing backlog to Bt8bn. It will book Bt3bn from PTT’s project in July. (Thun Hoon, 17/07/14)
Bo Stenberg
Just for the hell of it, I checked a few P/E’s.
BTS is 55. Hard to argue with your logic. But 55….
TCAP is less than 8.
Whether the SET ‘universe’ is conducive to value investing–that is a question. Provided a given situation is not a falling knife, the value approach would appear to minimize the downside (one hopes).
On the other hand, I missed MAKRO at circa 200: too expensive, 555.
You pays your money, you takes your chances.
Pon
BTS – Promised a dividend that represents 6-7% yield for the next few years, plus they still have some thb 30 bn worth of cash from their infrastructure fund sale
TCAP – never cared much for the company.