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.

BKD says it has a Bt250mn 400-room hotel project from TCC group and plans to sign the contract in February. It also has more projects from government of ~Bt2.0bn. It expects revenue growth of 20% this year and now has backlog on hand of ~Bt2.0bn. (Than Hoon, 27/01/15)

CBG plans to increase overseas sales by 50% by 2018 and expects 2015 revenue to grow 20% supported by more new customers. (Than Hoon, 27/01/15)
Comment: Apparently Cambodia is their main export market, I do wonder if 1 brand is enough for them to maintain their growth and success.

ECL expects earnings turnaround this year. It plans to operate nano finance with a non-bank partner who has a client base of more than 1,000 in eastern Thailand. It expects to finalize the deal in February. (Than Hoon, 27/01/15)

KBS’ new 35MW power plant commenced operations on Jan 2 and will generate Bt150mn in revenue. Revenue will increase to Bt220mn in 2016 upon a full year of operations. The company’s long-term investment plan involves development of a Sugar Energy Complex, which will be completed by late 2016. (Krungthep Turakit, 27/01/15)
Comment: The usual natural expansion of a sugar company in Thailand.

LDC plans to open dental clinic in Yangon, Myanmar and expects revenues to hit Bt1.0bn in 2017. It plans to invest Bt100mn to add 10 clinics in Bangkok and provinces. (Than Hoon, 27/01/15)

Management says it plans to open 24 new projects in 2015 with total value of Bt30bn consisting of 21 single-detached house projects and three condominium projects. Land for all has already been secured. (Kao Hoon, 27/01/15)

PTG says falling oil prices has brought no stock losses. It expects net margin to increase to 40-50%, supported by increasing GRM. (Than Hoon, 27/01/15)
Comment: I think the news has things very wrong here, net margins are at 1%. But their marketing margin should improve as a result of the lower oil prices.

Yetagun emptying faster than anticipated — PTT, the national oil company, has informed the Mineral Fuels Department that natural gas from the Yetagun field in Myanmar is depleting faster than expected so the government might have to negotiate with the Myanmar government to increase sales of gas from the Zawtika field to offset the decline. PTT has contracted to take a minimum of 200 million cubic feet of natural gas daily from Yetagun for at least 10 years. (Krungthep Turakit, 27/01/15)

Year’s first project launch in Chiang Mai — SPALI plans to open its first project of this year – Supali Ville Chotana-Rumchok worth Bt260mn – on 14 rai in Chiang Mai. The project will be open for presales at the beginning of February. The company sees continued good demand for properties in Chiang Mai due to high purchasing power. (Kao Hoon, 306/01/15)

14 PPAs — SUPER’s management says it will be awarded 14 additional PPAs for solar farms with capacity of 100MW. The company is preparing the paperwork for the PPAs to be signed in early Feb. The company will also support the government’s policy to promote waste-fed power plant projects. (Kao Hoon, 27/01/15)
Comment: It’s just incredible the number of companies that have access to these PPAs and of course the owner told friends and family to buy the stock first before it was public…

Treasury stock approved — TCAP’s board of directors has approved a share repurchase in an amount of not more than Bt1.4bn and no more than 56,431,642 shares. The combination of this new program with the previous one in which 71,350,000 shares were purchased bought from 11 December 2012 to 10 June 2013 brings the total of treasure stock shares to 127,781,642 shares or not exceeding 10% of total paid-up shares. (Kao Hoon, 27/01/15)
Comment: Another company (SVI just announced theirs) that is engaging in a treasury stock repurchase)

Super Board approves plan — THAI’s management says the Super Board (State Enterprise Policy Committee) has approved its restructuring plan. The plan will take two years (2015-16) to complete. Management is confident that this restructuring will reduce losses and bring performance back up to good levels from 2017. The plan involves a layoff of ~5,000 people as a last option after other expenses are cut. (Krungthep Turakit, 27/01/15)

TTCL expects revenue growth of 15-20% this year supported by its energy business. The company plans to expand its business locally and abroad. (Than Hoon, 27/01/15)

WHA plans big lot sale of no more than 10% of its shares to foreign funds within this week with no discount from the market price. The share sale will not impact the management control. There was 50mn shares of big lot transaction yesterday at Bt31/share. (Krungthep Turakit, 27/01/15)
Comment: And with the stock price already increasing to 37, the foreign funds will already have benefited, I believe that the acquisition of HEMRAJ should be completed by 2Q15.

Stocks in the news (aot, bay, bjchi, cpf, genco, jas, mono, pylon, richy, scb, smit, thai, tpc, tpch) 28.01.15

Pushing for infrastructure fund — AOT is pushing hard to set up an infrastructure fund as its revenue stream is stable enough to set up the fund. They will try to copy the successful model of the Electricity Generation Authority of Thailand (EGAT) (Krungthep Turakit, 28/01/15)
Comment: This is the cheapest option for the government to raise funds for the expansion of AOT airports.

No “trading alert” — The SET says it does not meet the criteria for a “Trading Alert” sign, saying that the stock free float still meets the 15% requirement. BAY denies the news about de-listing. The SET plans to review the calculation of the SET index to reflect fundamentals and meet international standards. (ASTV, 28/01/15)
Comment: Everyone I’ve spoken to regrets not owning BAY, when the next large cap company has a small free float & has been recently acquired, don’t be surprised to see similar movements (same thing happened to SCBLIFE)

BJCHI set target for revenue growth at >15% after accumulating backlog in 2014 of more than Bt3.3bn. The company also expects to be awarded new projects worth >Bt8bn. Management confirms that lower oil price does not affect the new bidding. (Kao Hoon, 28/01/15)
Comment: While the decrease in oil prices have not affected recent project bids, I do wonder aloud if it will affect projects in the next 2-3 years that they will bid for.

CPF to set up 5 subsidiaries in China and Russia to produce feed meal and hold land for farming. This will be financed by CPF’s cash flow and CPP. (Thun Hoon, 28/01/15)

GENCO issued 1.15bn new shares as PP to 7 investors at Bt2/share. The new investors have no management control. The proceeds will be used to support the company’s development of real estate, waste-to-energy and renewable energy projects. The company is now studying energy projects in Japan. (Thun Hoon, 28/01/15)

JASIF for sale today — JASIF officially starts selling today. It is offering 5.5 bn units at a price of Bt10.50 apiece with an expected return of 8.6-9% for the first year. JASIF will be listed on Feb 16. JAS will realize gain of Bt27.8bn from selling its assets to JASIF in 1Q15. (Kao Hoon, 28/01/15)
Comment: And they have pulled it off much to my chagrin.

Aims at becoming #5 — As its programs gain in popularity, the company targets to become #5 in terms of audience share on the digital TV platform in 2015. It targets revenue of Bt3bn with revenue contribution from digital TV rising to 30%. (Kao Hoon, 28/01/15)
Comment: The issue I have with MONO is that they just spent a bucketload on buying movies and series to boost their December ratings, it’s not a sustainable business model, but meh do investors here really care?

PYLON expects to sign contracts for Green Line foundations worth >Bt700mn by March. Its profit for 2015 is expected to rise 15% YoY. It has budgeted Bt100mn for new machinery. Management plans to move the secondary market for its stock from mai to SET soon. (Krungthep Turakit, 28/01/15)

RICHY booked revenue of Bt400mn from its condominium The Rich Sathorn-Taksin. The company sourced loans from KTB of Bt856.86mn to develop the project. (Kao Hoon, 28/01/15)

SCB aims to be No. 1 in SME segment within 3 years. The bank targets a 5-7% loan growth in 2015 with 10-15% growth in SME loans. (Krungthep Turakit, 28/01/15)

SMIT targets revenue growth of 10-15% in 2015 after more orders from customers which will expand production. The company expects to be awarded permits to develop 2.4MW more solar rooftop project as well as a new permit to develop a solar farm. The company expects to conclude investment in a solar farm project in Japan within the next three months. (Kao Hoon, 28/01/15)

Restructuring plan unveiled — The Minister of Transport revealed the progress of the blueprint of restructuring plan for THAI, including staff lay-offs and non-core asset divestments. The plan will be submitted to the State Enterprise Committee within two months. The lay-offs could be lower than 5,000 positions as mentioned in the news previously. The manpower reduction could take 8-10 years to complete which would cut total staff to 20,000 positions, in line with the airplane fleet. (Daily News, 28/01/15)
Comment: I’m still expecting to see a recap, although I would be happy to be proven wrong.

TPC reports a 67% decline in 2014 earnings due to the slump in crude oil price, which adversely affected its product price (PVC). At the same time, the company also shut down its plant for annual maintenance, which reduced production as well. (Krungthep Turakit, 28/01/15)

Accepts new FiT structure — TPCH accepted the proposal from the Energy Regulatory Commission (ERC) for the new FiT format for biomass power plants. The company believes this new Fit structure will help boost the company earnings by 45%. It is thus preparing to submit proposals for five projects. (Kao Hoon, 28/01/15)

Stocks in the news (cpall, erw, kkp, maco, mint, nch, pcsgh, ptt, samart, scb, scc, tasco, tsr, tta, vgi) 29.01.15

CPALL targets 10% increase in sales this year. This will be driven by the addition of 650 branches this year to bring its total branches to 8,800, placing Thailand in second place for number of 7-Eleven stores behind Japan. It expects a 4-5% in sales at existing stores. (Kao Hoon, 29/01/15)
Comment: The machine that is 7-11 continues to grow, I remember management stating that they can continue expanding up to 15,000 stores without issues.

ERW budgets ~Bt2.0bn for hotel investment in Thailand and abroad. It is considering building a connecting walkway in the Ratchaprasong area with related parties for greater tourist convenience. For 2015, the company expects 35% revenue growth boosted by Thai tourism recovery. (Thun Hoon, 29/01/15)
Comment: An expansion abroad is interesting, though I still look at ERW as the purest hotel play in Thailand, and its the easiest NAV valuation one can do.

KKP sets 2015 loan growth target at 6% vs. -3.1% for 2014, expecting auto loans to continue contracting. The bank expects easing loss on repossessed cars and further ease in cost of funds. (Kao Hoon, 29/01/15)
Comment: KKP has continued to be hurt by its loan book from autoloans. They still have a long way to go before regaining it’s previous all time profit highs, looks like phatra was the winning in this merger at the KKP’s highest valuation.

The company expects recovery in ad budgets this year. As a result, the firm has set a revenue growth target of 15% in 2015 and expects gross margin to stay above 50%. (Thun Hoon, 29/01/15)

Buys more rooms in Europe — MINT announced that it has made a strategic acquisition of over 1,600 hotel rooms in Europe (Portugal) and South America (Brazil) with investment value at €168mn or Bt6.5bn. (Kao Hoon, 29/01/15)
Comment: You just have to be impressed with MINT’s management team, they aren’t willing to pay stupid prices for hotels in Thailand but are more than clever enough to look overseas.

Land bank of 900 rai — The company has a land bank of 900 rai. It plans to launch new projects worth Bt3bn and expects revenue to reach Bt2.2bn in 2015. (Thun Hoon, 29/01/15)

PCSGH expects better operations this year driven by improving automotive industry. So far, the company has repurchased 1.98mn of its own shares for Bt17.3mn. (Kao Hoon, 29/01/15)

PTT declines to reveal operations in 1Q15 following the stabilization in the oil price to stay at US$43/barrel. In addition, it has started an industrial park at Rayong, PTT Wanarom Eco Zone Industries” in 1Q15. (Kao Hoon, 29/01/15)

SAMART expects to sell 2mn digital set-top boxes in 2015, up from 700,000 actual sales in 2014. This is driven by another digital coupon distribution in 2015 by the National Broadcasting and Telecom Commission (NBTC). (Kao Hoon, 29/01/15)
Comment: A discussion with RS informed me that the digital set top boxes have added nothing in terms in viewership yet to the digital TV industry.

SCB looks for mortgage loans to grow 9% to Bt600bn this year. It expects 15% growth in the provincial market with SDH to grow 16% but condo flat. It will take two years to absorb the influx supply of condo. Quality of provincial mortgage loan is lower than Bangkok’s. Entrepreneurs are impacted by lower agriculture price and fewer tourists. (Krungthep Turakit, 29/01/15)

SCC expects cement demand to grow by 6% this year compared with a contraction of 1% in 2014 driven by strong demand for mega projects from the government. SCC also announced a final dividend of Bt7/share. (Kao Hoon, 29/01/15)

Anticipates asphalt demand to grow 30% in 2015 underpinned by rising demand in the local market as well as overseas. The government’s mega projects is the real help for demand growth. (Thun Hoon, 29/01/15)
Comment: Plus the added benefit of a decrease in oil prices with asphalt prices lagging by 2-3 months

TSR expects revenue growth of 25-30% to Bt1.5bn in 2015 underpinned by addition of 19 stores. (Kao Hoon, 29/01/15)

No word on BCP — Following the annual shareholder meeting, TTA remains silent as to whether or not it plans to buy BCP from PTT or not. (Krungthep Turakit, 29/01/15)

VGI raises ad rate for ads on LED screens and on elevators. The company also is teaming up with Work Point Entertainment (WORK) to air WORK’s programs on the company’s TV screens on the skytrain. (Kao Hoon, 29/01/15)

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