IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

PTT Oil & Retail Business  / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/ptt-oil-and-retail" target="_blank" data-smartkarma-citation="entities:28939:1" rel="noopener">PTT Oil and Retail (PTTOR TB)</a> is the flagship company for the oil and retail business of <a href="https://www.smartkarma.com/entities/ptt-pcl" target="_blank" data-smartkarma-citation="entities:197:1" rel="noopener">PTT PCL (PTT TB)</a> in Thailand and in the Southeast Asia region such as Cambodia, Laos, Myanmar and Philippines. PTTOR is the largest player in Thailand’s fuel retail market. Among the non-independent retail markets segment, PTTOR had a leading market share of 31.8% as measured by the number of retail stations in 2019, according to Wood Mackenzie. PTTOR also owns the Café Amazon brand which is globally amongst the top 15 specialist coffee and tea shop brands in terms of revenue and top six as measured by the outlet number as of 2019, according to Euromonitor.<div class="content-highlight">PTTOR has kicked off pre-marketing for a Thai IPO to raise around $2 billion, according to press reports. The timing of the long-delayed IPO is not ideal as the weak consumer confidence, COVID-19 lockdowns and low oil prices have wrecked PTTOR’s topline in 9M20. Creditability, PTTOR has navigated poor market conditions by improving margin and remaining cash generative in 9M20. Also, data points from the 3Q20 results point to the green shoots of recovery. Overall, we think that PTTOR remains a market-leading business and well-placed to ride the recovery in oil prices, easing of lockdown restrictions and consumer confidence. </div>

PTT Oil and Retail (PTTOR TB) is the flagship company for the oil and retail business of PTT PCL (PTT TB) in Thailand and in the Southeast Asia region such as Cambodia, Laos, Myanmar and Philippines. PTTOR is the largest player in Thailand’s fuel retail market. Among the non-independent retail markets segment, PTTOR had a leading market share of 31.8% as measured by the number of retail stations in 2019, according to Wood Mackenzie. PTTOR also owns the Café Amazon brand which is globally amongst the top 15 specialist coffee and tea shop brands in terms of revenue and top six as measured by the outlet number as of 2019, according to Euromonitor.PTTOR has kicked off pre-marketing for a Thai IPO to raise around $2 billion, according to press reports. The timing of the long-delayed IPO is not ideal as the weak consumer confidence, COVID-19 lockdowns and low oil prices have wrecked PTTOR’s topline in 9M20. Creditability, PTTOR has navigated poor market conditions by improving margin and remaining cash generative in 9M20. Also, data points from the 3Q20 results point to the green shoots of recovery. Overall, we think that PTTOR remains a market-leading business and well-placed to ride the recovery in oil prices, easing of lockdown restrictions and consumer confidence. 

PTT Oil and Retail (PTTOR) IPO Initiation: Octane Ratings

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/sheng-siong-group-ltd" target="_blank" data-smartkarma-citation="entities:6824:1" rel="noopener">Sheng Siong (SSG SP)</a> has been the stocks to benefit from the COVID-19 induced lockdown as Singaporeans are allowed to WFH instead of WFO thus they do more grocery shopping and also stockpiled in case of the reduced food supply due to the longer than expected pandemic. The company has recorded a substantial and never-seen-before YoY revenue growth (Q1: 30.7%, Q2: 75.8%, and Q3: 28.9%). 
The tides seemed to have turned though:
<ul>
<li>Singapore statistics bureau reported that the revenue increase from supermarkets and convenience stores has slowed down while F&amp;B sales have grown from SGD 397 million to SGD 629 million QoQ, reflecting the change in consumers' behavior to start going out again. </li>
</ul>
Although its valuation has peaked in Q2, Sheng Siong's share price has not decreased by much thus it is the right time book profit as the large revenues growth is unlikely to sustain going forward. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/171/873/original/image_38476675561605505587235.png?1605505587" class="editor-image img-responsive" data-smartkarma-image-id="171873"></figure>

Sheng Siong (SSG SP) has been the stocks to benefit from the COVID-19 induced lockdown as Singaporeans are allowed to WFH instead of WFO thus they do more grocery shopping and also stockpiled in case of the reduced food supply due to the longer than expected pandemic. The company has recorded a substantial and never-seen-before YoY revenue growth (Q1: 30.7%, Q2: 75.8%, and Q3: 28.9%). 
The tides seemed to have turned though:

Singapore statistics bureau reported that the revenue increase from supermarkets and convenience stores has slowed down while F&amp;B sales have grown from SGD 397 million to SGD 629 million QoQ, reflecting the change in consumers' behavior to start going out again. 

Although its valuation has peaked in Q2, Sheng Siong's share price has not decreased by much thus it is the right time book profit as the large revenues growth is unlikely to sustain going forward. 


Sheng Siong (SSG): Sustainable High Growth?

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

Cross Asset Strategy

We are highlighting some key dates to watch in late 2020 and the year 2021 and the stocks that will be impacted by them:Consumer catalysts. The iPhone 12 release on Nov 20 is expected to be a boon for the telecom sector, but the government's Half-&amp;-Half program could drive consumers away from CP All to small businesses.Political pit stop. Thai politics hinges on the constitutional reform meeting on November 28 and the Prime Minister's trial on December 2. It's defensives like RATCH vs stocks that rely on long term stability like Bangkok Bank that matter at this juncture.Test for tourism. We expect to see YoY improvement for domestic tourism in April (Songkran) that could benefit domestic-focused hotels like Erawan. Likewise, Christmas (December) is likely to be the test for foreign tourism, assuming the vaccine comes in October as expected.

We are highlighting some key dates to watch in late 2020 and the year 2021 and the stocks that will be impacted by them:Consumer catalysts. The iPhone 12 release on Nov 20 is expected to be a boon for the telecom sector, but the government's Half-&amp;-Half program could drive consumers away from CP All to small businesses.Political pit stop. Thai politics hinges on the constitutional reform meeting on November 28 and the Prime Minister's trial on December 2. It's defensives like RATCH vs stocks that rely on long term stability like Bangkok Bank that matter at this juncture.Test for tourism. We expect to see YoY improvement for domestic tourism in April (Songkran) that could benefit domestic-focused hotels like Erawan. Likewise, Christmas (December) is likely to be the test for foreign tourism, assuming the vaccine comes in October as expected.

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

BJC’s 3Q20 net profit was at Bt1.1bn (-40%YoY, +247%QoQ). The 9M20 result accounted for 60% of 2020E earnings forecast.<ul>
<li>The fall in 3Q20 earnings was pressured by a drop in revenue to Bt35bn (-9%YoY,-3%QoQ). SSSG reported at -17.8% from -17% in 2Q20.</li>
<li>We maintain our positive outlook in 2021 earnings driven by (1) improvement of SSSG by 3%YoY in 2021E (2) recovery in rental income after easing lockdown as we expect occupancy rate to pick up to 95% in 2021 from a bottom at 85% in 2Q20 (3) cost saving from tax-deductible item in the next three year.</li>
<li>We still like this stock given (1) its strong integrated solid supply chain which allow the company to benefit from industry growth and recovery; (2) double digits growth for small format stores in the next two years (ie., Mini BigC and BigC Market which currently contribute 15% of total sales).</li>
</ul>We maintain BUY rating with a new target price of Bt43 (Previous TP of Bt55) based on 30xPE’21E, closed to Consumer Discretionary Sector. Target price cut was due to earnings downward revision by 22% in 2021E.

BJC’s 3Q20 net profit was at Bt1.1bn (-40%YoY, +247%QoQ). The 9M20 result accounted for 60% of 2020E earnings forecast.
The fall in 3Q20 earnings was pressured by a drop in revenue to Bt35bn (-9%YoY,-3%QoQ). SSSG reported at -17.8% from -17% in 2Q20.
We maintain our positive outlook in 2021 earnings driven by (1) improvement of SSSG by 3%YoY in 2021E (2) recovery in rental income after easing lockdown as we expect occupancy rate to pick up to 95% in 2021 from a bottom at 85% in 2Q20 (3) cost saving from tax-deductible item in the next three year.
We still like this stock given (1) its strong integrated solid supply chain which allow the company to benefit from industry growth and recovery; (2) double digits growth for small format stores in the next two years (ie., Mini BigC and BigC Market which currently contribute 15% of total sales).
We maintain BUY rating with a new target price of Bt43 (Previous TP of Bt55) based on 30xPE’21E, closed to Consumer Discretionary Sector. Target price cut was due to earnings downward revision by 22% in 2021E.

<a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> is uniquely positioned as a Thai company listed in <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">SGX (SGX SP)</a> with an exposure to the reopening of tourism in Thailand. The Thai government has proposed to exempt Chinese tourists from the required 14-day quarantine by 2021 and replace that with an app or token to trace their whereabouts during their holiday in Thailand. With the positive vaccine announcement, this initiative will be rolled out sooner rather than later and possibly be expanded for other countries too which means the number of tourists in Thailand will soon resume to the almost pre-COVID-19 level. 
At 16x PER, 2.8x PBR, and 13.4 EV/EBITDA, Thai Beverage is trading at a  63% PER discount, 76% PBR discount, and 36% EV/EBITDA discount to the regional brewery peers and a 65% PER discount, 53% PBR discount, and 50% EV/EBITDA discount to the other Thai tourism-related stocks.

Thai Beverage (THBEV SP) is uniquely positioned as a Thai company listed in SGX (SGX SP) with an exposure to the reopening of tourism in Thailand. The Thai government has proposed to exempt Chinese tourists from the required 14-day quarantine by 2021 and replace that with an app or token to trace their whereabouts during their holiday in Thailand. With the positive vaccine announcement, this initiative will be rolled out sooner rather than later and possibly be expanded for other countries too which means the number of tourists in Thailand will soon resume to the almost pre-COVID-19 level. 
At 16x PER, 2.8x PBR, and 13.4 EV/EBITDA, Thai Beverage is trading at a  63% PER discount, 76% PBR discount, and 36% EV/EBITDA discount to the regional brewery peers and a 65% PER discount, 53% PBR discount, and 50% EV/EBITDA discount to the other Thai tourism-related stocks. 

Thai Beverage (Thbev): Brewing for Reopening

Thailand

CP ALL PCL operates convenience store chains in Thailand and China.  The Company also owns and operates the a department store chain located primarily in Shanghai city and Chonqing city of China.

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CP ALL PCL (CPALL TB)

PTT Oil and Retail (PTTOR) IPO Initiation: Octane Ratings

PTTOR has kicked off pre-marketing for a IPO to raise around $2 billion, according to press reports. Overall, as a market-leading business, PTTOR...

Arun George

Sheng Siong (SSG): Sustainable High Growth?

Singapore statistics reported that the revenue increase from supermarkets, CSs has slowed down while F&B sales have grown 60% QoQ, reflecting a...

Henry Soediarko

Catalyst Calendar for Thai Equities 2021

Many catalysts will pop up in late 2020 and the year 2021, which will likely test Thailand in terms of consumer sentiments, politics, and tourism...

Athaporn Arayasantiparb, CFA

BJC: Expect SSSG to Bottom Out in 4Q20

We maintain our positive outlook in 2021 earnings driven by improvement of SSSG by 3%YoY in 2021E , recovery in rental income and cost saving from...

Pi Securities PCL, Thailand

Thai Beverage (Thbev): Brewing for Reopening

Thai Beverage is uniquely positioned as a Thai company listed in Singapore with an exposure to the reopening of tourism in Thailand.

Henry Soediarko

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