Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Total Access Communication / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/total-access-communication" target="_blank" data-smartkarma-citation="entities:948:1" rel="noopener">Total Access Communication (DTAC TB)</a> and <a href="https://www.smartkarma.com/entities/true-corp-pcl" target="_blank" data-smartkarma-citation="entities:8:1" rel="noopener">True Corp Pcl (TRUE TB)</a> are exploring a merger of equals at a swap ratio of 1:10.221. NBTC approval could be the biggest hurdle.</li>
<li>Both stocks are trading lower than their Voluntary Tender Offer prices. The spread is between 5.5-6.5% and that could close over the next couple of months.</li>
<li>We prefer a long <a href="https://www.smartkarma.com/entities/total-access-communication" target="_blank" data-smartkarma-citation="entities:948:1" rel="noopener">Total Access Communication (DTAC TB)</a> / short <a href="https://www.smartkarma.com/entities/true-corp-pcl" target="_blank" data-smartkarma-citation="entities:8:1" rel="noopener">True Corp Pcl (TRUE TB)</a> trade as the downside is protected in case of a deal break.</li>
</ul>



Total Access Communication (DTAC TB) and True Corp Pcl (TRUE TB) are exploring a merger of equals at a swap ratio of 1:10.221. NBTC approval could be the biggest hurdle.
Both stocks are trading lower than their Voluntary Tender Offer prices. The spread is between 5.5-6.5% and that could close over the next couple of months.
We prefer a long Total Access Communication (DTAC TB) / short True Corp Pcl (TRUE TB) trade as the downside is protected in case of a deal break.


DTAC/TRUE Merger: Details and Index Implications

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

Equity Bottom-Up

<p><strong>We expect ADVANC to report 3Q21 net profit at Bt6.6bn (+2.9%YoY, -4.8%QoQ), with increasing marketing costs to promote their new streaming service Disney Plus</strong></p><p>• We expect 3Q21 revenue at Bt43bn, (+3.0%YoY, +0.5%QoQ), arising from growth in subscriber base to 43.7 million (+7%YoY,+1%QoQ) offset by declining ARPU</p><p>• We foresee mobile blended ARPU to continue tumbling to Bt222 (-6.4%YoY, -1.4%QoQ) from a struggling economy and decreased spending from consumers, leading to further price wars</p><p>• We also assume a peak in 4Q21 due to a boost in handheld device sales that support 5G and net additional subscribers, which has historically been the case for the company</p><div><strong>We maintain BUY rating and target price of Bt227.3, derived from a DCF, implying 23.9xPE’22E, which is in line with the Thai telecoms sector as a result of recent price hikes. Our rating is backed by robust earnings with significant growth potential in 5G and with its largest total spectrum of bandwidth compared to peers.</strong></div>

We expect ADVANC to report 3Q21 net profit at Bt6.6bn (+2.9%YoY, -4.8%QoQ), with increasing marketing costs to promote their new streaming service Disney Plus• We expect 3Q21 revenue at Bt43bn, (+3.0%YoY, +0.5%QoQ), arising from growth in subscriber base to 43.7 million (+7%YoY,+1%QoQ) offset by declining ARPU• We foresee mobile blended ARPU to continue tumbling to Bt222 (-6.4%YoY, -1.4%QoQ) from a struggling economy and decreased spending from consumers, leading to further price wars• We also assume a peak in 4Q21 due to a boost in handheld device sales that support 5G and net additional subscribers, which has historically been the case for the companyWe maintain BUY rating and target price of Bt227.3, derived from a DCF, implying 23.9xPE’22E, which is in line with the Thai telecoms sector as a result of recent price hikes. Our rating is backed by robust earnings with significant growth potential in 5G and with its largest total spectrum of bandwidth compared to peers.

ADVANC: Expect 3Q21 Earnings to Drop Slightly QoQ

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

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

Cross Asset Strategy

<div class="content-highlight">
<p>The week that was in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma</a> is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.</p>
<p>We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.</p>
</div><h3>Macro Insights</h3><p>In<a href="https://www.smartkarma.com/insights/singapore-taking-the-pulse-of-the-labour-market-recovery" target="_blank" rel="noopener"> Singapore: Taking the Pulse of the Labour Market Recovery</a>, economist<a href="https://www.smartkarma.com/profiles/nigel-chiang" target="_blank" rel="noopener"> Nigel Chiang</a> discusses Singapore's labour market that has recovered slowly in 2Q21 and its economic outlook. </p><p>In<a href="https://www.smartkarma.com/insights/covid-19-too-much-pessimism-over-southeast-asia" target="_blank" rel="noopener"> Covid-19: Too Much Pessimism Over Southeast Asia</a>,<a href="https://www.smartkarma.com/profiles/nicholas-chia" target="_blank" rel="noopener"> Nicholas Chia</a> discusses Southeast Asia's poor pandemic management and a slow vaccine rollout has raised pessimism over the region’s prospects but sees more optimism ahead.</p><h3>Equity Bottom Up</h3><p>In<a href="https://www.smartkarma.com/insights/bank-negara-indonesia-bbni-ij-revealing-a-new-digital-skin" target="_blank" rel="noopener"> Bank Negara Indonesia (BBNI IJ) - Revealing a New Digital Skin</a>,<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> takes a closer look at<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" rel="noopener"> Bank Negara Indonesia Persero (BBNI IJ)</a> after<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" rel="noopener"> Bank Negara Indonesia Persero (BBNI IJ)</a> revealed some interesting views on its strategy for expansion in a recent webinar. <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener"></a></p><p>In<a href="https://www.smartkarma.com/insights/erajaya-swasembada-eraa-ij-better-reception-ahead" target="_blank" rel="noopener"> Erajaya Swasembada (ERAA IJ) - Better Reception Ahead</a>, CrossASEAN insight provider<a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener"> Angus Mackintosh</a> circles back to<a href="https://www.smartkarma.com/entities/erajaya-swasembada-tbk-pt" target="_blank" rel="noopener"> Erajaya Swasembada (ERAA IJ)</a> after an interaction with management. </p><p>In<a href="https://www.smartkarma.com/insights/erajaya-eraa-beneficiary-of-whatsapp-and-google-update" target="_blank" rel="noopener"> Erajaya (ERAA): Beneficiary of WhatsApp and Google Update</a>,<a href="https://www.smartkarma.com/profiles/henry-soediarko" target="_blank" rel="noopener"> Henry Soediarko</a> revisits<a href="https://www.smartkarma.com/entities/erajaya-swasembada-tbk-pt" target="_blank" rel="noopener"> Erajaya Swasembada (ERAA IJ)</a> after it registered strong growth, partly driven by Google and WhatsApp security updates that require new smartphones. </p><p>In<a href="https://www.smartkarma.com/insights/bukalapak-buka-ij-fast-entry-to-idx30-lq45-idx80-msci-on-track-for-november" target="_blank" rel="noopener"> Bukalapak (BUKA IJ): Fast Entry to IDX30, LQ45, IDX80; MSCI on Track for November</a>,<a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" rel="noopener"> Brian Freitas</a> discusses<a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" rel="noopener"> Bukalapak (BUKA IJ)</a>'s entry to IDX30, LQ45, IDX80, JII and JII70 Indexes. This follows a recently proposed change to the indices to allow for Fast Entry inclusions. </p><p>In<a href="https://www.smartkarma.com/insights/scb-scbx-will-unlock-potential-growth-in-the-long-term" target="_blank" rel="noopener"> SCB: SCBX Will Unlock Potential Growth in the Long-Term</a>,<a href="https://www.smartkarma.com/companies/country-group" target="_blank" rel="noopener"> Country Group</a> circles back to<a href="https://www.smartkarma.com/entities/siam-commercial-bank-pub-co" target="_blank" rel="noopener"> Siam Commercial Bank Pub Co (SCB TB)</a> post the analyst meeting showed that the management plan to set up SCBX, a newly established holding company in place of SCB.</p>


The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive, and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
We add below a NEW section, which includes emerging themes in ASEAN and selects important news flow or developments for commentary, which may impact SE Asian companies and markets.
Macro InsightsIn Singapore: Taking the Pulse of the Labour Market Recovery, economist Nigel Chiang discusses Singapore's labour market that has recovered slowly in 2Q21 and its economic outlook. In Covid-19: Too Much Pessimism Over Southeast Asia, Nicholas Chia discusses Southeast Asia's poor pandemic management and a slow vaccine rollout has raised pessimism over the region’s prospects but sees more optimism ahead.Equity Bottom UpIn Bank Negara Indonesia (BBNI IJ) - Revealing a New Digital Skin, Angus Mackintosh takes a closer look at Bank Negara Indonesia Persero (BBNI IJ) after Bank Negara Indonesia Persero (BBNI IJ) revealed some interesting views on its strategy for expansion in a recent webinar. In Erajaya Swasembada (ERAA IJ) - Better Reception Ahead, CrossASEAN insight provider Angus Mackintosh circles back to Erajaya Swasembada (ERAA IJ) after an interaction with management. In Erajaya (ERAA): Beneficiary of WhatsApp and Google Update, Henry Soediarko revisits Erajaya Swasembada (ERAA IJ) after it registered strong growth, partly driven by Google and WhatsApp security updates that require new smartphones. In Bukalapak (BUKA IJ): Fast Entry to IDX30, LQ45, IDX80; MSCI on Track for November, Brian Freitas discusses Bukalapak (BUKA IJ)'s entry to IDX30, LQ45, IDX80, JII and JII70 Indexes. This follows a recently proposed change to the indices to allow for Fast Entry inclusions. In SCB: SCBX Will Unlock Potential Growth in the Long-Term, Country Group circles back to Siam Commercial Bank Pub Co (SCB TB) post the analyst meeting showed that the management plan to set up SCBX, a newly established holding company in place of SCB.

The Week That Was in ASEAN@Smartkarma - BNI More Digital, Erajaya on Fire, and Siam Commercial Bank

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<p><a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a> is a head-scratcher.</p>
<div>
<p>Below is a timeline of events that unfolded since April last year, together with my insights:</p>
</div>
<div>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 139.871px;">
<h3>Date</h3>
</td>
<td style="width: 606.141px;">
<h3>Data in the Date</h3>
</td>
</tr>
<tr>
<td style="width: 139.871px;">7-Apr-20</td>
<td style="width: 606.141px;">
<div>
<p>Temasek was understood to be selling 135.2m shares of <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a> at between Bt45.12-Bt46.3/share, or a discount of 2% to 4.5% to the prior closing price. The news was initially sourced from Bloomberg. <br><br><em><a href="https://skr.ma/Y44cD" target="_blank" rel="noopener">Intouch: Temasek Trims Stake; More To Come</a></em></p>
</div>
</td>
</tr>
<tr>
<td style="width: 139.871px;">28-Aug-20</td>
<td style="width: 606.141px;">
<a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a>’s board of directors <a href="https://www.set.or.th/set/newsdetails.do?newsId=15985721258680&amp;language=en&amp;country=US" target="_blank" rel="noopener">decided</a> to hold no more than a 10% stake in <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a>. As of August 21, Gulf holds a 7.99% stake in Intouch.<br><br><em><a href="https://skr.ma/c7MNt" target="_blank" rel="noopener">StubWorld: Gulf's Questionable Stake In Intouch</a></em>
</td>
</tr>
<tr>
<td style="width: 139.871px;">6-Oct-20</td>
<td style="width: 606.141px;">10% was achieved on the <a href="https://www.set.or.th/dat/news/202010/20111444.pdf" target="_blank" rel="noopener">6 October</a>, making Gulf the second-largest shareholder behind <a href="https://www.smartkarma.com/entities/singapore-telecommunications" target="_blank" data-smartkarma-citation="entities:20:1" rel="noopener">Singtel (ST SP)</a> (21%). </td>
</tr>
<tr>
<td style="width: 139.871px;">30-Dec-20</td>
<td style="width: 606.141px;">Gulf <a href="https://www.set.or.th/set/newsdetails.do?newsId=16092855169460&amp;language=en&amp;country=US" target="_blank" rel="noopener">announced</a> "<em>that the Board of Directors’ of the Company on October 6, 2020, November 30, 2020 and December 29, 2020 has resolved to approve the Company’s additional investment in the ordinary shares in INTUCH in aggregate of up to 5.00 per cent</em>." As at 30 December, Gulf held <a href="https://www.intouchcompany.com/Download/intuch/INTUCH-Notification%20of%20a%20change%20in%20the%20Company%E2%80%99s%20shareholding%20structure%20made%20by%20a%20major%20shareholder.pdf" target="_blank" rel="noopener">14.39%</a>.</td>
</tr>
<tr>
<td style="width: 139.871px;">28-Jan-21</td>
<td style="width: 606.141px;">Gulf holds 15% on <a href="https://www.nationthailand.com/news/30402235" target="_blank" rel="noopener">28 January</a>.</td>
</tr>
<tr>
<td style="width: 139.871px;">12-Apr-21</td>
<td style="width: 606.141px;">I (incorrectly) suggested reversing the stub given <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a>'s long-term discount to NAV and the simple ratio (Intouch over <a href="https://www.smartkarma.com/entities/advanced-info-service-pcl" target="_blank" data-smartkarma-citation="entities:947:1" rel="noopener">Advanced Info Service (ADVANC TB)</a>) are at all-time extremes.  <br><br><em><a href="https://skr.ma/Vekzg" target="_blank" rel="noopener">StubWorld: Reverse Intouch's Stub; (Potentially) Set Up PICC (1339 HK)'s</a></em>
</td>
</tr>
<tr>
<td style="width: 139.871px;">19-Apr-21</td>
<td style="width: 606.141px;">Gulf <a href="https://www.set.or.th/set/pdfnews.do?newsId=16187886028860&amp;sequence=0" target="_blank" rel="noopener">announced</a> it intends to make a Voluntary Tender Offer (VTO) for shares not held in Intouch at Bt65/share. If it gets to 50%, it will make a downstream offer for <a href="https://www.smartkarma.com/entities/advanced-info-service-pcl-ca1a971f-2f70-4565-b1fd-dda5b533acd3" target="_blank" data-smartkarma-citation="entities:27653:1" rel="noopener">Advanced Info Service PCL (ADVANC-R TB)</a> at Bt122.86/share. The VTO is conditional, amongst other things, on a waiver NOT to make a  downstream offer for <a href="https://www.smartkarma.com/entities/thaicom-pcl" target="_blank" data-smartkarma-citation="entities:18019:1" rel="noopener">Thaicom Pcl (THCOM TB</a>.<br><br><em><a href="https://skr.ma/YTbgf" target="_blank" rel="noopener">Intouch Holdings: Gulf's Inexplicable Offer</a></em>
</td>
</tr>
<tr>
<td style="width: 139.871px;">1-Jun-21</td>
<td style="width: 606.141px;"> <a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a> has <a href="https://www.set.or.th/set/newsdetails.do?newsId=16221589634070&amp;language=en&amp;country=US" target="_blank" rel="noopener">reduced</a> the downstream offer for <a href="https://www.smartkarma.com/entities/advanced-info-service-pcl" target="_blank" data-smartkarma-citation="entities:947:1" rel="noopener">Advanced Info Service (ADVANC TB)</a> to Bt120.93/share from Bt122.86/share. It appears the new number is based on the latest financial figures, up to 31 March.</td>
</tr>
<tr>
<td style="width: 139.871px;">4-Jun-21</td>
<td style="width: 606.141px;">160mn shares of <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a> - a 4.99% stake - traded after the close at Bt64.86/share.<br><br><em><a href="https://skr.ma/TpN7Z" target="_blank" rel="noopener">StubWorld: Intouch's Big Share Transfer</a></em>
</td>
</tr>
<tr>
<td style="width: 139.871px;">29-Jun-21</td>
<td style="width: 606.141px;">
<a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a>'s Tender Offer for <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a> starts <a href="https://www.set.or.th/set/pdfnews.do?newsId=16248374186790&amp;sequence=2021071934" target="_blank" rel="noopener">today</a>.  The Offer closes on the 4 August - 25 business days. <br><br><em><a href="https://skr.ma/bBx6r" target="_blank" rel="noopener">StubWorld: Gulf's Curious Offer For Intouch Now Open</a></em>
</td>
</tr>
<tr>
<td style="width: 139.871px;">19-Jul-21</td>
<td style="width: 606.141px;">
<a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a>'s IFA <a href="https://www.set.or.th/set/pdfnews.do?newsId=16266518153870&amp;sequence=2021078813" target="_blank" rel="noopener">says</a> the Offer from <a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a> is "appropriate". Equally unsurprising, <a href="https://www.smartkarma.com/entities/advanced-info-service-pcl" target="_blank" data-smartkarma-citation="entities:947:1" rel="noopener">Advanced Info Service (ADVANC TB)</a>'s IFA <a href="https://www.set.or.th/set/pdfnews.do?newsId=16266518153760&amp;sequence=2021078811" target="_blank" rel="noopener">has</a> the opinion that the shareholders should reject the Tender Offer from Gulf.<br><br><em><a href="https://skr.ma/7DTjP" target="_blank" rel="noopener">StubWorld: IFAs Say "Yea" For Intouch, "Nay" For AIS</a></em>
</td>
</tr>
<tr>
<td style="width: 139.871px;">5-Aug-21</td>
<td style="width: 606.141px;">The Offer for <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl-3e2a0083-1080-4c9c-86c6-10624bce3a2a" target="_blank" data-smartkarma-citation="entities:28056:1" rel="noopener">Intouch Holdings PCL (INTUCH-R TB)</a> has closed with <a href="https://www.smartkarma.com/entities/gulf-energy-development-public-company-limited" target="_blank" data-smartkarma-citation="entities:26038:1" rel="noopener">Gulf Energy Development Public Company (GULF TB)</a> acquiring <a href="https://www.set.or.th/set/pdfnews.do?newsId=16281206078180&amp;sequence=2021084057" target="_blank" rel="noopener">23.32%</a>, taking its stake to 42.25%.<br><br><a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a> expected (in <em><a href="https://skr.ma/gXuQc" target="_blank" rel="noopener">GULF/INTUCH: Large Tenders Will Result in Big Passive Sell</a></em>) FTSE to lower <a href="https://www.smartkarma.com/entities/intouch-holdings-pcl" target="_blank" data-smartkarma-citation="entities:17638:1" rel="noopener">Intouch Holdings (INTUCH TB)</a>'s investability weight to 36.75% and MSCI to lower the FIF to 40%. Together, passive funds will need to sell around 84.45m shares (US$161m; 14.5 days of ADV).</td>
</tr>
<tr>
<td style="width: 139.871px;">16-Aug-21</td>
<td style="width: 606.141px;">Just 2,032 shares <a href="https://www.set.or.th/set/pdfnews.do?newsId=16290671598140&amp;sequence=2021091609" target="_blank" rel="noopener">tendered</a> into the downstream Offer for AIS. </td>
</tr>
<tr>
<td colspan="2" style="width: 746.012px;"><em>Source: SET announcements, my insights</em></td>
</tr>
</tbody>
</table>
</div>
<div>
<p>Back in early June, I recommend avoiding Intouch, but not shorting it, or short tender the stock into Gulf's Offer.</p>
<p>Extraordinary - or perhaps given the unprecedented events - the NAV discount went from 9.7% at the close of the Offer, to a 16.8% premium as of yesterday.</p>
<p>The implied stub and the simple ratio (Intouch/AIS) have never been at such extreme levels.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/440/original/image_83946068721631064197442.png?1631064198" class="editor-image img-responsive" data-smartkarma-image-id="228440"></figure>
</div>
<div style="text-align: left;" class="content-caption">Source: CapIQ</div>
<div>
<p>Sarath Ratanavadi’s Gulf Energy failed to achieve majority ownership in Intouch. There is nothing, to the best of my knowledge, keeping Gulf from buying more shares in the market (not exceeding Bt65/share), although if Gulf's stake clears 50% of shares out, then it would be obligated to make an MTO.</p>
<h3>The New News</h3>
<p>According to <a href="https://www.isranews.org/article/isranews-news/102276-gov-thaicom-concession-news.html" target="_blank" rel="noopener">local news</a> and Bloomberg - and <a href="https://www.smartkarma.com/entities/thaicom-pcl" target="_blank" data-smartkarma-citation="entities:18019:1" rel="noopener">Thaicom Pcl (THCOM TB)</a>'s SET <a href="https://www.set.or.th/set/pdfnews.do?newsId=16310581966210&amp;sequence=0" target="_blank" rel="noopener">filing</a> - Thailand's cabinet has made an order for Intouch to lift its take to at least 51% in Thaicom, from 41.13% currently. </p>
<p>Thaicom's shares jumped 15% on the news yesterday. Intouch gained ~3%.</p>
<p>It's not a lot of money for Intouch, but it's a good opportunity to provide some background on its stake in Thaicom, and potential trade ideas for Intouch.</p>
<p>More below the fold. </p>
</div>

Intouch Holdings (INTUCH TB) is a head-scratcher.

Below is a timeline of events that unfolded since April last year, together with my insights:






Date


Data in the Date



7-Apr-20


Temasek was understood to be selling 135.2m shares of Intouch Holdings (INTUCH TB) at between Bt45.12-Bt46.3/share, or a discount of 2% to 4.5% to the prior closing price. The news was initially sourced from Bloomberg.   Intouch: Temasek Trims Stake; More To Come




28-Aug-20

Gulf Energy Development Public Company (GULF TB)’s board of directors decided to hold no more than a 10% stake in Intouch Holdings (INTUCH TB). As of August 21, Gulf holds a 7.99% stake in Intouch.  StubWorld: Gulf's Questionable Stake In Intouch



6-Oct-20
10% was achieved on the 6 October, making Gulf the second-largest shareholder behind Singtel (ST SP) (21%). 


30-Dec-20
Gulf announced "that the Board of Directors’ of the Company on October 6, 2020, November 30, 2020 and December 29, 2020 has resolved to approve the Company’s additional investment in the ordinary shares in INTUCH in aggregate of up to 5.00 per cent." As at 30 December, Gulf held 14.39%.


28-Jan-21
Gulf holds 15% on 28 January.


12-Apr-21
I (incorrectly) suggested reversing the stub given Intouch Holdings (INTUCH TB)'s long-term discount to NAV and the simple ratio (Intouch over Advanced Info Service (ADVANC TB)) are at all-time extremes.    StubWorld: Reverse Intouch's Stub; (Potentially) Set Up PICC (1339 HK)'s



19-Apr-21
Gulf announced it intends to make a Voluntary Tender Offer (VTO) for shares not held in Intouch at Bt65/share. If it gets to 50%, it will make a downstream offer for Advanced Info Service PCL (ADVANC-R TB) at Bt122.86/share. The VTO is conditional, amongst other things, on a waiver NOT to make a  downstream offer for Thaicom Pcl (THCOM TB.  Intouch Holdings: Gulf's Inexplicable Offer



1-Jun-21
 Gulf Energy Development Public Company (GULF TB) has reduced the downstream offer for Advanced Info Service (ADVANC TB) to Bt120.93/share from Bt122.86/share. It appears the new number is based on the latest financial figures, up to 31 March.


4-Jun-21
160mn shares of Intouch Holdings (INTUCH TB) - a 4.99% stake - traded after the close at Bt64.86/share.  StubWorld: Intouch's Big Share Transfer



29-Jun-21

Gulf Energy Development Public Company (GULF TB)'s Tender Offer for Intouch Holdings (INTUCH TB) starts today.  The Offer closes on the 4 August - 25 business days.   StubWorld: Gulf's Curious Offer For Intouch Now Open



19-Jul-21

Intouch Holdings (INTUCH TB)'s IFA says the Offer from Gulf Energy Development Public Company (GULF TB) is "appropriate". Equally unsurprising, Advanced Info Service (ADVANC TB)'s IFA has the opinion that the shareholders should reject the Tender Offer from Gulf.  StubWorld: IFAs Say "Yea" For Intouch, "Nay" For AIS



5-Aug-21
The Offer for Intouch Holdings PCL (INTUCH-R TB) has closed with Gulf Energy Development Public Company (GULF TB) acquiring 23.32%, taking its stake to 42.25%.  Brian Freitas expected (in GULF/INTUCH: Large Tenders Will Result in Big Passive Sell) FTSE to lower Intouch Holdings (INTUCH TB)'s investability weight to 36.75% and MSCI to lower the FIF to 40%. Together, passive funds will need to sell around 84.45m shares (US$161m; 14.5 days of ADV).


16-Aug-21
Just 2,032 shares tendered into the downstream Offer for AIS. 


Source: SET announcements, my insights





Back in early June, I recommend avoiding Intouch, but not shorting it, or short tender the stock into Gulf's Offer.
Extraordinary - or perhaps given the unprecedented events - the NAV discount went from 9.7% at the close of the Offer, to a 16.8% premium as of yesterday.
The implied stub and the simple ratio (Intouch/AIS) have never been at such extreme levels.


Source: CapIQ

Sarath Ratanavadi’s Gulf Energy failed to achieve majority ownership in Intouch. There is nothing, to the best of my knowledge, keeping Gulf from buying more shares in the market (not exceeding Bt65/share), although if Gulf's stake clears 50% of shares out, then it would be obligated to make an MTO.
The New News
According to local news and Bloomberg - and Thaicom Pcl (THCOM TB)'s SET filing - Thailand's cabinet has made an order for Intouch to lift its take to at least 51% in Thaicom, from 41.13% currently. 
Thaicom's shares jumped 15% on the news yesterday. Intouch gained ~3%.
It's not a lot of money for Intouch, but it's a good opportunity to provide some background on its stake in Thaicom, and potential trade ideas for Intouch.
More below the fold. 


CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

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We highlight 14 stocks in Thailand that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Thai market to try to find interesting ideas base upon Fundamentals or Valuation or Momentum or Risk or some combination thereof.

The Stocks to Own in Thailand – Vol. 34

Thailand

Advanced Info Service Public Company Limited is granted a 25-year concession expiring the year 2015 by the Telephone Organization of Thailand to provide cellular phone services.  The Company provides analog mobile phone services through the Nordic Mobile Telephone (NMT900) network, and digital phone services through the Global Systems for Mobile Communication (GSM) network.

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A. Stotz Investment Research

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