Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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Back on the 18 March, <a href="https://www.smartkarma.com/entities/kerry-logistics-network-ltd" target="_blank" data-smartkarma-citation="entities:367:1" rel="noopener">Kerry Logistics Network (636 HK)</a> (KLN) <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2019/0318/LTN20190318261.pdf" target="_blank" rel="noopener">announced</a> the possible spin-off and separate listing of 63%-held Kerry Express (Thailand) (KET) on the stock exchange of Thailand. KET is principally engaged in the business of express delivery business in Thailand. 
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A strategic partnership was established with GI Global Media Public, a subsidiary of <a href="https://www.smartkarma.com/entities/15943" target="_blank" data-smartkarma-citation="entities:15943:1" rel="noopener">BTS Group Holdings (BTS TB)</a>, <a href="http://www3.hkexnews.hk/listedco/listconews/SEHK/2018/0424/LTN20180424095.pdf" target="_blank" rel="noopener">in July 2018</a>. GI Global paid THB5.9bn (HK$1.475bn) for 23% of KIT, implying a then market value of $6.4bn,  or ~HK$4bn for KLN's 63% stake.
Details of KET's December listing have now been issued - all <a href="https://market.sec.or.th/public/ipos/IPOSEQ01.aspx?TransID=305545" target="_blank" rel="noopener">relevant information</a> is in Thai. That stake in KET is now worth ~50% more, if using the mid-point of the IPO range. 
More below the fold.
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Back on the 18 March, Kerry Logistics Network (636 HK) (KLN) announced the possible spin-off and separate listing of 63%-held Kerry Express (Thailand) (KET) on the stock exchange of Thailand. KET is principally engaged in the business of express delivery business in Thailand. 


A strategic partnership was established with GI Global Media Public, a subsidiary of BTS Group Holdings (BTS TB), in July 2018. GI Global paid THB5.9bn (HK$1.475bn) for 23% of KIT, implying a then market value of $6.4bn,  or ~HK$4bn for KLN's 63% stake.
Details of KET's December listing have now been issued - all relevant information is in Thai. That stake in KET is now worth ~50% more, if using the mid-point of the IPO range. 
More below the fold.





Kerry Logistics (636 HK): Kerry Express' Spin-Off

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Thematic (Sector/Industry)

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.

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. 31

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/bts-group-holdings-pcl" target="_blank" data-smartkarma-citation="entities:15943:1" rel="noopener">BTS Group Holdings (BTS TB)</a> is back on the market to sell 1.3bn shares in <a href="https://www.smartkarma.com/entities/vgi-pcl" target="_blank" data-smartkarma-citation="entities:12409:1" rel="noopener">VGI PCL (VGI TB)</a> at a fixed price of THB6 per share. VGI beat estimates in its latest Q2 results but the massive deal size may impede near-term performance as it accounts for 44 days of three-month ADV.We covered BTS' 2019 selldown in:<ul><li><a href="https://www.smartkarma.com/insights/vgi-global-media-placement-high-growth-monopoly-with-good-returns-from-past-deals" target="_blank" rel="noopener">VGI Global Media Placement: High Growth Monopoly with Good Returns from Past Deals</a></li></ul>

BTS Group Holdings (BTS TB) is back on the market to sell 1.3bn shares in VGI PCL (VGI TB) at a fixed price of THB6 per share. VGI beat estimates in its latest Q2 results but the massive deal size may impede near-term performance as it accounts for 44 days of three-month ADV.We covered BTS' 2019 selldown in:VGI Global Media Placement: High Growth Monopoly with Good Returns from Past Deals

VGI Global Placement - Biggest Block Ever by BTS

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

The government has handled several minor demonstrations, but the problem intensified in October and simply won't go away. In this review, we look at this new crisis in greater detail.<ul>
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The Situation since October. Anti-government protests became a daily event in Thailand even as the country gears up for its regional elections. Fortunately, clashes between royalist and anti-monarchists remained relatively tame.</li>
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Roots of the crisis. A multi-faction protest with conflicting agendas does not explode in one day. We trace this crisis to five key factors: the odd Senate appointment, les majeste laws, social media, the Prime Minister's own actions, and the economic weakness.
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Potential solution. After discussing with several business and political watchers, we believe a short term victory for the government but a long term victory by the protesters is the most likely outcome. The current deadlock could extend for several months.</li>
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Implication on Thai equities. Hotels and transport stocks will be most affected by the protest. Defensives, healthcare, and WFH plays should be beneficiaries.</li>
</ul>

The government has handled several minor demonstrations, but the problem intensified in October and simply won't go away. In this review, we look at this new crisis in greater detail.

The Situation since October. Anti-government protests became a daily event in Thailand even as the country gears up for its regional elections. Fortunately, clashes between royalist and anti-monarchists remained relatively tame.

Roots of the crisis. A multi-faction protest with conflicting agendas does not explode in one day. We trace this crisis to five key factors: the odd Senate appointment, les majeste laws, social media, the Prime Minister's own actions, and the economic weakness.


Potential solution. After discussing with several business and political watchers, we believe a short term victory for the government but a long term victory by the protesters is the most likely outcome. The current deadlock could extend for several months.

Implication on Thai equities. Hotels and transport stocks will be most affected by the protest. Defensives, healthcare, and WFH plays should be beneficiaries.


Dissecting the 2020 Thai Political Crisis

Thailand has been one of Asia's worst performers in 2020, but for many of the same reasons, the Thai market will look more attractive in 2021:<ul>
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Low base effects. An expected economic decline of 8% and earnings decline of 30% (with a quarter of listed companies losing money) has greatly lowered the bar for Thai companies. This makes it very attractive to bet on recovery stories, especially those that have been directly impacted by COVID-19 (such as tourism) and those catering to the rich.</li>
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Continuation of QE. In an environment of strong QE action from the United States and other OECD nations, we are not expecting multiples to narrow even as earnings expand. The bias should remain on big caps that can absorb the surge in foreign liquidity.</li>
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The remote economy is likely to continue at least for the first nine months, and if there is political instability, it will come in handy as well. We continue to expect broadband Internet providers or anything related to e-commerce and gaming to do well in much of 2021.</li>
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Thailand has been one of Asia's worst performers in 2020, but for many of the same reasons, the Thai market will look more attractive in 2021:

Low base effects. An expected economic decline of 8% and earnings decline of 30% (with a quarter of listed companies losing money) has greatly lowered the bar for Thai companies. This makes it very attractive to bet on recovery stories, especially those that have been directly impacted by COVID-19 (such as tourism) and those catering to the rich.

Continuation of QE. In an environment of strong QE action from the United States and other OECD nations, we are not expecting multiples to narrow even as earnings expand. The bias should remain on big caps that can absorb the surge in foreign liquidity.

The remote economy is likely to continue at least for the first nine months, and if there is political instability, it will come in handy as well. We continue to expect broadband Internet providers or anything related to e-commerce and gaming to do well in much of 2021.


Thailand

BTS Group Holdings PCL is primarily in the business of Mass Transit.  The Company operates Bangkok's BTS SkyTrain system and the Bus Rapid Transit (BRT) System. BTS Group Holdings PCL is also involved in Media & Advertising, Property Development, and Services business.

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BTS Group Holdings (BTS TB)

Kerry Logistics (636 HK): Kerry Express' Spin-Off

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David Blennerhassett

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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...

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Zhen Zhou, Toh

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Athaporn Arayasantiparb, CFA

Thai Strategy 2021 (Part 1): Key Themes

The theme of the 2021 Thai strategy will be dominated by three things: a recovery story, a QE-inspired preference for big cap, and early-year...

Athaporn Arayasantiparb, CFA

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