Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).</li>
<li>In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in December 2024.</li>
<li>At present, we see 3 ADDs and 3 DELs but since the reference period is yet to start, the rankings can fluctuate significantly before the base date.</li>
</ul>


The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in December 2024.
At present, we see 3 ADDs and 3 DELs but since the reference period is yet to start, the rankings can fluctuate significantly before the base date.


Quiddity Leaderboard SET50 Dec 24: 3 Changes Likely; INTUCH-GULF Merger Should Be Monitored

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Cross Asset Strategy

<ul><li>SPPs’ share prices may experience selling pressure in the short term due to three cases concerning electricity tariffs and Ft rates during the final period, as public hearings indicate a high likelihood of government intervention amid the current economic fragility.</li><li>If the electricity tariff and Ft rate in the final period are capped, there will be no downside risk to our 2024E forecasts.</li><li>However, if the electricity tariff and Ft price fall under Case (3), this could present upside risk to our 2024E earnings projections for BGRIM and GPSC, by around 6%. </li></ul>

SPPs’ share prices may experience selling pressure in the short term due to three cases concerning electricity tariffs and Ft rates during the final period, as public hearings indicate a high likelihood of government intervention amid the current economic fragility.If the electricity tariff and Ft rate in the final period are capped, there will be no downside risk to our 2024E forecasts.However, if the electricity tariff and Ft price fall under Case (3), this could present upside risk to our 2024E earnings projections for BGRIM and GPSC, by around 6%. 

Thematic (Sector/Industry)

<ul><li>Negative surrounding factors pressured the share prices of the power sector last week.</li><li>Meanwhile, our key assumptions for 2024E, including SPP gas prices and the electricity sales volume of IUs, have been maintained.</li><li>The valuation metrics suggest that SPP operators’ current valuations are attractive and that the downside risk is very limited, with the equity risk premiums (ERP) higher than the 90-day rolling average. </li></ul>

Negative surrounding factors pressured the share prices of the power sector last week.Meanwhile, our key assumptions for 2024E, including SPP gas prices and the electricity sales volume of IUs, have been maintained.The valuation metrics suggest that SPP operators’ current valuations are attractive and that the downside risk is very limited, with the equity risk premiums (ERP) higher than the 90-day rolling average. 

Industry Update - Energy (Power) - JUNE 17, 2024

<ul><li>The Energy Regulatory Commission (ERC) resolved to set the electricity tariff at Bt4.18/unit and Ft at Bt0.3972/unit for May to August 2024, flat from the previous period.</li><li>These rates align with the Case 3 scenario, representing the lowest figures, and are in line with our 2024E projections, supported by the declining trend in gas costs, including lower LNG prices and increased G1/61 gas volume.</li><li>The decision is expected to facilitate effective management of electricity tariffs and enhance the opportunities and continuity for EGAT's reclamation of the Ft subsidy, which is nearing Bt100bn. </li></ul>

The Energy Regulatory Commission (ERC) resolved to set the electricity tariff at Bt4.18/unit and Ft at Bt0.3972/unit for May to August 2024, flat from the previous period.These rates align with the Case 3 scenario, representing the lowest figures, and are in line with our 2024E projections, supported by the declining trend in gas costs, including lower LNG prices and increased G1/61 gas volume.The decision is expected to facilitate effective management of electricity tariffs and enhance the opportunities and continuity for EGAT's reclamation of the Ft subsidy, which is nearing Bt100bn. 

Energy (Power) - Flat Electricity Tariff and Ft for May to August

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Merdeka Battery Materials / Equity Bottom-Up

<ul>
<li>EV supply chain is at a nascent stage in ASEAN and EV adoption in the region lags behind developed markets despite boasting a large population with a burgeoning middle class.</li>
<li>However, Governments in the region continue to introduce new initiatives and offer incentives to promote the sector, while companies continue to attract large investment to develop the EV market.</li>
<li>The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.</li>
</ul>


EV supply chain is at a nascent stage in ASEAN and EV adoption in the region lags behind developed markets despite boasting a large population with a burgeoning middle class.
However, Governments in the region continue to introduce new initiatives and offer incentives to promote the sector, while companies continue to attract large investment to develop the EV market.
The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.


ASEAN EV Ecosystem Update: Further Initiatives to Build a Regional EV Ecosystem

Thailand

Energy Absolute Public Company Limited engages in the research, development, and production of biodiesel products in Thailand.

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Energy Absolute (EA-R TB)

Quiddity Leaderboard SET50 Dec 24: 3 Changes Likely; INTUCH-GULF Merger Should Be Monitored

Although there are only three changes expected right now, there are multiple names just outside the border requiring small relative price changes...

Janaghan Jeyakumar, CFA

Industry Update - Energy (Power)

SPPs’ share prices may experience selling pressure in the short term due to three cases concerning electricity tariffs and Ft rates during the...

Krungthai XSpring

Industry Update - Energy (Power) - JUNE 17, 2024

Headwinds from inflated share prices; cheap valuation, limited downside. Negative surrounding factors pressured the share prices of the power...

Krungthai XSpring

Energy (Power) - Flat Electricity Tariff and Ft for May to August

The Energy Regulatory Commission (ERC) resolved to set the electricity tariff at Bt4.18/unit and Ft at Bt0.3972/unit for May to August 2024, flat...

Krungthai XSpring

ASEAN EV Ecosystem Update: Further Initiatives to Build a Regional EV Ecosystem

Development of a robust EV ecosystem remains a primary goal of the governments in the region. Governments continue to introduce new initiatives...

Shifara Samsudeen, ACMA, CGMA

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