Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

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<p>This week in StubWorld ...</p>
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<p>Following the <a href="https://links.sgx.com/FileOpen/THBEV_Potential_Spin_Off_Listing_of_BeerCo.ashx?App=Announcement&amp;FileID=647386" target="_blank" rel="noopener">no-objection notice</a> from the SGX on the <a href="https://links.sgx.com/FileOpen/THBEV_Potential_Spin_Off_Listing_of_BeerCo.ashx?App=Announcement&amp;FileID=647386" target="_blank" rel="noopener">4 February</a> concerning its BeerCo IPO, <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> announced that the SGX has <a href="https://links.sgx.com/FileOpen/TB_Annoucement_Conditional_ETL_for_BeerCo.ashx?App=Announcement&amp;FileID=654525" target="_blank" rel="noopener">issued</a> its conditional eligibility-to-list letter for the potential listing.  </p>
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<p>Preceding my comments on ThaiBev are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




Following the no-objection notice from the SGX on the 4 February concerning its BeerCo IPO, Thai Beverage (THBEV SP) announced that the SGX has issued its conditional eligibility-to-list letter for the potential listing.  




Preceding my comments on ThaiBev are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: ThaiBev’s BeerCo Spin-Off One Step Closer

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The Stock Exchange of Thailand (SET) has commenced a market consultation on changing the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a>, SET100 and SETHD indices to free float market cap weighted indices from the upcoming rebalance in June.</p><p>The market consultation document is short on detail, but the main points are the change in index calculation from full market cap weighted to free float market cap weighted, implementation of the changes in two tranches at the June and December reviews, and implementation of quarterly changes in free float for moves of +/-5%.</p><p>The biggest uncertainty for us is whether the selection of the stocks for inclusion/exclusion will use the full market cap or the free float market cap.</p><p>Using the full market cap for stock selection could see 3 changes at the upcoming June review, while using free float market cap for stock selection could result in up to 6 changes at the review. The two step implementation of the free float changes will dampen the index turnover but it will still be relatively high, ranging from a one-way turnover of 7.8% for changes in free float only to 9.52% if the stock selection methodology uses free float market cap.</p><p>In this Insight, we look at the proposed changes and enumerate three scenarios, the changes they will entail, the impact on the stocks and the turnover for each scenario.</p>

The Stock Exchange of Thailand (SET) has commenced a market consultation on changing the Stock Exchange of Thailand SET 50 Index (SET50 INDEX), SET100 and SETHD indices to free float market cap weighted indices from the upcoming rebalance in June.The market consultation document is short on detail, but the main points are the change in index calculation from full market cap weighted to free float market cap weighted, implementation of the changes in two tranches at the June and December reviews, and implementation of quarterly changes in free float for moves of +/-5%.The biggest uncertainty for us is whether the selection of the stocks for inclusion/exclusion will use the full market cap or the free float market cap.Using the full market cap for stock selection could see 3 changes at the upcoming June review, while using free float market cap for stock selection could result in up to 6 changes at the review. The two step implementation of the free float changes will dampen the index turnover but it will still be relatively high, ranging from a one-way turnover of 7.8% for changes in free float only to 9.52% if the stock selection methodology uses free float market cap.In this Insight, we look at the proposed changes and enumerate three scenarios, the changes they will entail, the impact on the stocks and the turnover for each scenario.

SET50 Index - Proposed Methodology Changes: Scenarios, Names Affected & Impact

<div><p>The Stock Exchange of Thailand (SET) will announce the results of the semi-annual review of the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> in mid-June and the changes will be effective after the close of trading on 30 June.</p></div><div>
<p>The review period for market cap calculations runs from 1 March to 31 May, while the liquidity calculations run from 1 June 2020 to 31 May 2021.</p>
<p>We see three potential changes at the current time with an estimated one-way turnover for the rebalance at 2.19%.</p>
<p>Potential inclusions are <a href="https://www.smartkarma.com/entities/sri-trang-gloves-thailand-public-company-limited" target="_blank" data-smartkarma-citation="entities:29141:1" rel="noopener">Sri Trang Gloves (Thailand) Public Company Limited (STGT TB)</a>, <a href="https://www.smartkarma.com/entities/sri-trang-agro-industry-pcl" target="_blank" data-smartkarma-citation="entities:2759:1" rel="noopener">Sri Trang Agro Industry (STA TB)</a> and <a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a>.</p>
<p>Potential deletions are <a href="https://www.smartkarma.com/entities/vgi-pcl" target="_blank" data-smartkarma-citation="entities:12409:1" rel="noopener">VGI PCL (VGI TB)</a>, <a href="https://www.smartkarma.com/entities/com7-pcl" target="_blank" data-smartkarma-citation="entities:27411:1" rel="noopener">Com7 PCL (COM7 TB)</a> and <a href="https://www.smartkarma.com/entities/toa-paint-thailand-pcl" target="_blank" data-smartkarma-citation="entities:24235:1" rel="noopener">TOA Paint (Thailand) (TOA TB)</a>.</p>
<p><a href="https://www.smartkarma.com/entities/kerry-express-thailand" target="_blank" data-smartkarma-citation="entities:29253:1" rel="noopener">Kerry Express Thailand (KEX TB)</a> will not completed six months of trading history by the end of the review period and will not be eligible for inclusion at the June rebalance.</p>
<p>There is a possibility that the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> methodology is changed to make it a free float weighted market cap index from a full market cap index. That will see a lot of passive flow on some stocks that have a low free float.</p>
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The Stock Exchange of Thailand (SET) will announce the results of the semi-annual review of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) in mid-June and the changes will be effective after the close of trading on 30 June.
The review period for market cap calculations runs from 1 March to 31 May, while the liquidity calculations run from 1 June 2020 to 31 May 2021.
We see three potential changes at the current time with an estimated one-way turnover for the rebalance at 2.19%.
Potential inclusions are Sri Trang Gloves (Thailand) Public Company Limited (STGT TB), Sri Trang Agro Industry (STA TB) and IRPC PCL (IRPC TB).
Potential deletions are VGI PCL (VGI TB), Com7 PCL (COM7 TB) and TOA Paint (Thailand) (TOA TB).
Kerry Express Thailand (KEX TB) will not completed six months of trading history by the end of the review period and will not be eligible for inclusion at the June rebalance.
There is a possibility that the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) methodology is changed to make it a free float weighted market cap index from a full market cap index. That will see a lot of passive flow on some stocks that have a low free float.


SET50 Index Rebalance Preview: Potentially Three Changes & Move to Free Float Weighting

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

Gulf Energy Development  / Equity Bottom-Up

<p><strong>Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation with a target price of Bt41.4 derived using sum-of-the-parts (SOTP) methodology, implying a 90x PE’21.</strong></p><div>• The 1Q21 core earnings is expected to improve both YoY and QoQ on the back of full quarter profit recognition from BKR2 wind project (3Q20), better IPP seasonality and lower SG&amp;A expenses.</div><div></div><div>• Maintain positive 2021 earnings outlook with 27% YoY EPS growth from 1) Improving GPM from declining gas cost, Full year earnings recognition from 230MWe BKR2 and 1GWe project COD in 2021.</div><div></div><div>• Upside from new project acquisitions,  expected to be announced in 2021.</div>

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation with a target price of Bt41.4 derived using sum-of-the-parts (SOTP) methodology, implying a 90x PE’21.• The 1Q21 core earnings is expected to improve both YoY and QoQ on the back of full quarter profit recognition from BKR2 wind project (3Q20), better IPP seasonality and lower SG&amp;A expenses.• Maintain positive 2021 earnings outlook with 27% YoY EPS growth from 1) Improving GPM from declining gas cost, Full year earnings recognition from 230MWe BKR2 and 1GWe project COD in 2021.• Upside from new project acquisitions,  expected to be announced in 2021.

GULF: Grabbing New Growth Opportunities Though M&A’s

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

PTT Oil & Retail Business  / Equity Capital Markets

<p><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 (OR TB)</a> raised about US$1.6bn at THB18 per share, the top-end of the IPO price range.</p>
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<p>PTTOR is a market leader in the oil business as well as F&amp;B business. It has leveraged its service station network to build out its brand, Amazon Cafe, which has a strong presence even beyond service stations. </p>
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<p>We have previously covered the IPO in:</p>
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<a href="https://www.smartkarma.com/insights/ptt-oil-and-retail-ipo-f-b-business-is-the-profit-driver" target="_blank" data-smartkarma-citation="insights:39105" rel="noopener">PTT Oil and Retail IPO - F&amp;B Business Is the Profit Driver</a> </li>
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<a href="https://www.smartkarma.com/insights/ptt-oil-and-retail-ipo-updated-financials-and-competitive-landscape" target="_blank" data-smartkarma-citation="insights:47002" rel="noopener">PTT Oil and Retail IPO - Updated Financials and Competitive Landscape</a> </li>
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<a href="https://www.smartkarma.com/insights/ptt-oil-and-retail-ipo-thoughts-on-valuation" target="_blank" data-smartkarma-citation="insights:47003" rel="noopener">PTT Oil and Retail IPO - Thoughts on Valuation</a> </li>
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<a href="https://www.smartkarma.com/insights/ptt-oil-and-retail-ipo-attractive-valuation-with-favorable-deal-dynamics-index-inclusion" target="_blank" data-smartkarma-citation="insights:47073" rel="noopener">PTT Oil and Retail IPO - Attractive Valuation with Favorable Deal Dynamics (Index Inclusion)</a> </li>
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<p>In this note, we will look at the deal dynamics and provide implied valuations at different share price levels.</p>
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PTT Oil and Retail (OR TB) raised about US$1.6bn at THB18 per share, the top-end of the IPO price range.

PTTOR is a market leader in the oil business as well as F&amp;B business. It has leveraged its service station network to build out its brand, Amazon Cafe, which has a strong presence even beyond service stations. 


We have previously covered the IPO in:


PTT Oil and Retail IPO - F&amp;B Business Is the Profit Driver 

PTT Oil and Retail IPO - Updated Financials and Competitive Landscape 

PTT Oil and Retail IPO - Thoughts on Valuation 

PTT Oil and Retail IPO - Attractive Valuation with Favorable Deal Dynamics (Index Inclusion) 

In this note, we will look at the deal dynamics and provide implied valuations at different share price levels.


PTT Oil and Retail IPO Trading - Still Reasonably Priced at the Top-End

Thailand

Gulf Energy Development Public Company Limited produces and sells electricity and steam. The Company manages a portfolio of gas-fired and renewable power projects, as well as supplies steam and chilled water. Gulf Energy Development serves customers in Thailand.

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Gulf Energy Development (GULF TB)

StubWorld: ThaiBev’s BeerCo Spin-Off One Step Closer

I see perhaps 12% upside from here if assuming a 25% discount to NAV. Given its growth potential, investors may switch out of ThaiBev into BeerCo....

David Blennerhassett

SET50 Index - Proposed Methodology Changes: Scenarios, Names Affected & Impact

The SET has commenced a market consultation on the proposed changes to make its indices free float market cap weighted. We look at the impact on...

Brian Freitas

SET50 Index Rebalance Preview: Potentially Three Changes & Move to Free Float Weighting

There could be 3 changes to the SET50 at the June review with STGT, STA & IRPC joining the index at the expense of VGI, TOA & COM7. The methodology...

Brian Freitas

GULF: Grabbing New Growth Opportunities Though M&A’s

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation with a target price of Bt41.4 derived using sum-of-the...

Pi Securities PCL, Thailand

PTT Oil and Retail IPO Trading - Still Reasonably Priced at the Top-End

PTTOR raised about US$1.6bn at THB18 per share. In this note, we will look at the deal dynamics and provide implied valuations at different share...

Zhen Zhou, Toh

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