Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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

<div><p>Ngern Tid Lor (NTL), a financial service provider based in Thailand, aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly owned by Bank of Ayudhya and CVC Capital Partners. As per Oliver Wyman’s estimates, NTL had a 16% market share in the vehicle lending market in Thailand, as of 2019. </p></div><div><p>NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. It offers motor insurance, compulsory motor insurance, personal accident insurance, cancer insurance, and loan insurance. As of Dec 2020, it had over 730,000 accounts with total outstanding loans of THB51.3bn. In 2020, it generated non-life insurance premium sales of THB4bn. </p></div><div><p>Over 2016-20, NTL’s gross loans grew at 25.1% CAGR, averaging 25%+ per annum over 2017-19 before slowing down to 7% YoY growth in 2020. Its total income has grown at 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20. Although, asset quality has taken a hit owing to COVID-19 and Bank of Thailand's induced moratorium. </p></div><div>
<p>We have covered various aspects of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/ngern-tid-lor-pre-ipo-pre-covid-growth-track-record-has-been-very-strong" target="_blank" rel="noopener">Ngern Tid Lor Pre-IPO - Pre-COVID growth track record has been very strong</a> and <a href="https://www.smartkarma.com/insights/ngern-tid-lor-pre-ipo-peer-comparison-playing-catch-up-after-being-left-behind" target="_blank" rel="noopener">Ngern Tid Lor Pre-IPO - Peer Comparison - Playing Catch up After Being Left Behind</a>.</p>
<p>In this note we’ll talk about valuation and deal dynamics.</p>
</div>

Ngern Tid Lor (NTL), a financial service provider based in Thailand, aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly owned by Bank of Ayudhya and CVC Capital Partners. As per Oliver Wyman’s estimates, NTL had a 16% market share in the vehicle lending market in Thailand, as of 2019. NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. It offers motor insurance, compulsory motor insurance, personal accident insurance, cancer insurance, and loan insurance. As of Dec 2020, it had over 730,000 accounts with total outstanding loans of THB51.3bn. In 2020, it generated non-life insurance premium sales of THB4bn. Over 2016-20, NTL’s gross loans grew at 25.1% CAGR, averaging 25%+ per annum over 2017-19 before slowing down to 7% YoY growth in 2020. Its total income has grown at 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20. Although, asset quality has taken a hit owing to COVID-19 and Bank of Thailand's induced moratorium. 
We have covered various aspects of the deal in our earlier note, Ngern Tid Lor Pre-IPO - Pre-COVID growth track record has been very strong and Ngern Tid Lor Pre-IPO - Peer Comparison - Playing Catch up After Being Left Behind.
In this note we’ll talk about valuation and deal dynamics.


Ngern Tid Lor IPO - Not Really at a Large Discount but the Overall Sector Has Been Doing Very Well

<p>Ngern Tid Lor (NTL), a financial service provider based in Thailand, aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly owned by Bank of Ayudhya and CVC Capital Partners. As per Oliver Wyman’s estimates, NTL had a 16% market share in the vehicle lending market in Thailand, as of 2019. </p><p>NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. It offers motor insurance, compulsory motor insurance, personal accident insurance, cancer insurance, and loan insurance. As of Dec 2020, it had over 730,000 accounts with total outstanding loans of THB51.3bn. In 2020, it generated non-life insurance premium sales of THB4bn. </p><p>Over 2016-20, NTL’s gross loans grew at 25.1% CAGR, averaging 25%+ per annum over 2017-19 before slowing down to 7% YoY growth in 2020. Its total income has grown at 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20. Although, asset quality has taken a hit owing to COVID-19 and Bank of Thailand's induced moratorium. </p><p>We have covered various aspects of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/ngern-tid-lor-pre-ipo-pre-covid-growth-track-record-has-been-very-strong" target="_blank" rel="noopener">Ngern Tid Lor Pre-IPO - Pre-COVID growth track record has been very strong</a>. In this note we’ll undertake a peer comparison.</p>

Ngern Tid Lor (NTL), a financial service provider based in Thailand, aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly owned by Bank of Ayudhya and CVC Capital Partners. As per Oliver Wyman’s estimates, NTL had a 16% market share in the vehicle lending market in Thailand, as of 2019. NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. It offers motor insurance, compulsory motor insurance, personal accident insurance, cancer insurance, and loan insurance. As of Dec 2020, it had over 730,000 accounts with total outstanding loans of THB51.3bn. In 2020, it generated non-life insurance premium sales of THB4bn. Over 2016-20, NTL’s gross loans grew at 25.1% CAGR, averaging 25%+ per annum over 2017-19 before slowing down to 7% YoY growth in 2020. Its total income has grown at 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20. Although, asset quality has taken a hit owing to COVID-19 and Bank of Thailand's induced moratorium. We have covered various aspects of the deal in our earlier note, Ngern Tid Lor Pre-IPO - Pre-COVID growth track record has been very strong. In this note we’ll undertake a peer comparison.

Ngern Tid Lor Pre-IPO - Peer Comparison - Playing Catch up After Being Left Behind

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The SET50 Index is one of the very few indices that is still weighted by full market cap. Stocks need to have a minimum free float of 20% to be eligible for index inclusion but the free float is not used to determine the weight of the stock in the index.</p><p>This had led to stocks with low free floats having an inordinately high weight in the index. The most recent case in point was <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> - the stock was an inclusion in the SET50 index at the December review. DELTA is now the third largest stock in the index with a 6.07% weighting, even though the SET free float of the stock is only 22.35%. The stock has jumped 1000% over the last year.</p><p>Media reports now indicate that there are changes brewing that could result in the SET revising the calculation methodology to more accurately determine the free float of stocks, and a change to the calculation methodology of the SET50 Index that would see it move from a full market cap weighted index to a free float market cap weighted index.</p><p>In this Insight, we take a look at the stocks that would be affected by the changes and the impact of passive fund trading on the stocks.</p>

The SET50 Index is one of the very few indices that is still weighted by full market cap. Stocks need to have a minimum free float of 20% to be eligible for index inclusion but the free float is not used to determine the weight of the stock in the index.This had led to stocks with low free floats having an inordinately high weight in the index. The most recent case in point was Delta Electronics Thai (DELTA TB) - the stock was an inclusion in the SET50 index at the December review. DELTA is now the third largest stock in the index with a 6.07% weighting, even though the SET free float of the stock is only 22.35%. The stock has jumped 1000% over the last year.Media reports now indicate that there are changes brewing that could result in the SET revising the calculation methodology to more accurately determine the free float of stocks, and a change to the calculation methodology of the SET50 Index that would see it move from a full market cap weighted index to a free float market cap weighted index.In this Insight, we take a look at the stocks that would be affected by the changes and the impact of passive fund trading on the stocks.

SET50 Index: Change to Free Float Weighting In the Works?

<p>The Stock Exchange of Thailand (SET) will announce the results of the semi-annual review of the SET50 index in December and the changes will be effective from 2 January 2020. Passive funds and index arb desks will need to trade at (or by) the close on 30 December 2019.</p><p>We see a possibility of <a href="https://www.smartkarma.com/entities/vgi-pcl" target="_blank" rel="noopener" data-smartkarma-citation="entities:12409:1">VGI Global Media (VGI TB)</a> being added to the SET50 index in this review and <a href="https://www.smartkarma.com/entities/banpu-power-pcl" target="_blank" rel="noopener" data-smartkarma-citation="entities:23631:1">Banpu Power PCL (BPP TB)</a> as a possible deletion candidate.</p><p>This Insight covers the SET50 index methodology, our expected changes, historical impact on additions/deletions to the index and suggest trades for this rebalance.</p>

The Stock Exchange of Thailand (SET) will announce the results of the semi-annual review of the SET50 index in December and the changes will be effective from 2 January 2020. Passive funds and index arb desks will need to trade at (or by) the close on 30 December 2019.We see a possibility of VGI Global Media (VGI TB) being added to the SET50 index in this review and Banpu Power PCL (BPP TB) as a possible deletion candidate.This Insight covers the SET50 index methodology, our expected changes, historical impact on additions/deletions to the index and suggest trades for this rebalance.

SET50 Index Rebalance Preview - Better Early Than Late

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 initiate coverage of AUCT with a BUY rating, based on a target price of Bt11.5, which is derived from 24xPE’20E, in line with the valuation of Thailand’s consumer discretionary sector.</strong></p>
<p><strong>The story:</strong></p>
<div>•Simple business model with high margins</div>
<div>•Rising NPL rate to boost vehicle volume</div>
<div>•Auto sector still looks supportive</div>
<div>•New S curve for AUCT</div>
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<p><strong>Risks: </strong>Reliance on a few suppliers</p>
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<strong>Background:</strong> AUCT Public Company Limited (AUCT) provides services as an intermediary that conducts auctions for all types of property, as well as other auction-related services such as transportation of auctioned properties and finding bidders by coordinating with financial firms. Currently, the company has 27 storage units for auctioned property located in 26 provinces across Thailand. Moreover, it has 14 venues that can support every type of auction event.</div>

We initiate coverage of AUCT with a BUY rating, based on a target price of Bt11.5, which is derived from 24xPE’20E, in line with the valuation of Thailand’s consumer discretionary sector.
The story:
•Simple business model with high margins
•Rising NPL rate to boost vehicle volume
•Auto sector still looks supportive
•New S curve for AUCT

 

Risks: Reliance on a few suppliers

Background: AUCT Public Company Limited (AUCT) provides services as an intermediary that conducts auctions for all types of property, as well as other auction-related services such as transportation of auctioned properties and finding bidders by coordinating with financial firms. Currently, the company has 27 storage units for auctioned property located in 26 provinces across Thailand. Moreover, it has 14 venues that can support every type of auction event.

AUCT: Safe-Haven Stock in the Thai Market

Thailand

Muangthai Capital Public Company Limited operates as a commercial lending company. The Company provides car title, personal, agricultural vehicle, land title, and other loan products. Muangthai Capital serves customers in Thailand.

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Muangthai Capital (MTC TB)

Ngern Tid Lor IPO - Not Really at a Large Discount but the Overall Sector Has Been Doing Very Well

Ngern Tid Lor aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly...

Sumeet Singh

Ngern Tid Lor Pre-IPO - Peer Comparison - Playing Catch up After Being Left Behind

Ngern Tid Lor aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly...

Sumeet Singh

SET50 Index: Change to Free Float Weighting In the Works?

There is a strong possibility that the SET revises the calculation methodology to more accurately determine the free float of stocks, and changes...

Brian Freitas

SET50 Index Rebalance Preview - Better Early Than Late

The Stock Exchange of Thailand (SET) will announce the results of the semi-annual review of the SET50 index in December and the changes will be...

Brian Freitas

AUCT: Safe-Haven Stock in the Thai Market

We initiate coverage of AUCT with a BUY rating, based on a target price of Bt11.5, which is derived from 24xPE’20E, in line with the valuation of...

Pi Securities PCL, Thailand

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