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).

Equity Capital Markets

PTT Oil & Retail Business  / Equity Capital Markets

We value PTTOR at Bt15.5/sh using sum-of-parts method.<ul>
<li>Note that the lion's share (63%) of its EV is attributed to the low-margin gas station business, we are more excited about the non-oil business (30% of EV), which incorporates Amazon Cafe and 7-11 revenue sharing, amongst others.</li>
<li>Investing in a post-COVID IPO can be tricky. Even if the company looks really interesting in the long run, it could be easier to wait for the share prices to fall (given the shaky markets) and pick it up on the cheap at a time like this.</li>
<li>Apart from the competitive risks already highlighted in the first part, we also highlight other key risks here, such as: 1) epidemic and sanitation; 2) saturation; 3) gas station obsolescence; 4) reduced vehicle traffic; 5) dependence on PTT Group; and 6) risks associated with foreign currency and operations.</li>
</ul>

We value PTTOR at Bt15.5/sh using sum-of-parts method.
Note that the lion's share (63%) of its EV is attributed to the low-margin gas station business, we are more excited about the non-oil business (30% of EV), which incorporates Amazon Cafe and 7-11 revenue sharing, amongst others.
Investing in a post-COVID IPO can be tricky. Even if the company looks really interesting in the long run, it could be easier to wait for the share prices to fall (given the shaky markets) and pick it up on the cheap at a time like this.
Apart from the competitive risks already highlighted in the first part, we also highlight other key risks here, such as: 1) epidemic and sanitation; 2) saturation; 3) gas station obsolescence; 4) reduced vehicle traffic; 5) dependence on PTT Group; and 6) risks associated with foreign currency and operations.


IPO Radar: PTTOR (Part 2), Valuation and Risks

Despite the choppy markets, PTTOR has announced what is likely the second largest IPO in 2020 after Central Retail (Date still unconfirmed). In the first half of this two-part series, we learn what the company is really about: <ul>
<li>
Components. PTTOR consist of four main businesses, namely: 1) gas stations or 'oil' business; 2) the non-oil business in Thailand; 3) the foreign business in Philippines, Cambodia, and Laos, which largely replicates the Thai one on a smaller scale; and 4) lubricant business. In addition, they will hold a minority stake in BAFS (7.06%), a separately listed aircraft fueling business, and Thappline (40.53%), a joint venture for petroleum pipelines with other oil majors.</li>
<li>
Spotlight on 'non-oil' segment. The most interesting part of the company includes revenues from 7-Eleven stores in gas stations and also runs Amazon Cafe, the country's largest coffee chain, which is still expanding. In addition, they have much smaller restaurant chains, Texas Chicken and Hua Seng Hong, and even a auto service business (Fit Auto).</li>
<li>
IPO. Good for 3bn shares (of which 300m will be greenshoe) or 25% of the company, the listing will be advised by five underwriters (Bualuang, Finansia, KSec, Phatra, and Tisco).</li>
<li>
Competition. PTT is neck to neck with the upcountry gas station operator PTG. Amazon Cafe dominates the crowded coffee field, outselling global titan Starbucks in Thailand and other rivals (True Coffee, Coffee World, Inthanin, etc). Texas Chicken is an also-ran in a field clearly dominated by KFC. Hua Seng Hong operates in the highly fragmented Chinese restaurant segment.</li>
</ul>

Despite the choppy markets, PTTOR has announced what is likely the second largest IPO in 2020 after Central Retail (Date still unconfirmed). In the first half of this two-part series, we learn what the company is really about: 

Components. PTTOR consist of four main businesses, namely: 1) gas stations or 'oil' business; 2) the non-oil business in Thailand; 3) the foreign business in Philippines, Cambodia, and Laos, which largely replicates the Thai one on a smaller scale; and 4) lubricant business. In addition, they will hold a minority stake in BAFS (7.06%), a separately listed aircraft fueling business, and Thappline (40.53%), a joint venture for petroleum pipelines with other oil majors.

Spotlight on 'non-oil' segment. The most interesting part of the company includes revenues from 7-Eleven stores in gas stations and also runs Amazon Cafe, the country's largest coffee chain, which is still expanding. In addition, they have much smaller restaurant chains, Texas Chicken and Hua Seng Hong, and even a auto service business (Fit Auto).

IPO. Good for 3bn shares (of which 300m will be greenshoe) or 25% of the company, the listing will be advised by five underwriters (Bualuang, Finansia, KSec, Phatra, and Tisco).

Competition. PTT is neck to neck with the upcountry gas station operator PTG. Amazon Cafe dominates the crowded coffee field, outselling global titan Starbucks in Thailand and other rivals (True Coffee, Coffee World, Inthanin, etc). Texas Chicken is an also-ran in a field clearly dominated by KFC. Hua Seng Hong operates in the highly fragmented Chinese restaurant segment.


IPO Radar: PTTOR (Part I), A Gas Station Operator Behind Amazon Coffee

Thailand

PTT Oil and Retail Business Public Company Limited distributes petroleum products. The Company offers oil, gas, fuels, LPG, lubricants, and other related items. PTT Oil and Retail Business serves customers in Thailand.

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PTT Oil & Retail Business (OR TB)

IPO Radar: PTTOR (Part 2), Valuation and Risks

We value PTTOR at Bt15.5/sh using sum-of-parts method. Note that the lion's share (63%) of its EV is attributed to the low-margin gas station...

Athaporn Arayasantiparb, CFA

IPO Radar: PTTOR (Part I), A Gas Station Operator Behind Amazon Coffee

Despite the choppy markets, PTTOR has announced what is likely the second largest IPO in 2020 after Central Retail (Date still unconfirmed). In the...

Athaporn Arayasantiparb, CFA

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