Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

Kerry Express Thailand / Equity Capital Markets

In an updated filing, <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> indicated it could sell as many as 300 mn new shares in its planned IPO. Many media reports have suggested the company hopes to raise about US$300 mn in the offering, suggesting KEX will come to market at around 30 baht per share.In this note, we try to answer the following questions regarding KEX's valuation:<ul>
<li>What are the most useful 'comps' for KEX? </li>
<li>What are some appropriate valuation multiples to use in comparing KEX to peers?</li>
<li>How does KEX's valuation at 30 baht per share compare to the peer group we've identified?</li>
<li>What factors could support either a premium or discount valuation for KEX versus peers?</li>
</ul>At 30 baht per share (which implies market capitalization of US$1.7 bn), KEX would not be overvalued relative to peers, in our view, and there are reasons KEX could eventually demand a premium valuation relative to other express companies.

In an updated filing, Kerry Express Thailand (KEX TB) indicated it could sell as many as 300 mn new shares in its planned IPO. Many media reports have suggested the company hopes to raise about US$300 mn in the offering, suggesting KEX will come to market at around 30 baht per share.In this note, we try to answer the following questions regarding KEX's valuation:
What are the most useful 'comps' for KEX? 
What are some appropriate valuation multiples to use in comparing KEX to peers?
How does KEX's valuation at 30 baht per share compare to the peer group we've identified?
What factors could support either a premium or discount valuation for KEX versus peers?
At 30 baht per share (which implies market capitalization of US$1.7 bn), KEX would not be overvalued relative to peers, in our view, and there are reasons KEX could eventually demand a premium valuation relative to other express companies.

Kerry Express Thailand (KEX) IPO: Approach to Valuation

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).

Thematic (Sector/Industry)

This is something of a collaborative piece between MCorp Review and <a href="https://www.smartkarma.com/profiles/1646" target="_blank" data-smartkarma-citation="accounts:1646">Victor Wai, CFA</a>, a Drewry ports specialist who flew into Bangkok to discuss some issues regarding the Kra Canal, which we attack from different angles ranging from politics, historical parallels, to economic viability. While we can not agree on all aspects yet, there are certain "near consensus" or "quasi-conclusions" on some issues yo. Well, heck, let's just dig in. Our Dark Side is taking over again, and we can't help feel…

This is something of a collaborative piece between MCorp Review and Victor Wai, CFA, a Drewry ports specialist who flew into Bangkok to discuss some issues regarding the Kra Canal, which we attack from different angles ranging from politics, historical parallels, to economic viability. While we can not agree on all aspects yet, there are certain "near consensus" or "quasi-conclusions" on some issues yo. Well, heck, let's just dig in. Our Dark Side is taking over again, and we can't help feel…

South Series (Part 4): Kra Canal, A Chinese Suez Smacked Two Days North of Singapore?!

Equity Bottom-Up

To be fair, this may not be proper stalking, because we never really looked at PORT (Saha Thai Terminal) prior to their IPO, but we learnt that they only IPO'd recently and the stock has already shot up almost 60% from its IPO price of just Bt4.5/sh. That's better than the average IPO, which returned about 30% this year. While this stock is no longer cheap, it's interesting to delve down into what these guys actually do and why people are so interested in them in the first place. Just as…

To be fair, this may not be proper stalking, because we never really looked at PORT (Saha Thai Terminal) prior to their IPO, but we learnt that they only IPO'd recently and the stock has already shot up almost 60% from its IPO price of just Bt4.5/sh. That's better than the average IPO, which returned about 30% this year. While this stock is no longer cheap, it's interesting to delve down into what these guys actually do and why people are so interested in them in the first place. Just as…

IPO Stalker: PORT, The Merchant of Venice (Of the East)

We had the chance to meet up with Khaleed Hasheem, founder of PSL (one of Thailand's three big shippers), this week and catch up on some of his ideas on the Asian shipping outlook. PSL currently has a fleet of 36 ships. The only guys bigger than this would be TTA of the Mahagitsiri fortune ( <a href="https://www.smartkarma.com/insights/hidden-tigers-season-premiere-chocolate-ship-donuts" target="_blank" data-smartkarma-citation="insights:9781">Hidden Tigers (Season Premiere): Chocolate Ship Donuts</a>) and <a href="https://www.smartkarma.com/entities/11430" target="_blank" data-smartkarma-citation="entities:11430:1">Regional Container Line Pcl (RCL TB)</a> yo. After listening to Khaleed, my sense is I'd rather buy a coal producer like Banpu, which we already own…

We had the chance to meet up with Khaleed Hasheem, founder of PSL (one of Thailand's three big shippers), this week and catch up on some of his ideas on the Asian shipping outlook. PSL currently has a fleet of 36 ships. The only guys bigger than this would be TTA of the Mahagitsiri fortune ( Hidden Tigers (Season Premiere): Chocolate Ship Donuts) and Regional Container Line Pcl (RCL TB) yo. After listening to Khaleed, my sense is I'd rather buy a coal producer like Banpu, which we already own…

Over the past 20 years, Thailand faced two financial crisis, namely Tom Yum Goong in 1997 and Lehman in 2008. Discounting the political nonsense that is just part of life down here, we think there are five important lessons to take away, regarding: 1) the importance of investors; 2) liabilities-cash flow matching; 3) sticking to core competencies as well as avoiding : 4) currency pegs to dollars (or any currency); and 5) capital controls. No event in Thai business history has transformed the landscape more than the 1997 crisis. In this review, we highlight a few anecdotes of those who survived and those who didn't (at least not in their original forms).

Over the past 20 years, Thailand faced two financial crisis, namely Tom Yum Goong in 1997 and Lehman in 2008. Discounting the political nonsense that is just part of life down here, we think there are five important lessons to take away, regarding: 1) the importance of investors; 2) liabilities-cash flow matching; 3) sticking to core competencies as well as avoiding : 4) currency pegs to dollars (or any currency); and 5) capital controls. No event in Thai business history has transformed the landscape more than the 1997 crisis. In this review, we highlight a few anecdotes of those who survived and those who didn't (at least not in their original forms).

Five Biggest Lessons from Thai Financial Crisis

Thailand

Precious Shipping Public Company Limited is a ship owner providing regional marine shipping services. The Company operates in the tramp freight market sector where its vessels are employed on a time charter as well as voyage charter basis.  Precious Shipping has a network of shipping agents worldwide.

Thoresen Thai Agencies PCL is a maritime and commodity-focused business group with Transport, Energy, and Infrastructure businesses in the Asia-Pacific region. The Group's businesses include dry bulk shipping, inter-island petroleum and gas tankering, offshore oil and gas services, coal mining, fertilizer production and distribution, and integrated port and logistics services.

Asia Aviation PCL owns a budget airline.  The airline offers low fare flights, online booking, hospitality packages, and courier and cargo services. Asia Aviation serves travelers throughout Asia, the Middle East, and Europe.

Jutha Maritime Public Company Limited operates freight transportation services. The Company provides cargo shipping services on the route between Thailand-Japan-South Korea-Thailand, and Thailand-Malaysia-Japan-South Korea-Thailand.  Its vessels can also be employed on a tramp basis with no fixed route or timetable.

BTS Rail Mass Transit Growth Infrastructure Fund is a closed-end fund incorporated in Thailand. The Fund's objective is to achieve income. The Fund invests in the Core BTS Sky Train System from BTSC, which includes the Core Sukhumvit Line & the Core Silom Line.

BTS Rail Mass Transit Growth I (BTSGIF TB)

JWD Infologistics PCL is an information technology company. The Company focuses on maximizing the benefits of managing supply chains and fully integrated logistics solutions. JWD Infologistics operates in Southeast Asia

Bangkok Aviation Fuel Services Public Company Limited is provider of aviation fuel services including aviation depot and aircraft refueling services at the Bangkok International Airport (Donmuang) and the New Bangkok International Airport at Suvarnabhumi.

Thai Airways International Public Company Limited is Thailand's national airline providing air transportation, freight and mail services on domestic and international routes including Asia, Europe, North America, Africa and South West Pacific.  The Company is a state enterprise which is controlled by the government and partly owned by the public.

Namyong Terminal PCL is a roll on roll off terminal operator. The Company offers terminal services, car storage areas and warehousing services in Thailand.

Nok Airlines PCL operates as an airline carrier in the aviation industry. The Company provides air transportation services for passengers, baggage, and cargo.

Korea Line Corporation (KLC) owns and operates a fleet of vessels that carry bulk cargo, such as iron core, coal, hot coils, and liquefied natural gas (LNG). The Company provides exclusive lines for Pohang Iron & Steel, Korea Gas, and Korea Electric under long term contracts.  KLC also offers tramp services, and transports grain, sugar, logs, minerals, and steel products.

PT Pelayaran Tempuran Emas Tbk provides sea transportation services. The company has network of branches and agents throughout Indonesia and Singapore. Pelayaran Tempuran Emas also offers logistic supports for cargo movements.

Bohai Ferry Company Limited is a passenger liner transportation enterprise. The Company mainly operates passenger vessel transport for the Yantai-Dalian and Penglai-Dalian sea routes.

Safe Bulkers Inc. is an international provider of marine drybulk transportation services transporting bulk cargoes particularly grain, iron ore, and coal. The Company has a fleet of panamax, kamsarmax, and post-panamax class vessels.

2GO Group, Inc., together with its subsidiaries, provides shipping and logistics services in the Philippines and internationally. It engages in the domestic and international delivery of documents and parcels, money remittances, cash, certificate and visas, pouches and boxes, full container and loose cargo, and supply chain services; and warehousing and distribution, asset maintenance, and relocation services. The company also provides project management and consultancy services, such as transportation of heavy and bulk-sized equipment; and logistics services, such as ambient and temperature controlled distribution centers, forward stock locations, ambient and temperature controlled cross-docking, domestic freight forwarding and land transport, bundling and kitting, control tower solutions, and logistics solutions design and consultancy services. In addition, it provides passenger travel services; and operates ferry vessels. Further, the company offers international and domestic air and sea freight forwarding services, cargo consolidation, dangerous goods handling, customs brokerage, and building and exhibition logistics; and FMCG trading and distribution, food servicing, and catering services, as well as liquid transport services. Additionally, it provides manpower, security, trucking, forwarding services, water barging, tugboat assistance, and arrastre and stevedoring services. The company operates a fleet of 23 passenger and freight vessels. It also operates 15,000 containers, 35 cross-dock warehouses, 550 trucks, 1,200 trailers, 250 motorcycles, 70,000 square meters of distribution center operations, and approximately 185 branches and outlets. The company formerly known as ATS Consolidated (ATSC), Inc. and changed its name to 2GO Group, Inc. in March 2012. The company was founded in 1949 and is headquartered in Manila, the Philippines.

MMA Offshore Limited provides diversified marine services. The Company operates mainly in the Dampier and North West Shelf in Western Australia and also in the Northern Territory. MMA Offshore operates crew vessel charters, vessel manning, management and logistics along with operating supply base facilities.

Ningbo Marine Co., Ltd. provides freight transportation on the inland waters, as well as between the ports of Ningbo and Southeast Asian countries and Japan. The Company also invests in the transportation facility construction business and processes steel product.

Eagle Bulk Shipping Inc. owns a fleet of dry bulk vessels and transports a range of major and minor bulk cargoes.  The Company transports iron ore, coal, grain, cement, and fertilizer along worldwide shipping routes.

Taiwan Navigation Co., Ltd. provides marine transportation services.

Sincere Navigation Corporation is a major international shipping company listed on the Taiwan Stock Exchange and based in Taipei, Taiwan. The company is one of the largest dry bulk shipping company in Taiwan. Founded more than 40 years ago, the company endured volatile industry conditions, owns and operates a fleet of vessels. An experienced management team continues to contribute to its strong operational growth. Based upon this solid foundation, we hope to continue to develop the company’s operations and work towards a prosperous future.

Regional Container Lines Public Company Limited provides ocean freight transportation services. The Company owns and operates a fleet of container vessels covering more than 70 destinations in Asia, Australia, and the Middle East.

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Regional Container Line (RCL TB)

Kerry Express Thailand (KEX) IPO: Approach to Valuation

What's the right valuation approach to Kerry Express (KEX), which hopes to complete its IPO in Thailand in the coming weeks?

Tracking Traffic

South Series (Part 4): Kra Canal, A Chinese Suez Smacked Two Days North of Singapore?!

This is something of a collaborative piece between MCorp Review and Victor Wai, CFA, a Drewry ports specialist who flew into Bangkok to discuss...

Athaporn Arayasantiparb, CFA

IPO Stalker: PORT, The Merchant of Venice (Of the East)

To be fair, this may not be proper stalking, because we never really looked at PORT (Saha Thai Terminal) prior to their IPO, but we learnt that...

Athaporn Arayasantiparb, CFA

The View Through a Shipper's Lens & More

We had the chance to meet up with Khaleed Hasheem, founder of PSL (one of Thailand's three big shippers), this week and catch up on some of his...

Athaporn Arayasantiparb, CFA

Five Biggest Lessons from Thai Financial Crisis

Over the past 20 years, Thailand faced two financial crisis, namely Tom Yum Goong in 1997 and Lehman in 2008. Discounting the political nonsense...

Athaporn Arayasantiparb, CFA

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52-week Range

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