Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Thematic (Sector/Industry)

Our thoughts on portfolio is simple. “Lay low for the moment yo.” Sometimes, the best thing to do is nothing, and strangely that’s easier said that done. The finger gets itchy when you see stocks dropping, but it looks like they will drop even more. There are two reasons for this. As highlighted earlier in our last review, the recovery looks impressive, but it isn’t as broad-based as it seems. Most of it is externally driven, but though there may be spillover effects to other parts of the…

Our thoughts on portfolio is simple. “Lay low for the moment yo.” Sometimes, the best thing to do is nothing, and strangely that’s easier said that done. The finger gets itchy when you see stocks dropping, but it looks like they will drop even more. There are two reasons for this. As highlighted earlier in our last review, the recovery looks impressive, but it isn’t as broad-based as it seems. Most of it is externally driven, but though there may be spillover effects to other parts of the…

Thai Macro Watch (Part 2): Policy Divergence & Portfolio Thoughts

Equity Bottom-Up

The Big Picture. It’s easy to focus on the negatives and say that BTS’s earnings halved from Bt4.1bn in 2015 to Bt2bn in 2016, but the consolidated earnings were distorted by a lot of accounting issues that relates more to growing pains. BTS made numerous acquisitions and entered into several joint ventures and investments that helps to expand their growth platform, which is why revenues actually grew 37% from Bt6.3bn to Bt8.6bn during the same period. If you don’t sow seeds today, you won’t…

The Big Picture. It’s easy to focus on the negatives and say that BTS’s earnings halved from Bt4.1bn in 2015 to Bt2bn in 2016, but the consolidated earnings were distorted by a lot of accounting issues that relates more to growing pains. BTS made numerous acquisitions and entered into several joint ventures and investments that helps to expand their growth platform, which is why revenues actually grew 37% from Bt6.3bn to Bt8.6bn during the same period. If you don’t sow seeds today, you won’t…

In this review, we look at five Thai stocks (Intuch, Thaicom, BEC, BTS, TKS) from diverse backgrounds. What they have in common is headwinds from either analysts or the market, which can be reflected in their recently weak share price performance. We intend to be long-term shareholders of these stocks and are accumulating even as many continue to sell them, because we see several innate strengths in them. For example, we like that:<ul><li>Intuch provides high and stable yields during tough times and is cheap compared to underlying blue chip AIS.</li><li>Thaicom is the only satellite operator in Thailand and a global operator with dollar-priced service. The demand for bandwidth continues to rise as consumers increasingly demand higher resolution.</li><li>BEC offers low-cost (to the consumer) relatively premium product to both viewers and advertisers (on CPRP) and has one of the highest ROE in the industry.</li><li>BTS has built an ecosystem where they can generate future profits from tickets, advertising, and property, and looks likely to double in size geographically.</li><li>TKS's secret weapon, the linerless label, could save costs for manufacturers big time.</li></ul>

In this review, we look at five Thai stocks (Intuch, Thaicom, BEC, BTS, TKS) from diverse backgrounds. What they have in common is headwinds from either analysts or the market, which can be reflected in their recently weak share price performance. We intend to be long-term shareholders of these stocks and are accumulating even as many continue to sell them, because we see several innate strengths in them. For example, we like that:Intuch provides high and stable yields during tough times and is cheap compared to underlying blue chip AIS.Thaicom is the only satellite operator in Thailand and a global operator with dollar-priced service. The demand for bandwidth continues to rise as consumers increasingly demand higher resolution.BEC offers low-cost (to the consumer) relatively premium product to both viewers and advertisers (on CPRP) and has one of the highest ROE in the industry.BTS has built an ecosystem where they can generate future profits from tickets, advertising, and property, and looks likely to double in size geographically.TKS's secret weapon, the linerless label, could save costs for manufacturers big time.

Five Contrarian Stock Ideas for the Long Run

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

§  Ascendas REIT has recently replaced CapitaLand Mall Trust as Singapore's largest capitalised REIT – and has been the second-best performing REIT in the YTD with an 11.9% total return.§  The capitalisation of Singapore’s REIT Sector has almost doubled over the past five years. Singapore’s REIT Sector also maintains a competitive edge with higher average yields and lower average gearing ratios than the combined REIT Sector of Japan, Australia and Hong Kong. §  The NikkoAM - StraitsTrading Asia ex Japan REIT ETF  which is expected to include up to 70% weightage in Singapore REITs is scheduled to list on SGX on 29 March 2017. Ascendas REIT and CapitaLand Mall Trust are expected to maintain relatively large weightings in the ETF.

§  Ascendas REIT has recently replaced CapitaLand Mall Trust as Singapore's largest capitalised REIT – and has been the second-best performing REIT in the YTD with an 11.9% total return.§  The capitalisation of Singapore’s REIT Sector has almost doubled over the past five years. Singapore’s REIT Sector also maintains a competitive edge with higher average yields and lower average gearing ratios than the combined REIT Sector of Japan, Australia and Hong Kong. §  The NikkoAM - StraitsTrading Asia ex Japan REIT ETF  which is expected to include up to 70% weightage in Singapore REITs is scheduled to list on SGX on 29 March 2017. Ascendas REIT and CapitaLand Mall Trust are expected to maintain relatively large weightings in the ETF. 

Ascendas REIT Is Now Singapore's Largest Capitalised REIT

<ul>
<li>SGX’s Real Estate Developers and Operators have returned 12% YTD, outperforming the STI’s +8%. Despite the rally, the price-to-book ratio of the Sector is still trading near one standard deviation below its historical mean.</li>
<li>
Potential drivers for the Singapore property market exist on both the supply and demand front. The biggest Real Estate Developer stocks with substantial Singapore exposure include UOL Group, United Industrial Corporation, Wheelock Properties, Wing Tai Holdings and Bukit…</li>
</ul>


SGX’s Real Estate Developers and Operators have returned 12% YTD, outperforming the STI’s +8%. Despite the rally, the price-to-book ratio of the Sector is still trading near one standard deviation below its historical mean.

Potential drivers for the Singapore property market exist on both the supply and demand front. The biggest Real Estate Developer stocks with substantial Singapore exposure include UOL Group, United Industrial Corporation, Wheelock Properties, Wing Tai Holdings and Bukit…


Real Estate Sector Outperformed in the Year to Date

Thailand

MBK Public Company Limited operates property business.  The Company owns Mah Boon Krong Center building complex located in downtown Bangkok.  The complex consists of shopping malls, an office building and the Patumwan Princess Hotel. Through its subsidiaries, the Company mills and distributes rice, other grain products and operates power generation and distribution business.

Amata Corporation Public Company Limited develops industrial estates primarily served for manufacturing plants and factories. The Company acquires land and develops essential infrastructure and facilities ready for industrialized operations. Ameta also has overseas investments in Vietnam.

Supalai Public Company Limited is a property development company which has operations in Bangkok metropolis as well as other leading provincial markets. The Company develops all types of residential products, including detached houses, townhouses and condominiums.

AP Thailand PCL is a property development company. The Company develops residential property projects in Bangkok areas as well as manufactures and distributes precast concrete products.

Frasers Property (Thailand) Public Company Limited operates as a real estate developer. The Company acquires, develops, owns, and manages hotels, residential, and commercial properties. Frasers Property serves customers in Thailand.

Saha Pathana Inter-Holding PCL is a holding company for the Saha Group of companies.  The Company provides management and consulting services to its affiliated companies which operate various consumer product businesses such as apparel, cosmetics, food and daily products.  The Company also develops industrial park projects.

Quality Houses Public Company Limited is a property development company. The Company specializes in single-house, apartment, and condominium development projects.

Pruksa Holding Public Company Limited operates as a holding company. The Company, through its subsidiaries, invests in property developing and recurring income businesses. Pruksa Holding serves customers in Thailand.

Principal Capital PCL is a property development company. The Company's primary objective is to develop property projects with a focus on the Central Business District (CBD) and prime area.

SC Asset Corporation Public Company Limited develops real estate properties for sale and rental.  The Company owns and manages Shinawatra Tower III office building. Additionally, SC Asset and its subsidiaries own Shinawatra Tower I and Shinawatra Tower II office buildings, develop single house, condominium and office building projects, and provide management consultant services.

China Overseas Grand Oceans Group Ltd. is a property development and sales company. The Compnay'ss operations include the entire property development process, comprising land acquisition and investment, construction planning, design and execution, sales and marketing, after-sales service as well as property management.

HEIWA REAL ESTATE CO., LTD. develops, constructs, sells, and leases real estate properties.  The Company also provides brokerage services on residential and commercial buildings as well as maintenance services.  Heiwa Real Estate provides consulting services on real estate and develops and operates resort places and facilities.

Da-Li Development Co., Ltd. is primarily involved in outsourced construction, leasing and distribution businesses. The Company develops residential buildings, including houses, suites and parking spaces.

Fujian Start Group Co., Ltd. manufactures and markets personal computers, computer peripheral equipment, and networking products.  The Company also develops computer software.

China Dalian International Cooperation (Group) Holdings, Ltd. provides import and export services, undertakes international and domestic construction contracts, develops real estate properties, and operates deep sea fishing.  The Company also offers water transportation and international labor consulting services.

Shanghai AJ Group Co Ltd is an investment holding company.  Through its subsidiaries, the Company operates in import and export trading, trust and investment businesses, chemicals manufacturing, real estate development, building construction, as well as travel and food services.

Redco Group operates as a real estate development company. The Company develops and markets residential areas, office buildings, hotels, restaurants, and other related areas. Redco Group also provides property management and hotel operating services.

CCCG Real Estate Corporation Limited provides real estate services. The Company provides property asset management and related real estate services.

CCCG Real Estate Corporation Limited (000736 CH)

Advancetek Enterprise Co., Ltd. develops and invests in real estate properties. The Company also manufactures and markets disposable diapers as well as adult incontinence products.

TOSEI CORPORATION develops and sells residential properties and leases office facilities in central Tokyo.  The Company also invests in real estate and manages investment trust funds such as the Argo Fund.

Sansiri Public Company Limited develops real estate projects for sales and rentals.  Its projects include resort condominiums, residential and office buildings.  The Company also provides property and project management services.

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Sansiri Public (SIRI TB)

Thai Macro Watch (Part 2): Policy Divergence & Portfolio Thoughts

Our thoughts on portfolio is simple. “Lay low for the moment yo.” Sometimes, the best thing to do is nothing, and strangely that’s easier said that...

Athaporn Arayasantiparb, CFA

BTS Group: Positioning For Growth

The Big Picture. It’s easy to focus on the negatives and say that BTS’s earnings halved from Bt4.1bn in 2015 to Bt2bn in 2016, but the consolidated...

Athaporn Arayasantiparb, CFA

Five Contrarian Stock Ideas for the Long Run

In this review, we look at five Thai stocks (Intuch, Thaicom, BEC, BTS, TKS) from diverse backgrounds. What they have in common is headwinds from...

Athaporn Arayasantiparb, CFA

Ascendas REIT Is Now Singapore's Largest Capitalised REIT

§ Ascendas REIT has recently replaced CapitaLand Mall Trust as Singapore's largest capitalised REIT – and has been the second-best performing REIT...

Singapore Exchange Ltd (SGX)

Real Estate Sector Outperformed in the Year to Date

SGX’s Real Estate Developers and Operators have returned 12% YTD, outperforming the STI’s +8%. Despite the rally, the price-to-book ratio of the...

Singapore Exchange Ltd (SGX)

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