Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Thematic (Sector/Industry)

<p>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 <strong>avoiding : </strong>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).</p>

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

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

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

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Singapore Exchange Ltd (SGX)

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<table class="table table-striped"><tbody>
<tr><td><p><strong> </strong></p></td></tr>
<tr><td>
<p>§  <strong>The SGX Maritime &amp; Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in tandem with the recovery of crude oil prices, which may be an indication that the sector could be bottoming out.</strong></p>
<p><strong> </strong></p>
<p>§  <strong>Despite the rally, the 18 constituents within the SGX MOE Index are trading at an average current price-to-book (PB) ratio of 0.7x, with 10 of them trading below their book values.</strong></p>
<p><strong> </strong></p>
<p>§  <strong>Consensus estimates are expecting oil prices to stabilise and</strong>…</p>
</td></tr>
</tbody></table>


 

§  The SGX Maritime &amp; Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in tandem with the recovery of crude oil prices, which may be an indication that the sector could be bottoming out.
 
§  Despite the rally, the 18 constituents within the SGX MOE Index are trading at an average current price-to-book (PB) ratio of 0.7x, with 10 of them trading below their book values.
 
§  Consensus estimates are expecting oil prices to stabilise and…



SGX's MOE Sector Sustains 4Q16 Momentum into 2017

Equity Bottom-Up

<p>The <strong>Trivasavavet family of CK Group </strong>(or Ch Karnchang) started from really humble beginnings a generation ago but used good connections to build the country's second largest construction company. Since then, they have also diversified big time into utilities, and they now own tollways &amp; subway trains (BEM), hydro power plants in Laos (CK Power), and residential water providers like Thai Tap Water. While we prefer companies in the BSR consortium, the market has richly rewarded CK Group yo. For those who enjoyed reading Sally Denton's story on Bechtel in <em>The Profiteers </em>(US$15 on Amazon.com), here's a little something on their kindred spirit in Bangkok yo.</p>

The Trivasavavet family of CK Group (or Ch Karnchang) started from really humble beginnings a generation ago but used good connections to build the country's second largest construction company. Since then, they have also diversified big time into utilities, and they now own tollways &amp; subway trains (BEM), hydro power plants in Laos (CK Power), and residential water providers like Thai Tap Water. While we prefer companies in the BSR consortium, the market has richly rewarded CK Group yo. For those who enjoyed reading Sally Denton's story on Bechtel in The Profiteers (US$15 on Amazon.com), here's a little something on their kindred spirit in Bangkok yo.

The Little League (Ep.3): Bangkok's Bechtel

<p>According to <em>Looking Foward</em> TV program on NOW26, the Thai government approved Bt2.3trillion (US$63bn) of infrastructure projects. Many of these are mass transit projects: skytrains, subways, and monorails (similar to what we have in China and Malaysia). We call this "the Rainbow Wars", because the various train routes have different color. In most cases, BTS has emerged as the winner due to their experience and incumbent status, and this is our quick update yo:</p><table class="table table-striped"><tbody>
<tr>
<td>Stocks</td>
<td>Business</td>
<td style="text-align: center;">Shr pr (Bt/sh)</td>
<td style="text-align: center;">Mkt cap</td>
</tr>
</tbody></table>…

According to Looking Foward TV program on NOW26, the Thai government approved Bt2.3trillion (US$63bn) of infrastructure projects. Many of these are mass transit projects: skytrains, subways, and monorails (similar to what we have in China and Malaysia). We call this "the Rainbow Wars", because the various train routes have different color. In most cases, BTS has emerged as the winner due to their experience and incumbent status, and this is our quick update yo:

Stocks
Business
Shr pr (Bt/sh)
Mkt cap

…

<p>We met up with BTS management today and saw that things are clearly picking up in virtually all aspects of the business. Some key points we noted were:</p><table class="table table-striped"><tbody>
<tr>
<td>Stocks</td>
<td style="text-align: center;">Business</td>
<td style="text-align: center;">Shr pr (Bt/sh)</td>
<td style="text-align: center;">Mkt cap (US$ m)</td>
<td style="text-align: center;">PE (x)</td>
<td style="text-align: center;">Yld (%)</td>
</tr>
<tr>
<td>BTS</td>
<td style="text-align: center;">Skytrain</td>
<td style="text-align: center;">8.6</td>
<td style="text-align: center;">2,900</td>
<td style="text-align: center;">58.6</td>
<td style="text-align: center;">7.9</td>
</tr>
<tr>
<td>MACO</td>
<td style="text-align: center;">Transit media</td>
<td style="text-align: center;">1.09</td>
<td style="text-align: center;">100</td>
<td style="text-align: center;">22.9</td>
<td style="text-align: center;">3.3</td>
</tr>
</tbody></table><ul><li>
<strong>Strong 33% growth in media revenues </strong>following the acquisition of MACO or Master Ad. Right now, you will notice that media accounts for an even bigger portion of revenues than transport, which was not the case in the last quarter. In…</li></ul>

We met up with BTS management today and saw that things are clearly picking up in virtually all aspects of the business. Some key points we noted were:

Stocks
Business
Shr pr (Bt/sh)
Mkt cap (US$ m)
PE (x)
Yld (%)


BTS
Skytrain
8.6
2,900
58.6
7.9


MACO
Transit media
1.09
100
22.9
3.3


Strong 33% growth in media revenues following the acquisition of MACO or Master Ad. Right now, you will notice that media accounts for an even bigger portion of revenues than transport, which was not the case in the last quarter. In…

Thailand

Sino Thai Engineering & Construction Public Company Limited provides engineering and construction services to the public and private sectors.  The Company's activities include energy project construction, building construction, industrial plant construction, environment project construction, as well as transportation project and infrastructure construction.

Sino-Thai Engineering & Construction (STEC TB)

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Sino-Thai Engineering & Construction (STEC TB)

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

SGX's MOE Sector Sustains 4Q16 Momentum into 2017

§ The SGX Maritime & Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in...

Singapore Exchange Ltd (SGX)

The Little League (Ep.3): Bangkok's Bechtel

The Trivasavavet family of CK Group (or Ch Karnchang) started from really humble beginnings a generation ago but used good connections to build the...

Athaporn Arayasantiparb, CFA

The Rainbow Wars: BTS Vs BEM (Round 2)

According to Looking Foward TV program on NOW26, the Thai government approved Bt2.3trillion (US$63bn) of infrastructure projects. Many of these are...

Athaporn Arayasantiparb, CFA

BTS: All Engines Firing

We met up with BTS management today and saw that things are clearly picking up in virtually all aspects of the business. Some key points we noted...

Athaporn Arayasantiparb, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)