Thailand

• Thai Life Insurance (TLI) is looking to raise up to US$975m in its upcoming Thailand IPO. Cornerstone investors including GIC have taken up around 54% of the deal.
• Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
• In this note we will talk about the deal dynamics and run the deal through our ECM framework.

• Thai Life Insurance (TLI TB) will open its book for a US$1 billion raise from 29 June to 14 July. The IPO price has been set at THB16.00 per share.
• We previously discussed the IPO in Thai Life Insurance IPO: The Bull Case and Thai Life Insurance IPO: The Bear Case. 
• Peer analysis suggests that Thai Life should trade at a modest premium to Bangkok Life but at a material discount to AIA. Consequently, the IPO valuation is full. 

• Thai Life Insurance is looking to raise up to US$1bn in its upcoming Thailand IPO.
• Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
• In this note, we will talk about valuations and undertake a peer comparison versus its international peers.

• According to local media, Thailand’s Central Administrative Court has dismissed a petition seeking to overturn a 2018 NBTC regulation that allowed mergers to take place without requiring the regulator’s approval.
• Reportedly the Court ruled earlier this month that the enforcement of this regulation was lawful; and that the DTAC/True merger would not cause unrecoverable damage to the telecom sector.
• Both DTAC and True gained on the news. A merger now appears increasingly more likely; although conditions may still be imposed to protect consumers. 

• ACommerce Group (ACOM TB) is looking to raise about US$200m in its upcoming Thailand IPO. 
• ACommerce is an ecommerce enabler providing end-to-end and ala carte ecommerce solutions for brands in Southeast Asia (SEA). 
• In this note, we will discuss aCommerce’s updates since our last note.

• Maintain BUY for KKP with a target price of Bt82.00. We like its steady net profit growth, resilient fundamentals, and high dividend yield, expected at 5.3-6.6% for 2022-24.
• Strong 2Q22 net profit to rise YoY : We expect Kiatnakin Phatra (KKP) to post a net profit of Bt1.9b in 2Q22, up 39% YoY (-9% QoQ). 
• Lending growth in 2Q22 will likely continue to be strong at 4.2% QoQ (1Q22: +6.5% QoQ), largely due to higher demand from vehicle hire purchase and mortgage lending. 

• Thai Life Insurance is looking to raise up to US$1bn in its upcoming Thailand IPO.
• Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
• In this note, we will talk about the industry dynamics and undertake a peer comparison versus its domestic peers.

• Press reports (here and here) suggest that Administrative Court has ruled out the request to suspend the DTAC/True merger and that the regulation which repeals NBTC’s veto rights is lawful.
• This development suggests that the NBTC will apply remedial conditions rather than block the merger. The timeline for the satisfaction of VTO conditions is from late June to early August. 
• With the Court ruling increasing the probability of a successful merger, it is attractive to buy the current share price ratio of 9.698x vs the implied swap ratio of 10.221x.

• Bangkok Life Assurance (BLA), JMT Network Services (JMT) and Jaymart (JMART) will replace Com7 (COM7), Ratch Group (RATCH) and Sri Trang Gloves (STGT) in the SET50 INDEX.
• Estimated one-way turnover is 2.1% and will result in a one-way trade of THB 1,914m. There is little funding flow on the other index stocks.
• The inclusion of Bangkok Life Assurance (BLA TB) is a minor surprise. The deletion of Com7 PCL (COM7 TB) is a much bigger surprise.

• Strong 2Q22E profit likely on low costs
• Expect 2Q22E core profit of THB1.0b (+20% QoQ)
• Weak revenue due to suppressed purchasing power
• Reiterate BUY; cancellation of merger is a key risk

• Thai Life Insurance (124744Z TB) has started to meet investors ahead of its $1 billion IPO. The roadshow will run till early July with a listing targeted later in July.
• In Thai Life Insurance IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case. 
• The key elements of the bear case rest on market share pressure, tepid total premium performance, a checkered record in sales channel diversification, stagnating agent growth and inconsistent agent productivity.

• Thai Life Insurance (124744Z TB) has started to meet investors ahead of its $1 billion IPO. The roadshow will run till early July with a listing targeted later in July.
• Thai Life is the third-largest life insurer in Thailand with a 12.9% market share as measured by gross premium income in 1Q22.
• The key elements of the bull case rest on a strong brand, the largest agent network, return to APE growth, high persistency ratio and improving VONB margin.

• Thai Life Insurance (124744Z TB) is looking to raise US$1bn in its IPO by selling up to 2.207bn shares. This will value the company at around US$5.18bn.
• Inclusion in the SET50 INDEX will depend on the float exceeding 20% and a rally that leads to its market cap exceeding 1% of the SET INDEX market cap.
• Fast Entry to the MSCI Thailand and FTSE All-World indices is not likely. MSCI inclusion could take place at the November SAIR and FTSE inclusion at the December QIR.

• Maintain BUY for TISCO with a target price of Bt106.00. We like its high dividend yield, expected at 8.4-9.3%for 2022-24.We maintain a moderate net profit growth of 6%CAGR for 2022-24. 
• A mixed picture in 2Q22 We expect Tisco Financial Group (TISCO) to post a net profit of Bt1.74b in 2Q22, up 4.5% yoy (-3.1% qoq). The yoy rise will largely 
• Lending growth in 2Q22 is likely to continue rising by 0.4% QoQ (1Q22: +0.4% QoQ), given elevated demand from corporate and SME lending despite muted new auto HP lending. 

• U/G to BUY from Hold
• Sales projected to hit record high in 2Q22
• Earnings to remain solid despite GPM pressure
• Promising 2H22E outlook

We upgrade SNNP to BUY from Hold after the share price corrected by 18% since 3 May when we deemed it to be fully valued. Sales momentum remains positive underpinned by greater mobility post-Covid and the successful launch of new products. Cost inflation and labour constraints may put pressure on GPM but solid top-line growth should buoy earnings growth. We believe the recent share price dip offers a buying opportunity, with 23% upside to our DCF-TP of THB18.80 (WACC 7.3% and G.3%).

• The medium to long-term outlook looks promising,thanks to high demand for energy drinks across Asia-Pacific owing to trend of urbanization and rising disposable income. Meanwhile, 2H22 earnings are confirmed recovery 
• More room to expand in Asia-Pacific Mordor Intelligence projected the Asia-Pacific energy drinks market value, which is the CBG key market focus to increase 8.46%CAGR in 2022-2027
• China market (4% of total revenue in 2021) is one of the CBG’s key market given the largest size of energy drinks market in Asia-Pacific with plenty of opportunity