BGC: Uncertainty over M&A Deal Remain Overhang Until AGM in April

BGC: Aim to Be “Total Packaging Solution’’

ORI: Expect Flat 3Q20 Earnings but Strong Recovery in 4Q20

BGC: Re-Opening the Cities Will Drive 2H20 Performance

AUCT: Raising Commission Fee Will Boost 2H20 Performance

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

BG Container Glass PCL / Equity Bottom-Up

BGC announced the Stock Exchange of Thailand on 15th October to acquire the three companies with an investment cost of Bt4bn.<ul>
<li>This deal will be paid by Right Offering (Bt2.5bn) and banking loan (Bt1.5bn). However, we expect three acquired companies continued to make loss in the next twelve months, there is no accretive value to BGC.</li>
<li>The deal is needed to be approved from the shareholder’s meetings on 15th Dec 2020. Meanwhile, the major shareholder ‘Bangkok Glass’ (owned 72% of BGC) are unable to make vote.</li>
<li>Under our base case scenario (see. Case No.4 on the back page (1) shareholders approve capital raising (2) new three company continue to make equal loss in 2021 as occurred in 2019 and (3) 4% interest rate for  banking loan.), we expect 55% dilution effect  to our EPS’21E forecast and 52% to our existing target price of Bt11.5.</li>
</ul>We downgrade our rating  for BGC from BUY to HOLD. As this deal is not finalized yet, we will revise our target price after analysts’ meeting on 17 November 2020.

BGC announced the Stock Exchange of Thailand on 15th October to acquire the three companies with an investment cost of Bt4bn.
This deal will be paid by Right Offering (Bt2.5bn) and banking loan (Bt1.5bn). However, we expect three acquired companies continued to make loss in the next twelve months, there is no accretive value to BGC.
The deal is needed to be approved from the shareholder’s meetings on 15th Dec 2020. Meanwhile, the major shareholder ‘Bangkok Glass’ (owned 72% of BGC) are unable to make vote.
Under our base case scenario (see. Case No.4 on the back page (1) shareholders approve capital raising (2) new three company continue to make equal loss in 2021 as occurred in 2019 and (3) 4% interest rate for  banking loan.), we expect 55% dilution effect  to our EPS’21E forecast and 52% to our existing target price of Bt11.5.
We downgrade our rating  for BGC from BUY to HOLD. As this deal is not finalized yet, we will revise our target price after analysts’ meeting on 17 November 2020.

BGC: Negative View for the Acquisition of the Three Companies