Pan-Asia Equity Bottom-up, Wickhams Hill

Lloyd Moffatt

I am a fundamental-value investment analyst with a bent for events and soft catalysts.

During my time on both the buy-side and sell-side I focussed on small and mid-cap companies in ASEAN, Australia and HK/China.

Although a generalist, my background as an engineer lends itself toward deep-dive research in more practical sectors like consumer and industrials.

Previous recommendations include:

Concepcion Industrial		(CIC PM)	BUY	03/12/2015		+100.1%
OSIM International		(OSIM SP)	BUY	11/12/2015		+36.9%
Bellamy's Australia Ltd	(BAL AU)	SELL	08/06/2016		+60%
Pryce Corp				(PPC PM)	BUY	14/07/2016		+105%
Rukun Raharja			(RAJA IJ)	BUY	16/02/2017		+61%
Asian Pay Television Trust (APTT SP)	BUY	30/12/2016		+67%

Pan-Asia Equity Bottom-up

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Research-Intensive Fundamental Value Advisor

Wickhams Hill

Wickhams Hill Capital is a research-intensive fundamental value advisor, on long and occasionally short investment opportunities concentrated in small and mid-cap public companies.

Equity Bottom-Up

<p>Pryce Corporation (“Pryce”) is a PSE listed company based in the Philippines which engages in sales and distribution of LPG and industrial gases, and development of memorial parks (cemeteries).</p><p>We believe that:</p><ol><li>Pryce has built a portfolio of strategically valuable terminals and refilling stations across the Southern Philippines that underpins a stable and highly profitable bottled LPG distribution business;</li><li>Their major terminal and distribution network in North Luzon places Pryce as one of the players driving consolidation of the independent distributors that are undermining profitability in the region. We estimate this could improve overall operating profit by 75-100%;</li><li>Despite Pryce Gases contributing almost all of the group’s operating income, the value of the company’s memorial parks (real estate) assets is completely unappreciated by the market. Currently, that, along with a large net cash position is weighing down the balance sheet; and,</li><li>Trading at just 10x FY17e and growing earnings at 35% CAGR, in various scenarios, where the gas business is valued in line with peers and the property business is spun-off or sold, there is still 100-200% upside remaining.</li></ol>

Pryce Corporation (“Pryce”) is a PSE listed company based in the Philippines which engages in sales and distribution of LPG and industrial gases, and development of memorial parks (cemeteries).We believe that:Pryce has built a portfolio of strategically valuable terminals and refilling stations across the Southern Philippines that underpins a stable and highly profitable bottled LPG distribution business;Their major terminal and distribution network in North Luzon places Pryce as one of the players driving consolidation of the independent distributors that are undermining profitability in the region. We estimate this could improve overall operating profit by 75-100%;Despite Pryce Gases contributing almost all of the group’s operating income, the value of the company’s memorial parks (real estate) assets is completely unappreciated by the market. Currently, that, along with a large net cash position is weighing down the balance sheet; and,Trading at just 10x FY17e and growing earnings at 35% CAGR, in various scenarios, where the gas business is valued in line with peers and the property business is spun-off or sold, there is still 100-200% upside remaining.

DEEP DIVE: Riding the Second Wave in Pryce Corp for Another 146% Upside