Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

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SPV77 / Siri Hub Investment Digital Token: Thailand’s First Debt Token

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Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Credit

Siri Hub Investment Digital Tokens / Credit

Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY)

This research follows our first report on <a href="https://www.smartkarma.com/entities/siri-hub-investment-digital-tokens" target="_blank" data-smartkarma-citation="entities:33515:1" rel="noopener">Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY)</a> (SIRIHUB) published on 30-June ( <a href="https://www.smartkarma.com/insights/spv77-siri-hub-investment-digital-token-thailand-s-first-debt-token" target="_blank" data-smartkarma-citation="insights:53833" rel="noopener">SPV77 / Siri Hub Investment Digital Token: Thailand’s First Debt Token</a> ). We advise readers to familiarize themselves with the structure of SIRIHUB first which was laid out in our last report.XSpring Digital received an approval from Thailand’s Securities Exchange Commission (SEC) on 29-July to sell Siri Hub Investment Digital Tokens (SIRIHUB), Thailand’s first investment token. We understand Xspring has not concluded the sale yet and maintain the selling price at THB10 per token for the THB2.4bn sale. SIRIHUB-A was launched at 4.5% as per our expectation. SIRIHUB-B was launched at 8% (lower than the initial guidance of 8.25%). We attribute a lowered yield to demand for high-yielding investment in Thailand which reflects a lack of opportunities to invest outside Thailand and/or outside a traditionally low domestic yield environment. As per our opinion in the last report, we view SIRIHUB-B as a much better investment than SIRIHUB-A.We view SIRIHUB akin to 4-year 2-tier bonds issued by Siripat Four Co. Ltd. (SP4). SIRIHUB-A can be viewed as a 4%-coupon senior bond while SIRIHUB-B can be viewed as an 8%-coupon subordinated bond. Overall, we assign an UNDERWEIGHT recommendation on both SIRIHUB A and B as we believe the valuation is not compelling, compared to Sansiri’s prevalent THB bond yields. We also see the following risk elements on the token:<ul>
<li>The token has no recourse to <a href="https://www.smartkarma.com/entities/sansiri-public-co-ltd" target="_blank" data-smartkarma-citation="entities:12201:1" rel="noopener">Sansiri Public (SIRI TB)</a> (Sansiri) but the ability to pay dividends on a timely manner rests on Sansiri’s liquidity.</li>
<li>The token relies on cashflow of Siri Campus. Even though we like the potential of Siri Campus in terms of location and the up-and-coming area close to the intersection of Sukhumvit Road and Onnut Road (Soi Sukhumvit 77) area, there is no income diversification in terms of other properties where the token can draw cashflow from.</li>
</ul>All in all, we see investors buying into Thailand’s first debt token as a fare to get on the first cog railway to summit, a slow ride which will take a while to the top. It is a sightseeing trip to be the first investors rather than an investment in itself.

This research follows our first report on Siri Hub Investment Digital Tokens (SIRIHUB TB CURNCY) (SIRIHUB) published on 30-June ( SPV77 / Siri Hub Investment Digital Token: Thailand’s First Debt Token ). We advise readers to familiarize themselves with the structure of SIRIHUB first which was laid out in our last report.XSpring Digital received an approval from Thailand’s Securities Exchange Commission (SEC) on 29-July to sell Siri Hub Investment Digital Tokens (SIRIHUB), Thailand’s first investment token. We understand Xspring has not concluded the sale yet and maintain the selling price at THB10 per token for the THB2.4bn sale. SIRIHUB-A was launched at 4.5% as per our expectation. SIRIHUB-B was launched at 8% (lower than the initial guidance of 8.25%). We attribute a lowered yield to demand for high-yielding investment in Thailand which reflects a lack of opportunities to invest outside Thailand and/or outside a traditionally low domestic yield environment. As per our opinion in the last report, we view SIRIHUB-B as a much better investment than SIRIHUB-A.We view SIRIHUB akin to 4-year 2-tier bonds issued by Siripat Four Co. Ltd. (SP4). SIRIHUB-A can be viewed as a 4%-coupon senior bond while SIRIHUB-B can be viewed as an 8%-coupon subordinated bond. Overall, we assign an UNDERWEIGHT recommendation on both SIRIHUB A and B as we believe the valuation is not compelling, compared to Sansiri’s prevalent THB bond yields. We also see the following risk elements on the token:
The token has no recourse to Sansiri Public (SIRI TB) (Sansiri) but the ability to pay dividends on a timely manner rests on Sansiri’s liquidity.
The token relies on cashflow of Siri Campus. Even though we like the potential of Siri Campus in terms of location and the up-and-coming area close to the intersection of Sukhumvit Road and Onnut Road (Soi Sukhumvit 77) area, there is no income diversification in terms of other properties where the token can draw cashflow from.
All in all, we see investors buying into Thailand’s first debt token as a fare to get on the first cog railway to summit, a slow ride which will take a while to the top. It is a sightseeing trip to be the first investors rather than an investment in itself.  

Siri Hub Investment Digital Token: The Cog Railway