‘Movers & Shakers’ on the SET for September 2

Thailand’s stock market saw a slight dip although the trading value remained high on Wednesday.

The SET Index ended the day yesterday at 1,634.48 points down 4.27 points with a total trade value of 117.68 billion baht. The market was dominated by retail investors who were net buyers of 2.38 billion baht while foreign investors were net sellers of 890 million baht and local institutional investors were net sellers of 1.78 billion baht.

Here are some of the key stocks to look out for today

The majority of the rise was due to the surge in the large market capitalized stock such as Siam Makro Plc (MAKRO) and Delta Electronics (Thailand) Plc (DELTA).

  • MAKRO
    • Maybank Kim Eng securities said that the decision by MAKRO to absorb Tesco-Lotus chain in Thailand and Malaysia (now called Lotus’s) gives MAKRO a major leg up, and could push MAKRO’s revenues to be close to 450 billion baht.
    • It will also give MAKRO (which has 138 outlets in Thailand and 7 overseas – 2 in Cambodia, 1 in China and Myanmar and 3 in India) an addition 1,967 hyper/super/mini markets and 191 “malls” in Thailand and 68 in Malaysia plus 56 “malls”.
    • It will be the largest retailer in Thailand, dominant in B2B and B2C. With the rise of its dominance, competitive landscape among basic retailers will be tougher for the 2nd largest to the smaller chain; they must reconfigure positioning to tap growth.
  • Maybank Kim Eng said that post share swap, D/E will be 0.52. Then, there will be public offering of 1,362 million shares, ~12.19% of total.
  • Assuming pricing is the same as share swap and using the funds to repay debt, the enterprise will be at 1.9x debt/EBITDA – won’t impede roll out of planned expansion.
  • CP All Plc (CPALL)
    • The operator of the 7-Eleven stores across Thailand is likely to be impacted from the sale of its stake in Lotus’s.
    • Shares of CPALL has been trading at around high.
  • Investors have come out to question the rise in the shipping stocks as ‘Baltic Dry Index’ (BDI) has dipped by 2.9% overnight to be around 4,013 points.
  • BDI which has risen by nearly 194% so far this year has been on a downward trend for the past few days and this could impact the shipping related stocks.
  • Stocks such as Precious Shipping Plc (PSL), Thoresen Thai Agencies Plc (TTA), Regional Container Plc (RCL) and others are in focus and a snapshot by Stock2morrow below shows that PSL has 36 ships and had revenues of 3.33 billion baht in the 6-months ending June 2021 while its profit was at 1.2 billion baht and its market capitalization stood at 36 billion baht. Compare this to RCL’s 6-months revenues of 15.03 billion baht, a profit of 6.13 billion baht and a market capitalization of 49.31 billion baht or a mere 36.89% higher than PSL’s market capitalization.
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  • U City Plc (U)
    • The shares of U City rose to the ceiling of 30% yesterday as investors continued to cheer the company’s plans to transform itself to being the financial arm of BTS Holding as announced by its director Kavin Kanjanapas 2 days ago.
    • Shares of U has risen by nearly 38% in the 2-days since the announcement was made.

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