“SINGHA”…a Sick Lion…!?

People always think that “Singha Group” is only a well-known Thai beverage producer of both alcoholic and non-alcoholic drinks…but Singha actually has expanded its business unit to operate in investment and real estate development under the company and REIT namely Singha Estate Public Company Limited (S), S Hotels and Resorts Public Company Limited (SHR) and S Prime Growth Leasehold Real Estate Investment Trust (SPRIME)

There wasn’t any significant impact from Covid-19 outbreak on the food and beverage business unit, but for the investment and real estate business sector, it could be said that in a coma stage.

The core profit of S in the second quarter of 2020 collapsed from a net profit of 150 million baht a year earlier to a loss of 620 million baht. Total revenue shrank 61% YoY to 927 million baht. The major drivers of such decline were 51% drop in revenue from sales of house and condominium due to the delay in ownership transfer of some group of customers and 71% decline in revenue from rental and services as temporary suspension of hotel operation during lockdowns.

For the first half of 2020, S reported a net loss of 322 million baht compared to a profit of 419 million baht in the same period of last year.

SHR‘s operating result was even worse…the company recorded a further loss of 810 million baht in 2Q20 from a loss of 156 million baht in 2Q19. For the first six-month, a loss was 575 million baht, higher from a loss of 201 million in the same period of last year, as a result of the temporary suspension of its hotel operation worldwide.

What a poor Singha…

SPRIME seems to have the best outlook among 3 companies as the trust still posted a net profit of 105 million baht compared to a profit of 76 million baht a year ago. The profit for the first half of 2020 was 201 million baht increased from 136 million in a year earlier.  

S has been listed on SET since 2014 and its background is quite interesting. S indirectly entered the stock market through the backdoor listing of Rasa Property Development Public Company Limited (RASA), after that, the company began to purchase the assets of “Bhirombhakdi” and further develop and invest in real estate development business. 

Since then S has been growing up strongly until this year…no new development project reported…low sales volume of existing projects…and a collapse in consolidated statements.

SHR, which just listed on the SET in November 2019, also entered the stock market through special conditions and surprised the investors for a while.

After listing on the stock exchange, SHR has utilized the capital increase by purchasing the assets (hotel group) from “Bhirombhakdi” in order to increase its value to meet the IPO regulations. 

Accidentally, there happened a Covid-19 pandemic during the process of purchasing the assets, thus SHR was severely affected. 

Meanwhile the share prices of S and SHR as well decline dramatically…from the beginning of this year till now, S’s share price has fallen 43% to trade below ฿2/share, losing its market cap of more than 7,000 million baht. 

SHR remains lower than its IPO of ฿5.20/share. The current price has dropped from the beginning of this year nearly 40%, losing its market cap of more than 4,000 million baht. 

Well…will the lion turn to a little kitten…???