SAMART: the Disposal of OTO

After missing from investors’ eyes for a while, Samart Corporation Public Company Limited (SAMART) has finally backed in the spotlight following the resolution of the Board of Directors’ to dispose of shares of One to One Contacts Public Company Limited (OTO).

 

SAMART and its subsidiary Samart Engineering Company Limited (SE) will dispose of 191.6 million shares and 2.1 million shares, respectively, a total of 193,700,000 shares or equivalent to 69.18% of total paid-up shares of OTO to 3 investors including Mr.Boon-aue Chitthanom, Mr.Suthipoj Ariyasuthiwong and Mr.Nattapong Seetavorarat at a price of 2.40 Baht per share with total value of 464.88 million Baht.

 

In 2016, OTO’s net profit was 83 million Baht from a total revenue of 968 million Baht. In 2017, OTO’s earnings slipped to 50 million Baht million Baht from a total revenue of 826 million Baht. In 2018, the net profit of OTO continued to decline, booking a profit of 20 million Baht from a total revenue of 718 million Baht and in 2019, profit slightly increased to 33 million Baht from a total revenue of 790 million Baht. For the nine-month period of this year, the earnings was 2 million Baht from a total revenue of 541 million Baht.  

 

Even though the performance seems fluctuated, OTO continues to record a profit, moreover, the company offers dividend payment twice a year with dividend yield at 3-5% per year. Why did SAMART decide to dispose of shares of OTO..? 

 

SAMART’s operating result just bounced back on track a year ago after facing loss for 2 consecutive years, however, this year is likely to be another bad year for SAMART as the company’s profit tends to book loss again. For the nine-month period, the loss increased to 220 million Baht. 

 

The reason for asset disposal might be because 1) SAMART would like to undertake organizational restructuring by cutting non-core business. 

 

2) With modern technology nowadays, outsourced contact center services may not be needed anymore, so, it’s better to sell than keep.  

 

3) SAMART would like to solve a lack of liquidity, it was expected that SAMART would gain a profit of approx. 271.18 million Baht. 

 

No one knows exactly why SAMART sold all its shares in OTO, but someone assumes that this transaction may just deposit it before taking it back later.