SCGP: The Funds’ Choice

SCG Packaging Public Company Limited (SCGP) equity is about to begin trading this coming October, one of the largest IPO stocks in 2020 along with Central Retail Corporation Public Company Limited (CRC) and Sri Trang Gloves (Thailand) Public Company Limited (STGT).

SCGP is a subsidiary company of The Siam Cement Public Company Limited (SCC), which has had a successful operating performance in the past few years. The 2019 total revenue was 89,000 million baht with a net profit of 5,890 million baht, meanwhile the first half of 2020 total income was 45,900 million baht, increasing 10% compared to a year earlier and the net profit was 4,200 million baht, rising 45.6% from a year earlier.    

Consequently many institutional, individual and foreign investors are highly interested in collecting SCGP on their portfolio. 

As many as 14 funds are queuing to subscribe to SCGP’s IPO for 600 million shares worth 21,000 million baht. For instance, Kasikorn Asset Management, Bualuang Asset Management and SCB Asset Management combine subscribed totalling 351 million shares or account for 12,285 million baht. 

MFC Asset Management, TISCO Asset Management and Krung Thai Asset Management have been allocated 63 million shares (equivalent to 2,205 million baht), 42 million shares (equivalent to 1,470 million baht) and 37 million shares (equivalent to 1,295 million baht) respectively. 

The IPO’s preliminary price range is Baht 33.50-35.00 per share. For the shareholders of SCC eligible for SCGP newly issued ordinary share allocation can subscribe to SCGP‘s IPO from September 28, 2020 to October 2, 2020. Then, retail investors can subscribe to SCGP IPO shares around October 1 – 2, and 5, 2020.

The initial public offering or IPO of SCGP is aimed to support the business expansion by expanding its production capacity (organic growth) and/or completing business acquisitions (inorganic growth), coupled with funding its working capital needs for operating its business. 

However, the listing of SCGP had a great impact on SET as many investors have poured huge amounts of other stocks especially blue-chip stocks in preparation to buy SCGP. 

With a market capitalization of 140,000 – 150,000 million baht, SCGP is eligible to be immediately included in SET50 fast-track inclusion) by using the “Fast Track” regulation.