Kaohoon’s Top News on September 13, 2021

– The Board of Directors of Sino-Thai Engineering and Construction (STEC) has resolved  to not enter into a transaction with STPI in the acquisition of its subsidiary, STIT, citing the COVID-19 pandemic situation, which has delayed the bidding process for government infrastructure projects and slowed private construction work. Furthermore, the company has hired C.J. Morgan as a new financial advisor to conduct a financial projection, which suggests that when considering investments including interest, the return on equity from the STIT investment will be reduced to 0.16%, down from 16.53% previously estimated. The appointment of C.J. Morgan has raised questions about the new financial advisor’s transparency and independence, as Mr. Chamni Janchai, the current Chairman of STEC’s Audit Committee and a director of STPI, previously served as C.J. Morgan’s owner and chairman. This may lead to a conflict of interest.  

– Advanced Info Service (ADVANC) agreed to pay for dispute settlement to National Telecom Public Company Limited (NT) in an amount of 447.87 million baht. The company and NT hence submitted dispute withdrawal to the Administrative Court, and agreed that both parties will no longer raise any future claim on the settled disputes. KGI Securities believes this matter not only would reduce ADVANC’s risk from losing some of those disputes, as some of the arbitration resolutions were in favor of TOT/CAT, the settlement opens up the possibility of further collaboration between the company and NT. KGI raised ADVANC as Top Pick, giving a target price of 222 baht.

– Aeon Thana Sinsap (AEONTS) is expected to report a full year’s growth of 12%, as the company will launch a digital loan with BTS in October. Maybank Kim Eng (Thailand) sees more room to increase revenue from higher credit lines and the Bank of Thailand no longer restricts the number of operators. This means AEONTS can offer its products to more customers and expand its loan portfolio. Thus, revenue from credit cards would recover in 4Q21 ahead of the country reopening. The current share price of AEONTS is still laggard, the analyst maintains BUY rating and 260 baht target price.

– Prime Minister Prayut appointed sixteen committees to probe the satellite concessions; the first meeting is scheduled today (September 13). NT admits that it lacks the necessary ability to control Thaicom 4 and 6 satellites due to the absence of specialized capabilities, citing a concern of insurance companies refusing to preserve warranties. The Ministry of Digital Economy and Society has written to THCOM requesting cooperation in the management of satellites.

– The Energy Regulatory Commission has announced the results of 74 community power plant project appeals. CWT has been awarded ten additional projects totaling 30 megawatts, CV-UAC has been awarded two additional projects, and TPCH-CPI has been awarded one additional project.

– The analysts forecast JMART group to make all-time high earnings in 3Q-4Q21. Most recently, the TRIS rating is set to revise the credit rating following a partnership with BTS. Maybank Kim Eng (Thailand) expects 3Q-4Q21 earnings to be stronger than the market and is estimating net profit growth in 2022 at 67% YoY growth or 2.4 billion baht. This will be able to offset 18% dilution from the capital increase and maintain average EPS growth (CAGR) of 43% over the next three years, giving a target price of 58 baht.