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Baht/$ 33.47/52
Bid/Ask
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GOLD |
15,200
- 50
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INITIAL PUBLIC OFFERING
DARANA CHUDASRI
Siam Global House executives are concerned that its plan to raise capital through an initial public offering could be derailed by weak market sentiment and the 22% decline this year in the main market index.
The Stock Exchange of Thailand has been battered this year by political uncertainties, rising inflation and the US financial crisis. The price-to-earnings ratio for the market has fallen to just over 11 times, compared with 17 at the end of 2007.
"Politics is certainly a major concern, as the uncertainties have affected the stock market. This will also affect our IPO price if based on the price-to-earnings method," said Witoon Surivawanakul, the chief executive of Siam Global House.
He said pricing for the company's offering would be reviewed again once its filing was approved by the Securities and Exchange Commission over the next couple weeks.
The building materials distributor was established in 1997 and currently has paid-up capital of 700 million baht.
Siam Global House (SGH) plans to float 260 million shares in its IPO this quarter at one baht par value. Funds raised from the offering will be used to finance branch expansion and for working capital.
Asset Pro Management is the financial adviser for the offering. The underwriters are Kim Eng Securities and Bualuang Securities.
"We expect the stock to be well received from investors. After a roadshow in 10 provinces, we have also received attention from four or five institutional investors as well," Mr Witoon said.
Mr Witoon said SGH would proceed with its branch expansion plan even if the IPO programme was changed.
The company has already completed construction of its new Chon Buri branch, and will open a new branch in Nakhon Pathom in the second half as well as expand to Ayudhya and Kalasin. The company currently is headquartered in Roi Et, with other branches in Khon Kaen, Udon Thani, Chiang Mai and Rayong.
Second-quarter revenues exceeded 200 million baht, up 25.8% year-on-year. Net profits for the quarter are also projected to rise by double digits year-on-year. "Our margin is not diluted by inflation. We adjusted prices up by 10-13% and are able to maintain our margins even though costs have increased," Mr Witoon said.
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