Property developer Ananda Development's initial public offering, the final one of the year, yesterday disappointed investors, with its opening price lower than its IPO price on the first day of trade.
An analyst attributed the low trading price to the company's net loss, saying investors are not familiar with the nature of growth stocks.
Most IPOs on the Stock Exchange of Thailand this year have made good returns on their first day of trade, with some stocks even achieving a 200% jump.
Only Asia Aviation, the parent company of Thai AirAsia, fell below its IPO price on its first day before closing at the IPO price.
Ananda shares opened at 4.14 baht, lower than the IPO price of 4.20 baht by 1.43%, and closed at 3.80 baht or 9.52% lower than the IPO price, in trade worth 2.21 billion baht.
It was the first IPO issue this year to close at below the IPO price.
"I'm not worried about that, as our positioning is as a growth stock. I would prefer to see it trading in a steady range than having wide movement," said Ananda president Chanond Ruangkritya.
He said the company's strategy is to focus on long-term institutional investors looking for returns from stock growth rather than dividend payments.
Ananda plans to use profits for acquiring land near skytrain routes rather than paying dividends.
Mr Chanond said institutional investors account for about 75% of its shares, while the rest are retail investors.
He said the company expects to see its revenue rise by 25% per year at least for the next three years, with a gross profit margin of about 35%.Ananda plans to launch five or six high-rise condominium projects next year, with a long-term goal of having condos at all skytrain stations.
Its Ideo brand is for projects no more than 100 metres from stations.
Bualuang Securities, Ananda's financial adviser, said the stock has a year-end target price of five baht.
For the first nine months of this year, the developer achieved revenue of 3.8 billion baht for a net loss of 314 million.
Last year, the company recorded revenue of 5.69 billion baht for a net loss of 317 million resulting from amortisation costs.
Bualuang predicts Ananda will be able to turn a profit of about 1.4 billion baht next year.
However, a report by DBS Vickers Securities viewed the stock's fundamental price at 4.17 baht, lower than its IPO price of 4.20 baht.
About the author
- Writer: Darana Chudasri
Position: Business Reporter