In the News: 2005

Parts maker Sets Price at B12.90

Bangkok Post
19 January 2005

The auto parts manufacturer Somboon Advance Technology has set an initial public offering price of 12.90 baht per share for its float of 74 million new shares tomorrow and Friday.

Shares of the company will be listed on the Stock Exchange of Thailand on Jan 31. Trinity Securities is the adviser and underwriter for the offering.

Verayut Kitaphanich, the president of SomboonAdvance Technology Plc (SAT), said response from foreign and local institutional investors during bookbuilding, was quite strong.

The company will use the 954.6 million baht expected to be raised from the offering to repay debt, he added.

Pakhawat Kovithvathanaphong, the CEO of Trinity Securities, said the pricing for the issue offered investors good value compared with the overall sector.

"We set a price-to-earnings ratio of eight times, compared with the industry average of around ten times," he said.

"The price is fairly attractive, though some might wonder if it is too low. But the decision was to offer a discount to help draw investors and build interest in the issue."

Kanitha Subpa-Asa, the president of Trinity Advisory 2001, said SAT's strong market position, with a 79% share of the market for locally produced axle shafts, was one factor behind the strong interest shown by institutions during bookbuilding.

"Nothing really worries me about this offering. We're ready to go," she said.

SAT reported net profits of 319 million baht on revenues of 2.18 billion for the first nine months of 2004. Its gross profit margin as of Sept 30 was 27.4%, and is expected to decline to around 25% due to increasing cost pressure with the rises in steel prices in the local market.