In the News: 2005

Somboon Advance Technology Shines at SET Debut

Thai News Service
3 February 2005

Somboon Advance Technology Plc (SAT), a top original equipment manufacturing (OEM) auto-parts supplier, saw its stock rise to a peak of 37 per cent above its initial public offering (IPO) price before falling back on its first day of trading yesterday, The Nation reports.

The stock opened at Bt16.90 and touched a peak of Bt17.70 before ending the day at Bt16.60, a 28.68-per-cent gain from its IPO price of Bt12.90.

SAT became the fourth company to start trading on the exchange this year.

Three of these firms saw capital gains when they made their debut.

SAT sold 74 million shares to the public. It plans to use the proceeds to build a new manufacturing facility in Rayong.

Part of the money will also be used to repay debts. Its financial adviser for the IPO was Trinity Securities.

The firm's president Verayut Kitaphanich said he was pleased with the stock's performance. He said the timing of the IPO worked well for its shares.

He said the firm would tackle its accumulated losses of Bt800 million before it starts making provisions to pay yearly dividends.

SAT's sales this year should match the industry's average of 20 per cent, he said.

Sales in the first nine months of last year amounted to Bt2.2 billion. The company has posted a net profit of Bt319 million for that period.

Meanwhile, Thai Metal Trade Plc has priced its IPO at Bt5.95 a share.

The firm's 85 million shares may be subscribed on February 3 and 4 while trading is expected to start on February 18.

The IPO price is based on a price-to-equity ratio of seven times, well below the industry average of 10 times.

It expects to raise Bt505.75 million from the sale of its shares.

The money will be used to construct a new plant, to purchase machinery and as working capital.

Thai Metal Trade's president Parnchai Pipattanasakul said the firm's production capacity would be raised from 99,400 tonnes per year to 190,000 tonnes.

The new plant will come on-stream in 2006. Strong demand from state-backed mega-infrastructure projects and China is expected to boost demand, he said.

Sales this year should rise by 20 per cent, he said. Sales last year were about Bt5.5 billion.

In the first nine months of 2004, Thai Metal Trade's net profit was Bt248.49 million, up from Bt115.6 million for the whole of 2003.