Bangkok--9 Dec--Fitch Ratings
Fitch Ratings has affirmed Thailand-based Asia Plus Securities Public Company Limited's (ASP) National Long-Term rating at 'A-(tha)' and National Short-Term rating at 'F2(tha)'. The Outlook is Stable.
ASP's ratings reflect its strong domestic retail brokerage franchise and solid capital and liquidity positions. The Stable Outlook is based on Fitch's expectation that the company will maintain its strong franchise, capital and liquidity. A positive rating action may be taken if ASP maintains its strong financial profile, and if its business diversification strategy results in sustained growth in profitability, without compromising its risk profile. Conversely, material weakening in ASP's capitalisation and liquidity resulting from an increase in risk appetite and/or a significant rise in leverage may lead to a downgrade.
Rising global risks will threaten Thailand's economy and the stock market in 2012, with potentially adverse impact on ASP's performance. While the full liberalisation of brokerage fees in 2012 could put pressure on ASP's profitability, its strong brokerage franchise, integrated products and services and diversified revenue should help mitigate this risk.
ASP's revenues from key businesses improved in 9M11, although this was mainly offset by sharply lower investment and derivatives gains mainly due to declines in the stock market. As a result, ASP's net profit fell 24.3% yoy to THB405.9m. Nonetheless, return on assets and return on equity remained acceptable at 7.7% and 13.3%, respectively.
Liquid assets accounted for 39.4% of total assets at end-June 2011. Despite increased borrowing, leverage remained modest with debt/equity at 0.18x, although this is likely to increase to fund future business expansion. ASP's capital remains strong with an equity/assets ratio of 56.3% and a net capital ratio of 112%, compared with a 7% requirement, at end-September 2011.
ASP is one of Thailand's leading securities brokerage companies. The company was founded in 1974 by the Sophonpanich family, who founded Bangkok Bank Public Company Limited (BBL), the largest Thai bank by assets. ASP's key operations include brokerage, investment banking, asset and wealth management, and investment. BBL remains the largest single shareholder with an 8.5% stake, although the bank has limited involvement in business or management. Other major shareholders include the Sophonpanich family (14.5%) and ASP's management (3.5%).