Bangkok--28 May--Fitch Ratings
Fitch Ratings (Thailand) has today placed Asia Plus Group Holdings Securities Public Company Limited ‘s (ASP) National Long-Term Rating of ‘A-(tha)’ and National Short-Term Rating of ‘F2(tha)’ on Rating Watch Evolving (RWE). A full list of rating actions is at the end of this commentary.
The rating action follows ASP’s recent group restructuring on 1 May 2015.
KEY RATING DRIVERS
The RWE reflects the potential changes in ASP’s business model, capital structures and risk appetites on a stand-alone basis following the restructuring of the company’s group holding structure.
The former Asia Plus Securities Public Company Limited has been renamed Asia Plus Group Holdings Securities Public Company Limited and becomes the holding company of the group. A new entity, Asia Plus Securities Limited (ASPS), has been set up to operate ASP’s securities brokerage and related business. At the same time, ASP has continued to operate the proprietary trading and private equity business and has direct full ownership in ASPS and the other two existing subsidiaries - Asia Plus Advisory Co., Ltd and Asset Plus Fund Management Co., Ltd.
While there should be no material change to the consolidated financial profile of ASP, Fitch would need to assess ASP on a stand-alone basis as a holding company.
RATING SENSITIVITIES
Fitch expects to resolve the RWE after Fitch is able to assess ASP’s and ASPS’s actual financial profile and outlook after the interim financial statements at end-1H14 are made available and after the agency is able to discuss with the company’s management about potential changes on the company’s strategies, capital structures and risk appetites. Fitch expects to resolve the RWE within 3Q15.
The potential for positive rating action is limited as the restructuring is unlikely to materially improve ASP’s credit fundamentals. A negative rating action is possible if ASP’s leverage significantly increases or if the company demonstrates a material increase in risk appetites.
ASPS, the core operating entity of ASP, is the 10th-largest securities company in Thailand by traded securities volume in 2014, with 3.8% market share. The company has a fairly strong domestic franchise and is one of a few securities companies without strong shareholding links with banks or foreign institutions that has a decent market share and market presence.
The rating actions are as follows:
Long-Term National Rating of ‘A-(tha)’ placed on RWE
Short-Term National Rating of ‘F2(tha)’ placed on RWE