Bangkok--May 16--Kim Eng Securities (Thailand)
Phatra Securities Public Company Limited (“PHATRA” or “the company”) has finally set its IPO price at Baht 31 per share and appointed 16 underwriters to underwrite its IPO with a size of Baht 1,550 million. Proceeds from the IPO will be used to expand its client base as well as develop its network and services. Kim Eng Securities Public Company Limited and National Securities Public Company Limited are the lead underwriters for local retail investors. CLSA group is the lead underwriter for both local and foreign institution. Beside these three major underwriters, other 13 securities companies also joined the underwriting syndication. Subscription period for institutions will be during May 17 - 20, 2005 while local investors and patronages are legible to subscribe during May 19 - 20, 2005.
Mr. Montree Sornpaisarn, Kim Eng’s Chief Executive Officer, appointed as a financial advisory and lead underwriter, announced that “It’s a big step for PHATRA to be listed on the SET because proceeds from the IPO will be used to expand its customer base and to strengthen its current operations. PHATRA is a leader in institution securities brokerage business and remain in a dominant position in investment banking business”. Regarding its financial figures, PHATRA has an impressive result with the revenues of Baht 1,634 million and Baht 1,668 million in the years 2003 and 2004 respectively, while net profits show amounts of Baht 650 million and Baht 545 million in the years 2003 and 2004 respectively. For the year 2004, 60.8% of total revenue comes from brokerage fee and 37.0% from investment banking.
Total offering size is 50 million shares with an over allotment portion of 6.5 million shares. 50% of the total offered shares will be allocated to both local and foreign institutions and 50% to local investors. The IPO price will be Baht 31. Such IPO price reflects a P/E level of 12.5 times using company’s earnings of 2004, comparing to industry’s average P/E of 14.7 times currently traded in the SET. With attractive P/E level and bright growth in the future, PHATRA’s shares has attracted an overwhelming demand from institutions, reflecting in an over subscription of 9.7 times during the book building process. In order to support high demand, the company also decided to allocate an over allotment portion of 6.5 million shares.
Ms. Suvabha Charoenying, Managing Director of National Securities, a lead underwriter, mentioned that “PHATRA’s shares have a strong fundamental with its leading roles especially in international institution brokerage business and investment banking business. The company also possesses highly experienced management and high quality staff. Moreover, company’s research team is well recognized. With all these strong fundamental factors together with niche market customer segmentation, National Securities believes that PHATRA’s IPO will be well supported by both local and foreign investors and PHATRA’s shares will be one of the shining stars for the SET this year”.
Mr. Suvit Mapaisansin, Chief Executive Officer of Phatra Securities Public Company Limited, said “the company has appointed underwriters for the IPO total of 16 companies. The IPO shares will be allocated to local and foreign institutions and retail investors with a subscription period of this coming May 17-20. Proceeds from the IPO total of Baht 1,550 million will be mainly used for investment business and support its growth in the existing business of securities brokerage and investment banking. Proceeds will also be used in future business like serurities lending and borrowing as well as derivatives business. This offering will have total shares(including over allotment amounts) accounted for 23.4% of total paid up capital. After the IPO (assuming exercises all the Greenshoe amount), the company’s total paid up capital will increase from Baht 817.5 million to Baht 1,100 million. The company expected the first day trading to be within the end of May.
The company aims to be a leader in securities business by diversifying its financial services both in the areas of brokerage and investment banking. To remain competitive, the company will need to combine its experience, knowledge and expertise in securities business together with an international standard. The company believes that with highly experienced management team and internationally recognized research team will be key to the company’s success.
PHATRA’s financial results in the first quarter of 2005, total revenue and net profit were Baht 340 million and Baht 98 million a decline of Baht 219 million and Baht 119 million compared to the same quarter of last year. The main reason is a decrease of fees and revenue from investment banking business. This is normal for investment banking business whereby success is affected by clients’ readiness, economic conditions and general capital market conditions. In the first quarter of 2004, the company earned a huge fee from underwriting for the Airport of Thailand Public Company Limited’s shares, while in the first quarter of 2005, the company had no such revenue. However, in the second quarter of 2005, the company had completed an IPO for Glow Energy Public Company Limited with a total offering size of Baht 12,144 million. The fee of which will be recorded as revenue in the second quarter of 2005.
The brokerage fees in the first quarter of 2005 was Baht 303 million, a decline of Baht 34 million, due to sluggish market condition and lower average daily turnover. However, the company was able to increase its market share from 3.8% in the first quarter of 2004 to 4.6% in the first quarter of this year caused by the benefit from higher trading volume in both local and foreign institution compared to retail’s.
Presently, PHATRA has a total registered and paid up capital of Baht 1,100 million and Baht 817.5 million. A total registered capital consists of 220 million shares at par of Baht 5. PHATRA plans to offer 50 million shares during May 17-20, 2005 and expect to be listed within the end of May under code name “PHATRA”.
Corporate Communication Dept.
Kim Eng Securities (Thailand) Public Company Limited
Tel. 02658-6300 Ext 5180, 7401-2 End.