STPI Hikes 36.5% since Winning the Dispute, P/BV Lower than Peer and More Room to Grow

STPI has hiked 36.5% since winning the dispute with the foreign counterparty to book approx. ฿2,600 million while the share still has lower P/BV than peer, showing more room for growth.

The share price of STP&I Public Company Limited (STPI) is now on a rally since March 11, 2019, after the arbitral tribunal ordered the foreign counterparty to pay STPI as claimed in the invoice for approximately USD 83.3 million or equivalent to approximately THB 2,600 million to end the dispute over payment of outstanding balance of trade receivables.

The share was strengthened by the news on March 25 which reported that the foreign counterparty had already made a payment of USD 83,329,361.35 to STPI.

 

STPI closes the morning session on March 26, 2019, at ฿6.20/share, increased ฿0.15/share or 2.48% with a trading value of THB 117 million. The highest price in the morning session is ฿6.25/share while the lowest is ฿6.05/share.

On March 8, 2019, which was Friday, STPI closed at ฿4.54/share with a trading value of THB 8.33 million. After the announcement of the dispute on Monday, March 11, the share closed at ฿5.05/share, jumped ฿0.51/share or 11.23% with a trading value of 132 million. STPI hiked 36.5% since then.

After such rally, is there still a room for STPI to go higher? Upon checking the construction sector has P/E at 67.32x, P/BV at 1.58x, and yield at 2.15x. Meanwhile, STPI has P/E at N/A (loss), P/BV at 1.42x, and book value at ฿4.25. Which means that STPI’s P/BV still has room for growth.

More importantly, STPI will book the payment received from the foreign counterparty in its 1Q19 financial statement. Nomura Securities states that this will reflect ฿1.60/share to STPI’s share price, indicating STPI fair value at ฿8.91/share.

 

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