In the Coming of OR, TTW-COM7 at Risk of Dropping from SET50, TKN-BEC to Drop from SET100

PTT Oil and Retail Business Public Company Limited (OR) announced the pre-emptive ratio for PTT’s shareholders to subscribe OR’s IPO newly issued ordinary shares at a ratio of 95.1977 shares of PTT to 1 newly issued ordinary shares or OR.

Meanwhile, the preliminary price range is baht 16 – 18 per share. The eligible shareholders of PTT will subscribe OR’s IPO newly issued ordinary shares at the allocated portion of their pre-emptive rights during 25th – 28th January 2021. The retail investors will subscribe OR’s newly issued ordinary shares from 24 January 2021 till 12:00 pm. on 2 February 2021.

 

The IPO range at 16 – 18 baht per share is lower than what analysts have anticipated, which initially forecasted the IPO to be higher than 20 baht per share, resulting in a large discount in OR.

The market expected OR to enter SET50 and SET100 under the “Fast Track” measure once traded in the Stock Exchange of Thailand this February.

 

Upon the listing in SET50 Index and SET100 Index, one company that ranked last in both indexes will be pushed off to make a place for OR. Currently, TTW Public Company Limited (TTW) ranked last in SET50 Index with a market cap of 48,279 million baht, while COM7 Public Company Limited (COM7) ranked slightly higher TTW at 49th in SET50 with a market cap of 48,900 million baht.

In the meantime, Taokaenoi Food and Marketing Public Company Limited (TKN) ranked last in SET100 with a market cap of 15,456 million baht and BEC World Public Company Limited (BEC) ranked 99th in SET100 with a market cap of 15,900 million baht.

 

Asia Plus Securities (ASPS) stated that OR’s firm value is estimated at 5% to the overall value in the energy sector, which would make it easier for institutional investors to adjust their portfolio in the preparation to purchase OR’s IPO, compared bigger stocks such as AWC and CRC that firm value is around 15.9% and 15.4%, respectively, to the overall value in their sector.

 

DBS Vickers Securities (DBSVS) estimated that OR’s market capitalization will rank between 17th-19th of SET50, which will attract local and international institutions in adding OR in their portfolio.

As for PTT’s outlook after the listing of OR, DBSVS saw the move to unlock PTT’s investment value, while the 4Q20 revenues were expected to recover, supported by its subsidiaries, mainly in petrochemical and refinery businesses due to higher stock gain and FX gain. ASPS stated that the outlook in 2021 remained positive in response to higher oil prices this year.

DBSVS forecasted PTT to offer a dividend yield of around 3.5-4% per year, and recommended “BUY” at a target price of ฿46.50/share.