InvestIdeas

This one should be hot as long as the price is fair ...

Sri Trang Said to Seek $280 Million in Singapore Sale
By Jonathan Burgos and Supunnabul Suwannakij

Sri Trang Agro-Industry Pcl, the best performer on Thailand’s benchmark stock index last year, wants to raise about $280 million from a share sale in Singapore, according to a term sheet obtained by Bloomberg News.

Sri Trang, Thailand’s biggest publicly traded rubber producer, will sell as many as 280 million shares to individual and institutional investors, according to a prospectus sent to the Monetary Authority of Singapore today. The company in August delayed the sale, citing “volatility” in global equity markets.

Rubber surged to a record today as heavy rains in producing countries including Thailand hurt supply, while demand climbs, led by China and India. Sri Trang will become the second company after Total Access Communication Pcl to list stock on the exchanges in both Thailand and the city-state.

“I wouldn’t be surprised if it does well given that the environment is quite benign right now and some investors, rightly or wrongly, are quite happy to chase returns,” said Manraj Sekhon, the London-based head of international equities at Henderson Global Investors Ltd., which oversees about $96 billion in assets. “Commodities are hot and rubber prices have spiked.”

The Singapore offering will take place from Jan. 20 to Jan 24, with the price to be set on Jan. 24, and the listing on the local exchange expected on Jan. 28, according to the term sheet.

Sri Trang was last year’s best performer among the 478 members of the SET Index, gaining 696 percent, according to Bloomberg data. The stock slid as much as 8.5 percent to 37.5 baht today after climbing to a record of 41.25 baht yesterday.

Rubber futures on the Tokyo Commodity Exchange have risen as much as 9.6 percent this year, climbing to a record 454.4 yen ($5.47) per kilo today, extending 2010’s 50 percent advance. The rally has also been driven by an advance in crude oil, which raises the cost of making rival synthetic rubber.

Sale Proceeds

Proceeds from the Singapore share sale will be used to expand processing plants and acquire additional land for plantations, according to the prospectus.

Sri Trang has estates in Thailand and plants in Thailand and Indonesia. The company said it plans to boost capacity for natural-rubber products to about 1.5 million metric tons a year by the end of 2012 from about 860,259 tons at present.

Net profit totaled 3.16 billion baht ($104 million) for the nine months to Sept. 30, an increase of 2.4 times from a year earlier, according to the prospectus.

J.P. Morgan (S.E.A.) Ltd., CIMB Bank Bhd. and Standard Chartered Securities (Singapore) Pte are managing and underwriting the sale, according to the prospectus.


http://www.bloomberg.com/news/2011-01-1 ... ate3-.html

Not vested

Sri Trang offers 280m shares at $1.60/shr for mainboard listing
By ANGELA TAN

Thai-listed Sri Trang Agro-Industry Public Company Limited is offering 280 million new shares at the maximum offer price of S$1.60 each for dual primary listing on the mainboard of the Singapore Exchange.

The offer comprised 266 million placement shares and 14 million shares offered to the public.

The company plans to use the net proceed of S$427 million to fund its rubber business.

The public offer in Singapore will close at 6pm (Singapore time) on 24 January 2011.

The final price is expected to be determined on 24 January 2011.


Source: Business Times

Company website:

http://www.sritranggroup.com/en/page/index.php

Thai Sri Trang cancels S'pore IPO listing

BANGKOK, Jan 26 (Reuters) - Thai rubber maker Sri Trang Agro-Industry Pcl said on Wednesday it has cancelled its plan to list shares on the Singapore bourse due to unfavourable market conditions.

The cancellation came after the company postponed fixing its initial public offering price (IPO) on Monday after the Thai stock market tumbled along with other regional bourses.


Source: Reuters

Reuters at 11am said IPO cancelled. Then at 3.30pm, they came out with the following announcement:-

The board of Directors of the Company is pleased to announce that the Offering Price has been fixed at S$1.20 per Offering Share (equivalent to Baht 29 per Offering Share based on an exchange rate of Baht 24.163 = S$1.00, quoted by Bloomberg L.P. on 25 January 2011).

http://info.sgx.com/webcoranncatth.nsf/ ... penelement

so got list or no list????? haha!! SGX being taken for a ride time and time again...no face.

Not vested. This episode dont give me a lot of confidence in them ...

Sri Trang prices Singapore share offer amid some confusion By Anette Jönsson

Sri Trang Agro-Industry, a leading rubber producer in Thailand and globally, is set to become the first Bangkok-listed company to have a dual listing in Singapore after yesterday fixing the offer price at S$1.20 per share. This allowed the company to raise S$336 million ($262 million).

The share offer didn’t come without its difficulties, however. The pricing had to be postponed from Monday after the Thai market suffered its biggest plunge in 15 months and yesterday morning the company issued a statement on the Stock Exchange of Thailand’s website saying the deal had been cancelled, only to retract it some 50 minutes later, saying the deal was still on.

The two statements understandably caused a lot of confusion among investors and existing shareholders and, when the stock resumed trading in Bangkok after a two-day suspension, the share price plunged as much as 15.6%. It recovered some of those losses during the day and finished the session 10.2% lower at Bt33. By then, the company had priced the Singapore share offer, which eased the earlier confusion.

However, the price was fixed a full 25% below the earlier announced maximum price of S$1.60 and some 12% to 15% below the range where most investors had been willing to buy the shares last week, according to sources.

Importantly, the Singapore price was also set at a 21% discount to the latest trading price in Bangkok last Friday, which obviously added to the pressure when the stock resumed trading one hour into the morning session yesterday.

That said, yesterday’s sell-off in the stock was also a delayed reaction to the 4.3% decline in the benchmark SET index on Monday when Sri Trang was suspended. The Thai market lost a combined 7.3% in the four days from Thursday to Tuesday as investors grew increasingly nervous about the ongoing protests by nationalist demonstrators, initially triggered by a border dispute with Cambodia.

Indeed, the fact that Sri Trang closed well above the Singapore offer price yesterday should probably be taken as a sign that investors recognise the underlying fundamental value of the company – even if they require a substantial discount to take on the exposure right now.

The S$1.20 offering price in Singapore is equal to Bt29 per share, which means Sri Trang’s Bangkok-listed stock closed at a 13.8% premium to the offer price yesterday. The rubber producer is due to start trading in Singapore on Monday next week after the debut was pushed back by one day due to the delayed pricing.

The announcement yesterday morning that the deal had been cancelled was a mistake by the company, although the fact that someone thought that this was a possible outcome suggests that there had been discussions about a postponement.

In the notice, the company referred to the “unfavourable conditions in the capital markets and volatility since late of last week” which it said “affects the investment decision of the international investors (as well as) price and demand of the shares of the company to be issued and offered to investors”.

However, sources close to the Singapore offering said that investors were still interested in the stock at the lower price and, after giving them an extra couple of days to re-evaluate the situation, most of the earlier orders were reconfirmed.

Some new orders also materialised on Tuesday as the price was lowered, perhaps as investors recognised a greater potential for arbitrage opportunities between the shares listed in Singapore and Bangkok, which are fully fungible. According to the sources, most investors had previously been willing to buy the Singapore shares at a price equivalent to about Bt33 to Bt34.

While clearly not a blow-out – less than 50 investors participated in the offering -- there was sufficient demand for all orders to be scaled back somewhat. The buyers comprised global funds, including some tier-1 accounts and sovereign wealth funds; Malaysian investors and some London accounts with a good understanding of the plantation industry; short-term money; and some existing shareholders currently holding the Bangkok-listed shares.

Sri Trang offered 280 million new shares through the Singapore share offering, which equals 21.9% of its enlarged share capital. Five percent of the deal was earmarked for Singapore retail investors, while the remaining 95% was placed with institutional investors.

J.P. Morgan acted as global coordinator for the offering as well as joint bookrunner together with CIMB and Standard Chartered. The three banks did some pre-marketing in early January and the company kicked off a roadshow to Asia and London on January 13.

The maximum price of S$1.60 was announced a week later. The Bangkok share price fell 10.4% during the roadshow from a record high of Bt41 just before.

Sri Trang, which has been listed in Bangkok since 1991, had a massive year last year amid a 50% rally in rubber prices. The share price surged 696% which, according to Bloomberg, made it the best performing stock among the 479 stocks in the SET index.

The company is also a direct play on the rapidly-growing demand for cars primarily in India, China, Asean and South America, as the tyre industry accounts for more than 70% of the global demand for natural rubber.

Following the sharp gains, Sri Trang now has a market cap of about $1.1 billion and, based on yesterday’s closing price, it trades at a 2011 price-to-earnings multiple of 9.4 times. The Singapore offer price was fixed at 8.0 times next year’s earnings.

Despite the impressive gains in its Bangkok-listed shares, Sri Trang wasn’t able to complete an attempt to list in Singapore last summer. The company called off the attempt in late August, citing global market uncertainties.

At that time, it was expected to be able to fetch about Bt19 per share, which means that even with the significant discount this time around, the delay worked out in the company’s favour.

Sri Trang is present across the value chain, from rubber plantations to processing and sales and distribution. Through various associates, it is also involved in the downstream production of examination gloves and high-pressure hydraulic hoses.

In 2009, it had a 15.2% share of rubber production in Thailand, which is the largest producer of natural rubber in the world with about one-third of the total production.

On a global scale, Sri Trang’s sales volumes in 2009 accounted for about 8.2% of global demand. Its key customers include Goodyear, as well as tyre manufacturers in emerging markets like China and India.

In addition to its rubber plantations in Thailand, the company also has raw material procurement centres and 21 processing plants in Thailand and Indonesia, sales and distribution operations that are managed out of Singapore, as well as a global purchasing hub for key users of natural rubber and distribution and warehousing facilities in China.

And the company continues to increase its global footprint with plans to build nine new plants for technically specified rubber (TSR), which is used to make tyres, in Thailand and Indonesia by 2012. This will increase its total annual production capacity to 1.5 million tonnes from 860,259 tonnes at present.

It is also looking to acquire approximately 8,000 hectares of land in Thailand and Indonesia and other suitable areas over the next four years to grow more rubber trees.

According to the Singapore listing prospectus, the company generated Bt46 billion ($1.5 billion) of revenues in 2009, which it converted into a pre-tax profit of Bt2.6 billion. In the first nine months of 2010 it added significantly to this with revenues of Bt61.3 billion and a pre-tax profit of approximately Bt3.5 billion.

http://www.financeasia.com/News/246161, ... refresh=on

Not vested

Background

Sri Trang Agro-Industry Public Company Ltd (Sri Trang) is an integrated natural rubber business involved in the entire supply chain from plantations, procurement, rubber processing as well as sales and distribution.

The Group is listed on the Stock Exchange of Thailand and has a market capitalisation of Bt36.75b as on 21 Jan 11.

The Group has 19 rubber processing facilities in Thailand and two rubber processing facilities in Indonesia, with an estimated total effective production capacity of 860,259 tonnes annually.

It has customers in Asia, the US and Europe, including global tyre manufacturers, such as Goodyear.

To diversify its income stream, the company has invested in its associate, Siam Sempermed Corporation (SSC), which manufactures examination gloves for medical and industrial purposes.

The company has also co-invested with Semperit Technische in its other associates,
Semperflex Asia and Semperflex Shanghai. Austria-based Semperit Technische produces and sells rubber and plastics products while Semperflex Asia and Semperflex Shanghai manufacture other finished products including high-pressure hydraulic hoses, escalator handrails and various rubber and plastic parts which are mainly used in
electrical appliances.

http://sg.uobkayhian.com/page/site/publ ... ng0125.pdf

makes you wonder why they are so desperate to IPO... afraid that the window of opportunity will close soon??

but if it still dropped below its lower IPO price of $1.20, then it could be an opportunity in near future.

Not vested

Sri Trang opens 4.2 pct lower in Singapore debut

SINGAPORE, Jan 31 (Reuters) - Shares of Thailand's Sri Trang Agro-Industry , the world's biggest rubber producer and exporter, opened below their issue price on their Singapore debut on Monday.

Around 0100 GMT, Sri Trang was traded at S$ 1.17, which is roughly equal to 28 baht . The shares opened at S$1.15 or about 4.2 percent below the Singapore issue price.

Sri Trang, also listed in Bangkok , last week sold 280 million shares in its Singapore IPO at S$1.20 each, raising S$336 million in gross proceeds. The funds will mainly be used to expand output, which could include acquisitions.

Sri Trang's Singapore offer price was equivalent to about 29 baht, a sizable discount to its Friday closing price of 35 baht at Friday's close.

"We expect the volume to be active as Sri Trang is one of the largest processors of natural rubber, which may attract the interest of some global funds and investors," said Ng Kian Teck, an investment analyst at SIAS Research.

Ng said last week, before the crisis worsened in Egypt, that he expected Sri Trang's shares to rise on their Singapore debut given the discount to Thailand and the undemanding price-earnings ratio of less than nine times forecast earnings.

JPMorgan was the sole global coordinator of the share offering, as well as the joint issue manager, bookrunner and underwriter together with CIMB and Standard Chartered.


Source: Reuters