Bloomberg News

Ticon Industrial Rises on Profit Rebound Outlook: Bangkok Mover

February 02, 2012

Feb. 2 (Bloomberg) -- Ticon Industrial Connection Pcl, which rents out factories in Thailand, rose to its highest level in more than four months in Bangkok share trading on expectation overseas demand will help earnings rebound after floods.

The shares gained 4 percent to 13 baht at the noon break in Bangkok, heading for the highest close since Sept. 21, after climbing as much as 4.8 percent. The benchmark SET Index rose 1 percent.

Thailand’s worst flooding in about 70 years swamped seven manufacturing parks and more than 16,000 factories in the country’s central flood plain last year. Manufacturers in these industrial estates, where most of Ticon’s factories are located, have begun renovating and repairing facilities before resuming operations, according to the state-owned Industrial Estate Authority of Thailand’s website.

“Ticon will have a sharp earnings turnaround in 2012 on a recovery in factory rental income after the floods receded,” Chatree Srismaicharoen, an analyst at Ayudhya Securities Pcl, said by phone today. “The market has been too pessimistic about the impact of floods on foreign direct investment.”

The Thai government received foreign direct investment applications valued at 391 billion baht ($12.6 billion) in the year through Dec. 23, a 67 percent increase from a year earlier, the Board of Investment said on Dec. 29.

Ticon was rated “outperform” in new coverage by Patti Tomaitrichitr and Best Waiyanont, analysts at Macquarie Group Ltd. “Strong earnings” will be the key driver of the share price, the analysts said in a report dated yesterday.

Profit at Ticon may more than double to 1.2 billion baht, from an estimated 466 million baht in 2011, said Chatree.

Marc Faber, publisher of the Gloom, Boom and Doom report, bought Ticon shares at the end of 2011, the investor said in an interview with Bloomberg Television in Hong Kong today.

Ticon’s stock has rallied 19 percent this year, after dropping by the same percentage in 2011. The SET Index has climbed 7 percent this year.

--With assistance from Weiyi Lim in Singapore. Editors: Matthew Oakley, Allen Wan

TICON TB <Equity>

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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