Aberdeen New Thai results for the year ended 28 February 2015 have been published. The Thai market did well over the period, aided by a strong Baht, and the SET (Stock Exchange of Thailand) Index returned 35.3%. Aberdeen New Thai’s net asset value return lagged this a little, returning 31.9%. The shares did slightly better, returning 32.2%. The dividend was increased from 8p to 8.2p.
The Chairman’s statement says one likely reason for the strength of the Thai market was the “bloodless coup” by the military that returned some semblance of normality and kick-started investment spending in the country.
The manager says, property developer, Sammakorn was the key positive contributor to performance. Its share price surged by more than 200% when His Majesty the King elected to sell his 23% stake in the company to an existing shareholder. Speculation that management might be freer to pursue a more dynamic strategy could have piqued interest in its shares. The holding in Hana Microelectronics also proved beneficial on an improving electronics cycle. The company has now made a full recovery from 2011’s devastating floods, which had stifled growth for several quarters. Insurers Bangkok Insurance and Muang Thai Insurance both continued their good runs, reporting upbeat results and increasing payouts to shareholders. Conversely, their holding in Thai Reinsurance detracted from performance as it continued to struggle with the fallout from its flood-related coverage. It has since turned a corner following its 2.1 billion Baht capital increase in August 2014, which allowed it to clear all remaining flood-related claims. The longer-term outlook for the insurance sector continues to be encouraging. Bumrungrad Hospital also aided relative performance but health-care provider Bangkok Dusit Medical Services, which performed well, detracted – their exposure to this stock was less than its weighting in the Index.
Holdings in BEC World and Amarin Printing proved costly as they suffered from slack advertising spending and the high costs involved in developing digitial television platforms. BEC World could face some pressure on its market share from the highly competitive digital segment; nevertheless, it remains a solid franchise with a healthy balance sheet. They say Amarin’s magazine business is highly successful, but the capital outlay required to build a television business from scratch has pushed its net-cash balance sheet into debt and they think the new venture has the potential to boost Amarin’s growth over the longer term.
Relative performance was also affected by not holding True Corporation (Telecom Asia Public), Airports of Thailand and Bank of Ayudhya, given the steep rise in their share prices. The oil price fall hit PTT Exploration & Production. It suffered a sizeable fall in fourth-quarter earnings, largely due to an almost US$1 billion write off for its Montara and oil sands projects.
ANW : New Thai lags strong Thai market