Thai Tap Water modest market debut gain disappoints
22 May 2008
BANGKOK, May 22 (Reuters) - Shares in Thai Tap Water Supply PCL TTW.BK, Thailand's largest private water producer, rose 4.8 percent on debut on Thursday, less than expected, as weak market sentiment outweighed the company's strong earnings outlook.
TTW raised $130 million from an initial public share sale earlier this month in Thailand's second largest IPO so far this year.
'Market mood is not very good. But we recommend clients to buy the stock if it falls below the IPO price,' UOB Kay Hian Securities senior analyst Kosin Sripaiboon said. The brokerage has a fair value of 4.80 baht a share.
At 0400 GMT, the stock traded at 4.4 baht, compared to an IPO price of 4.20. The main Thai index .SETI, which hit a six-month high on Wednesday, was down 0.52 percent.
Analysts had expected the stock to rise at least 10 percent.
TTW, valued at $534 million at this level, was expected to post an average 34 percent profit growth over the next three years thanks to a capacity expansion, consistent demand and lower interest costs, SCB Securities said in a note. The company reported a 36 percent rise in net profit in the first quarter of this year.
TTW has a 30-year contract to supply tap water to Nakhon Pathom and Samut Sakorn provinces near Bangkok. Subsidiary Pathum Thani Water has a 25-year contract to supply tap water to Pathum Thani province, north of the capital.
TTW, 35.3 percent owned by Thailand's second largest construction firm, Ch Karnchang CK.BK, delayed the IPO several times since last year due to weak market sentiment and its own restructuring.
Esso ESSO.BK, a Thai unit of Exxon Mobil Corp (XOM.N: Quote, Profile, Research), raised $294 million last month in the country's largest IPO so far this year and made its debut earlier this month.
Despite Esso's tepid debut, analysts expect this year to be a busy year for fund raising in the Thai market, Southeast Asia's best performer. ($1 = 31.68 Baht) (Reporting by Khettiya Jittapong, Editing by Ed Cropley)