JWD, which will have 29 September as its first trading day, is confident of attracting healthy interests from investors. It declared its intention to penetrate the neighbouring logistics markets by building warehouses in Myanmar, Laos and Cambodia, and is looking for opportunities to secure local partnerships or acquire local businesses to make it become an Asean leader in logistics. Brokerage firms’ analysts see JWD stock’s fair value within the range of THB 13.60 – THB 14.20 per share and note the stock’s potential to record outstanding growths.
Mr Charvanin Bunditkitsada, Chairman of the Executive Committee and Chief Executive Officer of JWD Infologistics PCL, or JWD, a fully integrated in-land logistics service provider, revealed that the company’s stock will become tradable on the Stock Exchange of Thailand on 29 September, with ticker symbol “JWD”. He expects that the company’s 120 million IPO shares (par value at THB 0.50), which have been subscribed for by investors between 21 and 23 September at THB 11 each, will remain attractive among investors in the secondary market.
JWD possesses more than 35 years’ experience as an in-land logistics service provider. It has five core business segments: i) storage and management of general goods, dangerous goods, automobiles and parts and cold chain goods; ii) domestic and cross-border cargo transport; iii) removal of articles for corporate and individual customers both in Thailand and abroad; iv) document and information storage and management; and v) other services (ie building and warehouse space rental and information technology system development). As it has secured a 30-year concession for storage and handling of dangerous goods in Laem Chabang port, all the dangerous goods loaded and discharged at the port must be processed through its dangerous cargo warehouse.
The company will use the funds raised by the IPO to finance its domestic and overseas expansions and as working capital. It is building warehouses with an aggregate space of 6,490sq.m. for general goods and cold chain goods in Myanmar, Laos and Cambodia to satisfy demands from the booming food retail business there, and the constructions are expected to be completed in Q2/2016. As for its business in Thailand, it has turned its warehouses within Laem Chabang port into a 9,000sq.m. LCL consolidation hub, and another area into a 6,000sq.m. storage and distribution centre for separation and loading of dangerous goods on light trucks. These two projects will begin commercial operation in Q1/2016.
"Possessing know-hows and more than 35 years of experience in the business, including the extremely efficient warehouse management software that was developed by one of our subsidiaries, we have a competitive edge over competitors. We are also able and willing to secure a leader position in the Asean logistics market by building warehouses in neighbouring countries, as well as seek to enhance our strength through equity partnerships or mergers and acquisition to achieve our ultimate goal,” he said.
Mr Manpong Senanarong, Managing Director, Kasikorn Securities PCL, as Financial Advisor and Lead Underwriter, added that the overall logistics business in Thailand and across Asean will sustain the growth momentum, driven by the introduction of the Asean Economic Community (AEC) this yearend, which will enhance connectivity in the trade and investment sector and enlarge the manufacturing bases within the region. Particularly, JWD’s logistics business will benefit from its opportunities to serve customers in the CLMV countries (ie Cambodia, Laos, Myanmar and Vietnam), where several Thai and international firms have established manufacturing plants, and will record strong growths as a result of such opportunities.
According to the analysis reports prepared by four securities firms, ie Kasikorn Securities, Asia Plus Securities, SCB Securities and Tisco Securities, JWD will likely experience continuous growths between 2015 and 2017, with gross profit margin rates higher than 40%, mainly due to high growth rates of the revenue from warehousing of cold chain goods, automotive products and dangerous goods. The annualised growth rates are projected to reach 17% and 14%, respectively, and the investment outlook is positive in light of the construction of warehouses for general goods and cold chain goods in Myanmar, Laos and Cambodia, where JWD is among the first logistics firms to penetrate and stands ready to tap the fast growing logistics and warehouse demands there.
JWD stock’s fair value for 2015 to 2017 is estimated, on a discounted cash flow (DCF) basis, to fall within the range of THB 13.60 to THB 14.20, with a P/E ratio in 2015 forecasted to be around 22.5-23, well below the industry’s average of 34. The fact that the fair value (THB 13.60 – THB 14.20) is higher than the IPO price (THB 11) makes the stock very attractive to investors.