The Association of Investment Management Companies (AIMC) recently convened a meeting with 24 fund management firms to discuss transparency concerning the future business plans of CP Axtra Public Company Limited (SET: CPAXT), following the investment in The Happitat that raises concerns about the company’s corporate governance.
Ms. Chavinda Hanratanakooll, Managing Director of Krungthai Asset Management Public Company Limited (KTAM) and Chairwoman of AIMC, disclosed to “Kaohoon” that the gathering with fund management members and CPAXT was a two-hour discussion. Initially, CPAXT clarified several aspects to address the concerns of various fund managers. Following this, AIMC held an internal meeting to summarize conclusions with its members.
Key inquiries from members focused on the value of assets invested. CPAXT provided clear explanations and outlined a strategic approach for future business operations. CPAXT assured that investor reactions to the business plan would be addressed cautiously, emphasizing the reasons for CPAXT’s strategic direction.
Post-discussion with CPAXT, AIMC and its members concluded that funds such as Thai ESG Fund, ESG Fund, and CG Fund would proceed with cautious investment, placing CPAXT on a watchlist until further information is obtained from the Securities and Exchange Commission (SEC) regarding the impact on retail investors and unitholders. Further discussions on expanding investment guidelines will follow once conclusions from the SEC are received, prompting another member meeting if necessary.
AIMC plans to expedite a request for an appointment with the SEC, Stock Exchange of Thailand (SET), and related entities to discuss these concerns promptly, as they are deemed critical for all investors and unitholders. For funds outside the three ESG categories, each fund management firm will independently adjust its investment portfolios according to their judgment.
Bualuang Securities offers a slightly positive view, interpreting AIMC’s non-compulsory warning to suggest reduced institutional selling pressure, though risks remain pending SEC’s decisions. Consequently, robust buy-backs are anticipated to be limited. Bualuang perceives CPAXT’s stock price to be an overreaction to news related to The Happitat investment, with potential positive triggers being the anticipated YoY and QoQ profit growth in 4Q24 and SEC rulings. Investors with risk tolerance are advised to BUY with a target price of 37 baht by 2025, while risk-averse investors should await SEC’s decision.
Meanwhile, Finansia Syrus Securities views AIMC’s resolution as positively assuaging institutional investor concerns over CPAXT’s debt and equity investments, though AIMC will continue monitoring developments, awaiting official clarity from the SEC.
