WHA Corporation Public Company Limited (SET: WHA) has notified the Stock Exchange of Thailand (SET) about its plan to issue and sell additional common shares to the public for the first time, leading to the IPO of WHA Industrial Development (WHAID), which operates in the industrial estate sector.
The IPO will offer up to 970.5 million shares, representing a maximum proportion of 22.73% post-IPO. This comprises 388.2 million new shares, accounting for 9.09%, and existing ordinary shares from WHAID and WHA Venture Holding (WHAVH), totaling 485.2 million shares and 97.0 million shares respectively, representing 13.64% post-IPO.
WHA indicated that the reason for the IPO is to expand its business as per the strategic plan, bolstering the company’s financial strength to support business expansion and enable WHAID, which has high growth potential, to independently access sources of funding.
In addition, WHA aims to restructure its shareholding in WHA Utilities and Power Public Company Limited (SET: WHAUP) by acquiring 382.5 million shares (10%) from WHAID and WHA Industrial Development International (WHA IDISG) at 3.56 baht per share.
After this restructuring, WHAID will hold 61.59% of WHAUP, while WHA IDISG will no longer be a shareholder of WHAUP. This strategic enhancement aims to increase WHAUP’s capacity for growth since having WHA as a direct shareholder will afford WHAUP additional flexibility in its capital fundraising efforts.
Kasikorn Securities (KS) views this business restructuring positively as it will provide a clearer valuation of WHA shares with the increased capital base of the industrial estate business.
However, the gearing levels of the company, which are not currently high (the net Interest-Bearing Debt to Equity ratio (IBDE) at the end of 2024 at 1.06x against a financial covenant cap of 2.5x, allowing an additional borrowing capacity of 55 billion baht from the current 49 billion baht), raises concerns for some investors about WHA’s financial standing or the need for significant short-term investment expansion. This is due to an increase in capital expenditures over 5 years from 78.7 billion baht to 119 billion baht, primarily for new business endeavors like WHA Mobility.
Still, Kasikorn Securities maintained a “Buy” recommendation for WHA, setting a target price of 6 baht per share. The firm noted that there should be more detail on this matter after an analyst meeting with the company.
