The Siam Cement Public Company Limited (SET: SCC) gained 3% to THB393.00 per share at the opening bell on Tuesday after announcing the spin-off of its chemical business and strong 2021 earnings.
As of 11.55 a.m. local time in Thailand, the share price of SCC rose THB3.00/share or 0.79% to THB385.00/share, with a trading value of THB3,221 million.
SCC on Wednesday approved the plan to issue and offer newly issued ordinary shares in an initial public offering, and to list SCG Chemicals Company Limited (SCGC)’s ordinary shares on the Stock Exchange of Thailand (SET) as a holding company.
The portion of the newly issued ordinary shares to be offered in the IPO will not exceed 25.2 percent of its paid-up capital after the paid-up capital increase post-IPO. It is anticipated that SCGC would mainly use the proceeds raised through the IPO for investment in business expansions domestically and internationally, financial restructuring and working capital.
SCC also reported a net profit of 47,173 million baht in 2021, an increase of 38.16% from a net profit of 34,143 million baht in 2020. The increase was mainly due to higher revenue from sales, especially from the chemical business that saw the highest growth.
Trinity Securities forecast SCC’s revenue of THB44 billion in 2022 based on its conservative view. SCC is pushing cement price hikes to reflect higher energy costs and has shifted its focus away from coal to alternative fuels in order to regain CBM’s EBITDA and petrochemicals to 10-15%. Trinity maintains a positive outlook on SCC, citing increased demand as the global economy recovers.
Trinity also maintains a target price of THB475.00 per share on SCC, believing that the company’s profit has already bottomed out due to the spread of the Omicron variant being less severe than expected, posing no significant harm to the global economy.
