Newly SET-listed Asset World Corp Plc (AWC), the property arm of billionaire Charoen Sirivadhanabhakdi's TCC Group, will keep its investment plan intact, eyeing asset purchases in Bangkok and major tourist destinations during the period after the initial public offering (IPO).
Chief executive and president Wallapa Traisorat said the domestic tourism market will pick up in the fourth quarter after the first-half slowdown because of global economic conditions.
"Revenue in the fourth quarter is expected to leapfrog, as some of our hotels have full occupancy rates," she said.
Mrs Wallapa is the second daughter of Mr Charoen. She oversees the hotel and retail properties of her father's business empire.
After the IPO, the company's investment plan will continue apace. All investment projects will be for organic growth assets in the pipeline owned by the group, but acquisitions in non-family-owned assets will be considered on a case-by-case basis, Mrs Wallapa said.
Of the 55-billion-baht budget, 25.5 billion baht will be allocated to asset purchases in Bangkok and major tourist destinations from TCC Group, starting from the final quarter and running into 2020, she said.
The targeted assets comprise four hotels in Bangkok and major provinces, six under-development or under-renovation hotels and two under-development mixed-use projects.
The rest of the budget will be assigned to bank loan repayment and renovation and development of existing assets, with a total of 30 projects worth more than 30 billion baht that the company has been investing in and developing over the past five years.
"The tourism industry will continue growing, particularly the Mice [meetings, incentives, conferencing, exhibitions] business, which has growth of 47.6% per year," Mrs Wallapa said. "We have six international partners in the hotel sector, with a total of 300 million customers to help drive growth."
AWC is TCC Group's first family-owned business to launch an IPO in Thailand. Other SET-listed firms of the group, such as Univentures Plc and Golden Land Property Development Plc, launched IPOs through either back-door listings or share purchases.
"A back-door listing does not fit with AWC's objective, as we focus on the tourism sector and there are other businesses, which are not involved with tourism, that were acquired previously [through backdoor listing]," Mrs Wallapa said.
AWC's hotel business accounts for 61% of revenue, with 21.15% coming from offices and 17.8% from its retail unit.
Mr Charoen, whose business empire ranges from beer and spirits to property and retail, ranked fourth with US$16.2 billion in Forbes magazine's list of the richest Thais this year, behind the Chearavanont family, the Chirathivat family and Red Bull owner Chalerm Yoovidhya.
The recent move to buy the Thailand operations of Starbucks also extends Mr Charoen's strategy of increasing his stake extensively in the beverage portfolio, Bloomberg reported.
STEADY GAIN
AWC's share price ended the first trading day on a slightly higher note for what is considered the country's biggest IPO of an individual company.
AWC shares closed at 6.05 baht per share, up marginally from the IPO price of 6 baht, in turnover worth 8 billion baht.
That gave the company a market value of 187 billion baht ($6.2 billion), according to Bloomberg.
Asia Plus Securities executive vice-president Therdsak Thaveeteratham said there were varied reasons for AWC shares staying above the IPO price.
The closing price will be used to evaluate the stock's possible inclusion in the SET50 and SET100 indices, with a greenshoe option of 1 billion shares as a strategy to stabilise the share price, Mr Therdsak said.
A greenshoe option lets the underwriting syndicate buy up to 15% of shares at the offering price if public demand exceeds expectations and the stock trades above its offering price.
Veena Lertnimitr, head of investment banking and executive vice-president at Siam Commercial Bank, said a greenshoe option can support AWC's share price if it drops lower than 6 baht. Such an option is allowed for 30 days after listing on the bourse, in line with the Securities and Exchange Commission's regulations.
About 85% of AWC's IPO shares were distributed to institutional investors, with the rest going to retail investors, so volatility in the share price will be minimal and the company's future growth will act as another pillar of support, Ms Veena said.
