BAY's management intends to speed up its balance sheet clean-up by accelerating provisions or selling non-performing loans after getting a Bt20 billion-Bt22 billion injection of GE Money.

   BAY's management confirmed that GE would bring in a new management team, particularly for the retail business. The Ratanrak family will end up holding 27 per cent (taking into account full conversion of warrants, of which one-third are held by the family), slightly higher than the 25 per cent held by GE.

   BAY also confirmed that GE Money Retail Bank's business (personal and mortgage loans) would be transferred to the bank.

   The bank's competitive advantage in terms of funding costs and its extensive branch and ATM network, combined with GE's expertise, could easily lead it to the top rank of retail banks.

   The brokerage has set a target price of Bt19.10.

Stock: Sino-Thai Engineering and Construction Plc (STEC)

Rating: Neutral

Securities house: Phatra Securities

The brokerage has cut its earnings estimates for Sino-Thai by 48 per cent for 2006 to Bt280 million, and by 38 per cent for 2007 to Bt497 million, to reflect rising cost pressure on its outstanding projects.

   The broker has also revised down its margin outlook on the Airport Rail Link project. There are cracks in the beams and pillars of the project and Sino-Thai is liable for the repairs. However, the cost should be marginal, at Bt20 million.

   The brokerage believes Sino-Thai will continue to see margin pressure from higher transportation costs and rising steel prices.

   Although there was a one-time cost adjustment in the first quarter, the broker does not expect to see any margin improvement in the current quarter.

   Although the broker expects strong earnings improvement in 2007, there are downside risks on margin improvement next year.

Stock: Sino-Thai Engineering and Construction Plc (STEC)

Recommendation: Buy

Securities house: Tisco Securities

Sino-Thai's management said that even if both Airport Rail Link pylons found to have serious cracks have to be dismantled, this would cost the company no more than Bt10 million.

   This would not cause a significant delay in the project's construction schedule, so the company would not face penalty charges.

   As the expected impact is not substantial, the brokerage has left its earnings forecasts unchanged.

   Assuming that Sino-Thai makes no profit at all this year, its current price to book value is cheap, at just 1.3 times.

   The brokerage has set a target price for the stock at Bt8.

oranan@nationgroup.com