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Published on August 10, 2007

Thai Yuan Metal's stock emerged as the biggest gainer among debutants on the main board of the Stock Exchange of Thailand so far this year, returning 8.67 per cent on its offer price of Bt3.

The stock was quoted at Bt3.60 at the opening bell and headed further north to the day's peak at Bt3.68 before closing at Bt3.26, but off the intra-day low of Bt3.22.

The steel-producer floated 100 million shares in its initial public offering (IPO).

Four companies, including Thai Yuan Metal, started trading this year and all have beaten their IPO price. The first-day gains of Total Access Communication, Rasa Development, and Unique Construction and Engineering were 4.38 per cent, 3.08 per cent and 1.67 per cent, respectively.

Trinity Securities said Thai Yuan Metal's stock is fully valued.

Even though its sales this year are estimated to rise 30 per cent, its gross margin would shrink from 5.5 per cent last year to 4.3 per cent, the brokerage said.

It forecast that Thai Yuan Metal's net profit this year would drop 22 per cent to Bt90 million.

United Securities has estimated a fair value for Thai Yuan Metal's stock at Bt3.40, representing a price-to-earnings ratio of 10 times.

Although steel prices have started to stabilise, the brokerage is bullish on Thai Yuan Metal's outlook this year, as the company's new capacity would be the engine driving growth.

Thai Yuan Metal's second-quarter net profit more than doubled, from Bt11.07 million last year to Bt24.36 million.

Two other listed steel-makers reported poor earnings in the second quarter this year.

The net profit of Thai Metal Trade (TMT) for the quarter fell almost 59 per cent from Bt121.43 million last year to Bt49.86 million.

The sharp profit decline stemmed from sales dropping 18.29 per cent and gross margins thinning from 13.17 per cent last year to 9.25 per cent, while sales, administrative and interest expenses increased.

Bangsaphan Barmill's net profit slid from Bt107.32 million last year to Bt62 million and it was the main factor in the company's disappointing quarterly peformance.

Siriporn Chanjindamanee

The Nation