HoonSmart.com>> “Ubon Bio Ethanol” enters the trade on the first day, the price is low, reserve 14%, against the strong fundamentals Has a variety of products No. 1 Ethanol Business – Exporting Tapioca Starch Focus on premium products – downstream, high margin, have a chance to end the acquisition deal Expecting average annual growth of 20-30%, 5-year plan aiming at Food Tech
Shares of Ubon Bio Ethanol Company (UBE) were listed on the Stock Exchange of Thailand (SET) on the first day (30 Sept. 21), the opening price was 2.28 baht and had a strong buying power up to 2.40 baht, equal to the IPO price, but can’t stand Down to close at 2.06 baht, minus 0.34 baht, or 14.17% with a total turnover of 3,047 million baht.
Mr. Dejphon Lertsuwanroj President of Ubon Bio Ethanol Company Limited (UBE) said he was confident in the company’s performance and wanted investors to understand the business. Although the company’s name is Ubon Io Ethanol, it is not the only ethanol business. The company has a wide range of businesses. and have good margin resulting in good growth prospects In addition, the proceeds from the IPO will be used to invest in further business growth for the company. Ready to look for business opportunities Either an acquisition or a joint venture in organic agriculture Expect to see good developments in 2022, with analysts giving higher target prices than IPO prices.
” If investors have studied the information of the company will understand more about our business. UBE started as an ethanol company. and tapioca starch which is a commodity The trend is growing every year. Currently, the product portfolio has been added to be more special, whether it is the production of industrial grade ethanol. The alcohol gel is a product of their own brand. And the production of organic tapioca starch and flour flakes has made EBIDA much better. In the past, most businesses were in the middle of the water. It is now more focused on downstream. which will start producing more of our branded products,” said Mr. Dejphon.
The company plans to operate in the next 5 years to expand the Food Tech group to grow more. Focus on healthy food trends because compared to the health food market value The company is still a small part. making it possible to continue to create more growth which is a business with high margin It is expected to account for 70% of its revenue and 30% of ethanol in the future. 50% of its revenue portfolio comes from exports. The company is the No. 1 tapioca starch exporter and is one of the few producers in the world that has Able to produce organic tapioca starch certified by international organic product standards. Most sent to the United States Because the trend of love for health is strong. Consumer demand for organic products has increased. D/E is currently 1.6x and post-IPO is expected to be less than 1x, and the company will accelerate its efforts to reinvest the proceeds from the IPO to build exclu. further growth
In terms of performance in the first six months of 2021, revenue grew 40% and had a net profit of 107 million baht, which is more than the full year 2020. The second half of the year is likely to improve from the first half of the year. Both revenues and profits will grow clearly. and will continue to be good in the years to come Expect the trend to grow at an average of 20-30% per year, reflecting more business growth. and benefit from the transition from midstream to downstream business Including the use of the IPO money to expand investment to create growth opportunities, the D/E dropped below 1x, currently at 1.6x.
Finansia Syrus Securities expects UBE profit in 2021-2023 to grow 190.2%/52.0%/20.7%, driven by organic products, revenue growth of 30.1% / +13.1% / +8.5%. Mainly from tapioca starch business Gross profit margin and EBITDA margin increased in line with an increase in the tapioca business share. especially organic potato starch While selling and administrative expenses are believed to be well controlled. As a result, net profit margin increased from 2.2% in 2020 to 7.5% in 2023.
In addition, it gives a fair value in 2022 at 3.30 baht, using PE multiple of 26 times for the ethanol business, giving a premium of 30% from the average of the past 3 years of companies doing similar business, such as KSL, KTIS, TAE. UBE’s profitability in the ethanol business was 38 times higher and P/E based on the tapioca starch business was close to TWPC’s three-year historical average. Which has nearby businesses and NRF, which accelerates the expansion of the health food business.