VGI Benefits from Positive Factors: Sells 33.33% of Rabbit Line Salary Stocks and Boosts MACO Stocks
At 11:17 am, VGI’s stocks experienced a notable rise, increasing by 4.73% or 0.14 baht to reach 3.10 baht. The trading value amounted to 136.02 million baht, up from the opening price of 2.94 baht. The highest and lowest prices recorded were 3.10 baht and 2.94 baht, respectively.
In another encouraging development, MACO stocks also witnessed a surge of 7.02%, rising by 0.04 baht to 0.61 baht. The trading value reached 43.17 million baht, surpassing the opening price of 0.57 baht. The highest and lowest prices observed were 0.63 baht and 0.57 baht, respectively.
Rabbit Line Investment Sale Signals Positive Outlook for VGI
An analysis by Krungsri Securities has shed light on VGI Public Company Limited’s recent decision to sell its stake in Rabbit Line salary stocks (RLS), a move prompted by the underperforming financial status of RLS. VGI’s subsidiary, RabbitPay System (RPS), revealed to the SET that it intends to sell a 33.33% share of Rabbit Line (RLS) to third parties Line Man (Thailand) and Line Company (Thailand). While the exact amount from the sales transaction has not been disclosed by VGI, the company confirmed that it anticipates a profit of approximately 300 million baht.
Regarding VGI’s strategy, Krungsri Securities views this sale as a significant step for the company this year. VGI’s primary objective is to minimize losses incurred by affiliated companies, effectively enhancing the company’s overall financial performance and ensuring a swift return to profitability. The analysis estimates that VGI will record a further increase of 300 million baht in share sales during the second quarter of the 2023/2024 financial year, indicating that VGI’s losses in the same period will be insignificant or possibly even transformed into profits, following a loss of 366 million baht during the first quarter of the 2013/2014 financial year.
Additionally, VGI is expected to generate a total of 500 million baht through this round of share sales. While the purpose of this influx of capital remains undisclosed, it is evident that it will strengthen VGI’s cash flow position. Projections indicate that RLS will result in a loss of 60 million baht for VGI during the 2023/2024 financial year. Therefore, the divestment of RLS will ultimately reduce VGI’s losses in 2024 to 66/67, down from the initial estimate of 60 million baht, representing approximately 6% of the projected annual loss of 1 billion baht.
Positive Outlook for VGI Maintained with a Target Price of 3.27 Baht
Considered merely the initial step in divesting from loss-making enterprises, the sale of RLS shares reassures analysts. It is expected that subsequent divestments will follow in waves. The attractiveness of VGI lies in its proactive approach to reviving underperforming businesses by strategically deconsolidating them from the company’s consolidated financial statements.
Given these developments, we maintain a BUY recommendation on VGI, setting a target price of 3.27 baht. The sale of RLS shares signifies the beginning of a series of divestments aimed at eliminating loss-making ventures. VGI’s dedication to rectifying its financial position demonstrates its commitment to creating value for shareholders and positioning itself as a resilient player within the market.
VGI rises on positive factors, sells 33.33% of Rabbit Line salary stocks (RLP), increases MACO stocks
At 11:17 am, VGI added 4.73% or increased 0.14 baht to 3.10 baht, trading value 136.02 million baht from the opening price 2.94 baht, the highest price 3.10 baht, the lowest price 2.94 baht.
MACO added 7.02% or increased by 0.04 baht to 0.61 baht, trading value 43.17 million baht from the opening price of 0.57 baht, the highest price of 0.63 baht, the lowest price of 0.57 baht.
Krungsri Securities said in its analysis that VGI Public Company Limited (VGI) announced the sale of its investment in RLP, which had a loss. Last night, RabbitPay System (RPS), a subsidiary of VGI, informed the SET that the company It is selling its 33.33% stake in Rabbit Line (RLP) to third parties Line Man (Thailand) and Line Company (Thailand) VGI has not disclosed how much money it received from the sale, but VGI said the sale of the shares bring a profit of about 300 million baht to the company.
We see this as a positive development for VGI as this is our main priority this year. Its purpose is to remove associated companies with losses from the company’s income statement. And try to turn around and make a profit as soon as you can. We estimate that VGI will record a Bt300mn increase in share sales in 2QFY23/24, suggesting that VGI’s loss in 2Q will be very low, or even profitable. of a loss of 366 million baht in the first quarter of the 2013/2014 financial year
In addition, VGI is expected to receive a total of 500 million baht from this round of share sales. We do not yet know for what purpose VGI will use this money. But the cash inflow will definitely strengthen VGI’s cash flow position We expect RLP to result in a VGI loss of Bt60m in FY23/24, so the exit of RLP will increase VGI’s loss in 2014. 66/67 is down from our estimate original of Bt60m, or 6% of our full year loss estimate of Bt1bn.
We maintain a BUY recommendation on VGI with a target price of 3.27 baht. The sale of RPL shares is only the first transaction of selling a loss-making company. This is expected to follow in waves We like VGI because of the problem of turning around the split attempt. (deconsolidate) a company whose losses are removed from the company’s consolidated financial statements
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