T.A.C. Consumer PCL.(TACC), the major supplier and distributor of tea and coffee in “7-Eleven" sets ordinary price for its initial public offering at Baht 2.88 share. Subscription period is during 25-27 November 2015. The share is expected to be traded on the Stock Exchange on 2 December 2015.
Mr. Sompob Keerasoontornpong, Managing Director, Finansia Syrus Securities Public Company Limited, TACC’s financial advisor, share distributor and underwriter, revealed that the par value of the IPO share was Baht 0.25 per share and was priced at Baht 2.88 per share. Out of TACC’s IPO of 168 million ordinary shares, 159 million shares will be offered to the public and the remaining 9 million shares will be offered to directors, executives and staff member. The two portions of shares will be sold at the same price. The subscription period is during 25-27 November 2015. TACC stock would be listed in MAI on 2 December 2015. The symbol for the stock is “TACC".
“IPO price of TACC stock is Baht 2.88 per share. The price is commensurate with TACC’s strong fundamentals and prospect for growth from investment in automatic beverage vending machines in the future as well as other factors supporting TACC’s position as a number one player in dispenser beverage market in 7-Eleven, the convenient store chain with more than 8,000 branches all over the country. TACC has been CPALL Plc’s Key Strategic Partner as business alliance for over 12 years. TACC is also ranked number one in the green tea market in Cambodia with its brand “Zenya”. Moreover they value Research and Development and have maintained a talented R&D team. As a consequence, TACC products have all been welcomed by consumers, responding quickly and on target to capture unsatisfied demand and quickly changing consumer lifestyle", Mr. Sompob stated.
During the first nine months of 2015, the Company’s total revenue was Baht 745.42 million, a decline by 3.25 percent from that of the same period last year. Net profit for the first nine-month of 2015 was Baht 54.29 million, an increase of Baht 23.68 million or by 77.36 percent compared to the net profit of the same period in 2014, which was Baht 30.61 million and it was also higher than 2014 full year net profit, which was Baht 51.84 million. The net profit grew notably despite the stable sales since the Company put emphasis on marketing products which provided higher gross margin. Moreover, the Company obtained economies of scale from increasing the its utilization of its instant mix production capacity. This caused a unit cost of instant mix to fall as evidenced by the improvement in gross margin. For the first nine months of 2015, the gross margin increased to 30.53 percent, from the gross margin of 28.20 percent for the same period of 2014. Further, the Company also benefited from management efficiency from expense controls, especially in marketing and sales promotions. For these reasons, the net profit improved from 5.15 percent in 2014 to 7.28 percent in the first nine months of 2015.
“I am confident TACC would be a new favorite stock among investors due to its strong fundamentals and continuing improvement in operating results. These could be seen from the operating results from the first nine months of 2015. The gross margin increased to 30.53 percent, from the gross margin of 28.20 percent for the same period of 2014. The net profit improved from 5.15 percent in 2014 to 7.28 percent in the first nine months of 2015. Their investment plan is also straight forward in installing 1,500 Vending Machines by 2017 which would support our future operating results to grow outstandingly. From our recent road show in the four provinces of Thailand, the response from investors was robust. TACC would be a quality pick and would create healthy return for investors," Mr. Sompob added.
For its IPO TACC appointed Finansia Syrus Securities Public Company Limited as its financial advisor, share distributor and underwriter with six other securities houses as distributer and co-underwriters, namely KGI Securities (Thailand) Plc, Trinity Securities Co., Ltd., Thanachart Securities Plc., Capital Nomura PCL., RHB Securities (Thailand) PCL and Asia Plus Securities PCL.
Mr. Chatchawee Wattanasook, Chairman of TACC’s Executive Board, mentioned that from the proceeds of Baht 483.84 million received from its IPO, the amount Baht 120 million would be invested in 1,500 beverage vending machines to be installed within 2017 at 7-Eleven. TACC would install 10 vending machines in 2015 with a plan to install 740 machines in 2016 and 750 machines in 2017. The rest of the proceeds would be maintained as working capital.
“Our strengths come from our status as a trade alliance with 7-Eleven for over 12 years, executives team with more than 20 years experience in beverage market and our continuing research and development efforts in responding to consumer demand. Moreover, our investment in Vending Machine would be an engine for outstanding and secure revenue growth which in turn would provide for satisfactory return to shareholders going forward. For these reasons TACC would be a new favorite stock pick for investors," Mr. Chatchawee cited.