SITHAI, post the company visit.

PaulRen's picture
Company Visit

I belive SITHAI (9) remains a quality growth company.  A leader in its field which additionally is reducing its OEM business, so to increase profit margins. This along with price increases should start showing expanding profit margins by the 3 Q. Based on this and below answer received I remain an investor fan. 

RE: Thank you for our visit.  Diversified shareholder base.  Seeking higher valuation on SITHAI.

Dear K. Sanan,

I enjoyed our second meeting with your company on May 25th.  Thank you again for your valuable time.

Getting to know you better and understanding SITHAI (9.65)  deeper is of interest to many of us here.  As you know we gear our fundamental research, called value investing, toward astute individual investors -all around the world, since 1997.  Through this, a company like yours can reach a far more diversified shareholder base.  Studies have shown that a diversified shareholder base increases a firms p/e ratio -besides reduces stock price volatility.

Other elements which increases a firms valuation, are visible earnings growth drivers and proper not overdone, shareholder sweeteners.  While the earnings growth next year now seems a bit uncertain with SITHAI, as INDIA is on the back burner, your production capacity is maxed-out and minimum wages are likely to increase along with labor shortages?  It would be very helpful if you could possible explain better these shareholder concerns better or perhaps K Prin or K. Narongporn could answer me directly.

I also believe a humble shareholder-sweetener would enhance investor attraction, trading volume and so valuation of your stock.  For example, issuing "out of the money" 3 year free warrants (say convertible at 14 Baht per share) would attract serious investors!  It's not diluting as its not convertible until or unless your stock price passed 14 Baht.

Or,  a stock interim dividend, rather then just cash dividend. So many other companies have done this successful here in the past 2-4 years. 

The risk in Thailand, as many astute investors know all too well, is getting stuck with "an investor bargain which remains a bargain", and so is no investor bargain. :)

A "wall flower’stock which then just sits with low volume and low attention -and then languishes. Once such a label is put on your stock its extremely difficult to get out of that rut.

This to me as a long stock market professional in this business, it is what management must try to address to increase the firms p/e rating.  As a low p/e rating increases the firms cost of capital besides then deteriorates shareholder interest.  Thank you for any comments you can share.

Best Regards, 

Paul Renaud.



June 9, 2011

Dear Mr. Paul Renaud,

I thank you very much for your kind E-mail message to me, dated 6th June 2011, regarding Srithai’s operation and your proposed sweetener to shareholders.

I would like to clarify some points raised by you.  Regarding the India Manufacturing Plant Project,  we have to suspend it for a while to give ourselves some more time to clear tax issues of the project.  Please be advised that we are increasing our production capacity for melamine tableware by about 20% this year, and the labour shortage issue has been addressed.  Implementation should show its result this month.  The increase of production capacity is a must since global demand is very strong and it looks positive. 

Regarding your suggestion about issuance of warrant, I shall find some time to discuss with our Board members.

I thank you very much for your kind interest in Srithai Superware. 

Best regards,

Sanan Angubolkul

Chairman & President,

Srithai Superware Public Company Limited

15 Suksawat Rd., Soi 36, Bangpakok,

Rasburana, Bangkok 10140 Thailand.

Tel : (66) 2427 0088

Fax : (66) 2871 1378

Website :