Ticon alarm bells ringing.

PaulRen's picture
Company Visit

October 16, 12:35 PM, Bangkok. (Revised at 4:40 PM)

This morning in our member lounge I earlied today made some more cautious comments on Ticon which opened the morning  session just below 10.  I like the company long term. But now question its further expansion ambitions into year 2009 . Ticon will shortly raise much cash from the planned TFUND’s next big selling tranche to their 20%+ owned successful property fund.

Asia remains ever more the “factory of the West” and with the recession now there a foregone conclusion major developed country's slow down is now in the works. We see this already in the electronics sector, and from Japan, Ticons' biggest single country customer.  Surely some will so now rent rather then buy, and with that Ticon is the more defensive play. That is way I picked it for so long in the fist place. In the short term the only thing that will turn this stock around is the company's recognition a slow down will affect them, so share buy back or hoarding the cash is the way forward.  Not more expansion.  These are just my views, as always.

One thing that is starting to concern me some with Ticon is this companies' determination to just keep expanding into 2009 with all/most the money they will raise by selling another TFUND tranche in 4 Q. TICON does not seem not bothered by a global recession clearly brewing into next year? My own view, stated to them soo many times, is the company should be buying back its own shares like so many other co. are now doing; this rather then seemingly move full- steam the "we build and they come rent" disposition.  I have here with you and to the company for some time expressed my frustration in them not announcing a share buy back program -with some of their upcoming TFUND proceeds.

While it is amply hinted the dividend is assured for early next year, I wonder from there on?  Will the global developed country induced recession hit Thailand’ export factories?  And perhaps more so then Ticon is willing to admit or insure itself on.

The stock seems cheap enough below 10 and a major disappointment to us all of late, like so many others.  All mostly attributed to the sharp unprecedented US/western induced financial tsunami.  I wonder if Ticon stock price going to be "dead money" for a while and how their expansion can continue under the current global recessionary circumstances?  I instead now prefer more special niche earnings growing firms like my other choices then mid cap Ticon whose continued expansion into '09 looks increasingly risky. Of course I could be wrong in that the cheap price of now 9.50 reflect this already.

Best Regards,

Paul A. Renaud.