TRT high voltage and transforming to higher profits!

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Company Visit

TRT on high voltage and transforming to higher profits !  

Here is an original member only article which I wrote up in late June ‘09, after visiting this company in person back then. (Tirathai Public Company Ltd.)

TRT (6), is a MAI exchange listed stock which has risen about 10% since, well underperforming the SET index but by a factor of double outperforming the MAI index.

My call today to all our registered users, and for the record its the first stock here reviewed under the new is that TRT has some catch-up warranted due to continued strong earnings momentum besides too low valuation.

I view it as a timely choice and rate it now with a strong buy view. This on a leading company in its field, with strong fundamentals and unduly low valuation besides high dividends. The company also will likely yield far above average in dividends next year. The current economic rebound will help TRT to even higher profitability and so I view my earnings estimate to low. As since the below report TRT has reported solid/impressive 2 q earnings. I will be re-visiting TRT in late September.

The first six months showed a more then doubling TRT’s net profit from 0.33 per share last year, to 0.66 this year. The 2 Q. showed a 32% increase from 0.19 to 0.25 with equally impressive profit margins. If the company does no better for the second half of this year, as it did for the first half the earnings would/should grow to say 1.22, or a year 2009 p/e of only 4.9! My own estimate is for TRT to earn 1.30 per share this year, making it one of the lower valued stocks on the MAI. This is not warranted.

There are some warrants outstanding (issued in March, see below) but these don’t expire until 2011, so no dilution until then.

Here is TRT’s web site:

Here is TRT's recent MAI presentation: 

TRT explains its second Quarter results, as you see revenues also increase nicely as well as profit margins:

"Clarification of Change in Operation Results excess 20%

Attention : The President of the Stock Exchange of Thailand

Further to the submission of the financial statement for the first six

month to 30.6.2009 of Tirathai Public Company Limited as of 30.6.2009 to Stock

Exchange of Thailand on 14 August 2009, the Company would like to report that

the net profit of the first six month to 30.6.2009 is equal to 138.47 Million

Baht, increased by 72.42 Million Baht or representing 109.6% compare to the

same period last year and the net profit for the 2nd quarter 2009 is equal to

49.77 Million Baht, increased by 12.26 million Baht or representing 32.68%

compare to the same period last year which is excess 20% change in operating

results as per the following reasons:

1. Total revenue for the first six months to 30.6.2009 is equal to

1,276.74 Million Baht, increased by 340.7 Million Baht or representing 36.4%


2. Gross profit margin is at 26.8% or representing 4.05% increase.

3. Selling and Administration Expense including Management Remuneration

are totally of 153.74 Million Baht or representing 20.99% increase due to

increase in volume of sales as normal course of operation.

Please be informed accordingly.

(Mr.Upakrom Thaweephoke)

Executive Committee and Company Secretary"

Below is the original member report, available for free to all registered users:

Here is the direct link to that original article, in case some of the URL’s are broken:


June 23, 2009.


TRT is not in the tourism, real estate or import/export business… its business is stable and not depended much at all around Thai politicians, tourists, nor vulnerable to raw material or oil prices fluctuations. TiraThai Transformers, public company. 

Leader in agrowth business which is not slowing down.

I visited TRT (5.40) on June 12 and came away excited. Here is another quality growth company at a below average p/e -and above average dividend yield.  The recent stock split and issue of free warrants should in time increase trading volume and market capitalization. Insiders own a good portion of the shares and the 2008 annual report is comprehensive as it is impressive and its both in Thai and English language. Unfortunately there are no Thai broker research reports in English language available. 

You can the MAI’s summary of TRT at this link:

Here you can see their 2 Q. earnings report:   here

The company was founded in 1987 and is a leader in what it does, which is manufacturing of all sizes of electric transformers. TRT is the largest manufacturer of electrical transformers in the country supplying to major industrial plants and buildings, and contractors on electrical work.

They also sell their products to customers in many countries, such as, Japan, Singapore, Philippines, Malaysia, Laos, Myanmar, Cambodia and Vietnam.

All together, TRT exports to some 25 different countries. Exports are about 1/3 of total sales, government contracts are about another 1/3, and private in Thailand represents the remaining 1/3. Hence this company is broadly diversified by client type, industry and through 


Because their transformers are 100% made to order, the company does not incur any raw material cost increase risks.  80% of TRT’s costs, are raw material. The company has a relative short delivery time/back log of 6-12 months, and expects revenues to increase to 2.6 Bill this year, up from 2.1 Bill last year.

The 1 Q. net profit margin for 1 Q. ’09 was an impressive 13.1%, but the company projects over time net profit margins to be around 9%. If, I assume a profit margin averages of 10% for this year, I come to a 260 mill. net profit, up from 203 mill of last year.

The 1 Q. ’09, net profit was reported at 88.7 mill. Baht and the company reports no effects seen, due to the global economic crisis. Hence, I think there could be upward surprises on the net profit projection this year. When I visited the company the parking lot was overflowing, the meeting rooms full of class attendees on some seminar and the place seemed humming. I ended up getting so engulfed in it all, I missed my plane connection that Friday afternoon.

TRT has 202 million shares outstanding, so my earnings per share estimate for this year is 1.30 per share, so the p/e is only 4.2.  Note however that at the end of May ’09, TRT issued new warrants to existing shareholders, to the total diluted shares outstanding, post conversions of these warrants, would by then increase to 280 mill. (at the ratio of 3 ordinary shares, to 1 warrant).

Since these warrants do not expire for 2 years, the main dilution effect on earnings and dividends are not until year 2011.  The last exercise date will be on 27 May 2011, at the price 3 Baht per share. TRT is another choice company to be included in my model portfolio.

Fact is, Thai electricity demand keeps growing annually between 5-6% (see TRT business overview) and so the need for multiple transformers, starting at the power plants, all the way down to the end user, all are on the increase. Further, life expectancy of transformers is around 30 years -and so the company will benefit in the longer time frame from the transformer replacement business as well. Yet, for now, it can hardly keep up in demand for new ones.  Global recession? But not for TRT.

As the record shows, in recent times TRT’s business is brisk, the dividend yield relatively high and yet the p/e ratio, well, all below the MAI’s exchange averages.

For further information and better understanding of TRT, I urge all to look at the recent investor presentation here:

Best Regards,

Paul A. Renaud.


Here is some dated broker research on TRT, to show you how thing evolved since.