With Ticon up 75% what is one to do now?

More prudent member investors may now go to a less then a fully loaded-up portfolio of only Ticon, stricly as a diversification measure and its price rise.  Here is one such related idea which got my attention.

With Ticon settling above 10 Baht a share currently, many have written to me "thank you…and what next etc".  Before this time I refused such "what next" inquiries, firmly believing this stock would tilt further-up and firmly so here stating that it remains my number one pick, so why look elsewhere.  I refused to get sidetracked.

At this time I might be tempted to start reducing my view/rating on Ticon (10.5) to "a buy", from my previous "strong buy" opinion.  But only so because of the hefty 75% price rise since I here first pounded the table on.  As a profit never taken is no profit.  Hence, some prudent investors may now go to a less then a fully loaded-up portfolio of only Ticon as I so widely before felt -and here stated regularly since October 27 '04.

I do still firmly think this prime choice selection is worth more. Ticon will yield an impressive dividend yield and one above expected/targeted in the super bullish report just published this week by CNS (NOMURA), where the target price expected for Ticon is stated at 19.55!  This is a lengthy very good report but only published in the Thai language.

For those of you whom have taken my view to heart (and agreed for themselves that one should have maximum exposure on Ticon) may want to start looking at what to do with some of the unrealized but tempting profits made on Ticon.  At first I was thinking of maybe TNX, its ok… , but today I share an upbeat view of a choice below.

Rojana Industrial Park, (ROJANA 8.25) is a company in a similar field but with some important besides attractive real differences. Because this firm sells utilities and electricity to such industrial parks (also back to EGAT) it has perhaps a more conservative twist.  I do like Rojana better then Hemraj, for example.

You can see a description of Rojana at their web site, http://www.rojana.com/about.html

This stock at 8.25 Baht per share is trading around 11 times earnings, which is a slight discount to averages of the property sector where it is listed.  Based on two Thai language bullish research reports of recent that I have seen the earnings per share forecast for this is year is around 0.85 to 0.90 Baht per share.  The yearly dividend projection stated is attractive at around 8% on the current stock price. This does include some expected benefit from Ticon (see below).

What caught my eyes (and maybe yours), is that Rojana owns 18% of Ticon's common, or 84 million shares and their average cost is only 4 Baht per share.  They acquired this block mostly form Hambrech and Quist, an investment boutique in California, USA which may well bite their teeth for having sold them their lot cheap, a couple of years ago. Obviously they were not ts.com members as I here have made here postitive comments on Ticon since 2003.

The expected Ticon dividend income alone to Rojana, this year, could add about 0.10 Baht per share to the bottom line.  The capital gain say of currently 6 Baht per share comes out to about 500 million Baht or some 0.60 per share of unrealized gains, solidly sitting on their books.  Obviously if  Ticon shares move even higher, as I fully expect, the gain to Rojana moves higher in tandem.  Rojana has 900 million shares outstanding and I think the current earnings projections by analysts may be a bit understated.

My view is that Rojana is the more conservative "cousin" to now "hot" Ticon. From what I can tell (and I did check a some) this company has a good reputation, solid management and good long term business prospects besides an expected high dividend payout, close to matching Ticon's. 

Hence with this stock trading today at 8.25, as of the close of February 9, I am tempted to think that those whom feel they missed out on Ticon or desperately want an alternative i.e.,  take some money off the table, Rojana may well deserve your attention and savings Baht.

Note also that  Rojana is a major Industrial Park provider and  has as well begun a 10 year investment program projected to cost over $1 billion in the Chinese city of  Changzhou.  Rojana is the first Thai industrial developer to expand into China, I like their Japanese affiliation in this.

From their web site:

"Rojana Industrial Park – Changzhou, China, is co-owned by a joint venture between Rojana Industrial Park Public Co., Ltd. of Thailand and Sumikin Bussan Corporation of Japan with the total investment of 5,000 million bath, covering the area of 10 Sq. Kilometer (about 5,500 Rais)."     (One Rai is 1,6000 square meters).

"Changzhou city is an ancient cultural city with over 2,500 year of history.  Now, it is also a newly booming industrial city with modern infrastructure and rapidly increasing development.  Changzhou’s population is 3.41 million.  The city area is 4,375 Sq.Km, and is located  half way between Shanghai and Nanjing in the booming Shanghai delta region of China's east coast.  Its geographic location and infrastructure is excellent for industrial investment with access to a large and talented worker pool, nearby universities and technical schools and a well developed base of sub-suppliers and service providers."

"As one of the pilot cities for national comprehensive economic reform in the Yangtze River Delta Area, Changzhou won the title of one of the top 50 cities with the  strongest economic strength and one of the 40 best cities with most favorable investment environment in a recent poll."

Rojana Industrial Park in China can provide you convenience and a highly competitive location for your industrial investment in China."

Best Regards,
Paul A. Renaud.
www.thaistocks.com