An exporter at a low valuation

Bangkok, July 25, '01 12:35 PM.

 Short Research Comment on a mid cap I like at current prices:

STPI (14)

We visited them yesterday and yes, like the story. They are in the right kind of business

and with 80% exports, Baht weakness shielded. Previously supplying the domestic

industry STPI has turned itself into a successful exporter.

STPI provides Steel & structures for mostly the booming:

Oil Service

Utilities

Oil & Gas.

Mainly Exports to:

Japan

Europe

North Africa

USA

The Chairman is former deputy finance minister Khun Chavarat Charnivirakul. ('96 to '99). The Family owns a substantial amount of the outstanding shares.

Sales are set to continue at long term average growth of 18-25%. Global Economist would agree this is the right Industry to be in right now.

Probably setting itself up to pay out dividends starting next year. A truly impressive successful restructuring story with now 0 US$ and just about 0 Baht debt. And when BKK goes ahead with the new Airport, STPI will benefit immensely as most competitors are gone when the past boom went bust.

I think they can earn around 4.20 per share this year and over 5.20 next. Hence the p/e is undemanding and the company should be worth more then the 18 Baht book value, according to Khun Chavarat. STPI shares trade well another reason why the valuation seems too low.

Best Regards to all our valued members,

Paul A. Renaud