The Fastest Growing Company In Thailand For The Past Decade

 

The Thailand Market has been one of the best performing market for the past decade in Southeast Asia. More impressively, it has been achieved with political instability in the country during the same period of time. This week, we look at one of the fastest growing company in Thailand.

 

Taking on the infrastructure boom

STP & I Public Company Limited (STPI:TB) is a steel fabricator that serve mainly the construction and infrastructure industry. It is also one of Thailand largest piping fabricators and have facilities in most major ports across Thailand. The company fabricates modules for bridges, piping, refineries, power plants, airports, exhibition halls and even high-rise buildings.

 

A shareholder in STP & I Public Company would have enjoyed a return of 3,961% for the past decade with dividend reinvested. The company recorded a revenue of only THB 832 million in FY2004 and grew it to THB 10,3 billion for the past 12 month till Sep-30-2014. It has grew its revenue at about 30% compounded annually for the past decade. Its earnings per share grew more impressively at a rate of 90.2% annually over the same period. The company has completed projects all over the world, including Thailand, Japan, U.S.A and even the Middle East.

 

However, the company does serve the oil and gas sector and investors might be worried about the reduction in capex by its customers. Thus, the share price of the company has fallen from a peak of THB 23.30 per share to the current price of about THB 20.00 per share. The company trades at a price to earnings of 12 times and has a dividend yield of 1.7%. However, investors looking at this company should understand that earnings from a project-based company is lumpy in nature. Investors should focus on the future of the company and not just on its past performance.

 

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All views and opinions articulated in the article were expressed in Stanley Lim’s personal capacity and does not in any way represent those of his employer and other related entities. Stanley Lim does not own any companies mentioned above

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