TPIPL - Strong earnings growth

After meeting with TPI Polene (TPIPL) recently at an analyst’s meeting, The core business of TPIPL is viewed to continue to strengthen this year. TPIPL is expected to benefit from increased government spending on infrastructure projects during 2004-2009, including the Suwanaphum International Airport (NBIA), mass transit projects, the New City in Nakhon Nayok, and installation of new gas and water pipeline networks. The prospects over the next two years look very promising given robust domestic cement demand, which in turn is expected to lead to higher cement prices and expected further rises in world petrochemical prices after strong gains in 2003.

After the PO, priced at Bt37 with a total of 300 million new shares and a debt repurchase program, the company’s total debt will fall from Bt46bn to Bt37bn, reducing the debt to equity ratio from 2.1x to only 1.0x and allow the company to book extra gains of US$82.9mn or Bt3.3bn. TPIPL book value per share also rises to Bt45.2 from Bt43.6.  TPIPL will have remaining debt and accrued interest of Bt35bn that is in the court mediation process. The company hopes to gain another ?hair cut’ benefit from this debt and accrued interest mediation. In addition, TPIPL plans to clear accumulated losses by the second quarter this year and expects to pay a dividend by next year.