Keypad maker to enter SET next month

       Electronics component manufacturer Stars Microelectronics (Thailand) Plc aims to float on the Stock Exchange of Thailand next month to serving the rebound in global electronics industry.
       The Thai-owned firm, which supplies keypads to leading brands such as Blackberry and Google T-Mobile, expects its net profit to rise by 15% this year on revenues exceeding 12 billion baht.
       SMT would become the first locally owned electronics company to list in the Thai bourse for five years, said cofounder and chief executive Polsak Lertputipinyo.
       "After the electronics component market dropped sharply in the final quarter of 2009 and the first three months of this year, we have seen the demand rebound in the second quarter," he said.
       The manufacturer saw positive growth resume for about two months of the second quarter after a 10-15%year-on-year decline in the first three months.
       First-half revenue totalled 4.59 million baht with a net profit of 115 million baht, both up 10% over the same period of 2008.
       From 2004 to 2008 SMT's revenue grew by an annual average of 40%,from 4.46 billion baht to 12.13 billion.Net profit jumped at a cumulative annual rate of 65%, from 45 million baht to 201 million.
       Some 92 million shares, or 25% of SMT's registered capital, will be sold in the initial public offering (IPO) in September to retail and institutional investors.
       The proceeds will be used to repay debt and to financially restructure the firm to achieve a lower net interestbearing debt-to-equity ratio, which currently stands at 1.2 times.
       Current earnings per share is 0.42 baht, with a return on equity of 23.1%.SMT has a 600-million-baht credit facility for capacity expansion and to serve 150 million baht in additional investments this year.
       SMT's 2.7-billion-baht manufacturing plant in Bang Pa-in, Ayuthaya, is running at 60% of maximum capacity for exports. The facility has annual capacity of 80 million microelectronics modules assembly (MMA) components and 700 million integrated circuit (IC)units.
       Mr Polsak said SMT has a 30% share of the Thai smart phone market and 10% of both laptop mouse pads and hard-disk drive control board.
       Tisco Securities, SMT's financial advisor, said the electronics industry is one of the sectors which has rebounded quickly on signs of a global economic recovery. By jointly developing new products and technologies for clients the Thai electronics firm will be able to enjoy higher margins and win new contracts to improve its shipments.
       In 2010, SMT plans to launch new airbag pressure sensors targeting luxury car brands, such as Mercedes, BMW and Audi, which gross margin is as high as 50%. Handheld laser projectors for cell phones will be introduced to boost its MMA business' margins which now stand at 20%.
       The company can continue to increase its profit during the global recession. Investors should view SMT as a potential stock for alternative investment, said Tisco.