L&E moves from MAI to SET, plans greater footprint

Meanwhile, L&E’s LED (light-emitting diode) bulb factory is under construction and should begin production in the second quarter of next year, doubling the company’s current annual output of 5 million units. 

L&E is looking for opportunities for business acquisitions and/or joint-ventures in Asean next year. 

This year, the company projects a 5.8-per-cent rise in net profit thanks to higher sales and continuing cuts in production costs.   

Chief executive officer Pakorn Borimasporn said the company had moved from the Market for Alternative Investment (MAI) to trade on the Stock Exchange of Thailand in the Consumers Products (Home Office Products) sector. The reason for moving to the main bourse was to boost its reputation and to attract institutional investors and mutual funds, both local and foreign. 

Previously, potential investors were hampered by various limitations, he said. 

Pakorn said the company had decided to pursue the consumer market aggressively, aiming for a 20-per-cent share in three years. It has started working on advertising and brand building to increase consumers’ awareness of L&E products. The company believes that the consumer segment will bring higher sales growth, building on its current reputation as the market leader in the business-to-business segment.

When the new LED bulb factory begins full production in the second quarter of next year, it will add about 5 million more units per year in output for a total of 10 million units annually. 

The company plans to bid for two more projects this year, Nonthaburi Bridge and Phuket Airport, worth Bt40 million to Bt50 million each. For this year, the company will earn 70 per cent of its revenue from another project worth about Bt900 million. 

L&E’s Asean market expansion for 2015 is likely to be in the Philippines and Indonesia because of the large size of those markets. The company has had opportunities to acquire businesses or establish alliances or joint ventures after entering those markets via local distributors. As for Myanmar, the company has set a target of 10 per cent of that market in three years, from the current 3-4 per cent. 

L&E expects 5.8 per cent higher net profit this year on a stable revenue projection and continuing cost-cutting. 

The fourth quarter is usually the best time of the year for this type of business. Delayed project revenue from the third quarter will also be recognised in the final quarter. 

Prapan Charoenprawat, SET senior vice president and president of the MAI, said L&E’s move to the main bourse was the 18th since the MAI’s establishment and the fourth this year. The MAI and SET are sibling markets, so such shifts do not constitute a problem for the secondary bourse.

Currently 20 per cent of MAI-listed companies could trade on the SET if those firms decided to make the shift. However, this is something MAI-listed firms should consider carefully, as being a large company on the MAI is not the same as being one of the 500 SET-listed firms, in terms of interest to investors, Prapan said.