▪ The Cambodia Securities Exchange Index (“CSX-Index”) slightly decreased by 0.4% week-over-week (“W/W”) in USD-terms for the ending trading week on 3 June 2022, closing at the 507 level. The average daily trading value is about USD205,800 vs. USD351,000 for the previously reported week.

▪ The top performers were the Taiwanese garment manufacturer, Grand Twins International (Cambodia) Plc (GTI: +0.5% W/W), and the largest deep seaport in Cambodia, Sihanoukville Autonomous Port (PAS: +0.4% W/W). Meanwhile, the top laggard was the only bourse-listed special economic zone developer, Phnom Penh SEZ Plc (PPSP: -0.8% W/W).

▪ Cambodia’s stock market capitalization is about USD1.8 billion, accounting for 7.0% of total GDP in 2021. The current market cap-to-GDP is relatively low compared to its peer countries, which implies that the Cambodian stock market is in the under-development stage and has lots of room to grow. However, the lack of supply-side, in terms of the number of listed companies and the limited liquidity in the market, continues to be the main barrier for investors domestically and internationally.

▪ Pan Group to raise USD67.5 million for its acquisitions. Vietnamese agricultural and food company PAN Group aims to raise approximately USD67.6 million via a two-for-one rights offering of 104.4 million shares to finance the acquisitions of several agricultural and seafood firms. After Q2/2022, Pan Group plans to spend around USD35.6 million to raise its ownership at five (5) subsidiaries and affiliates over three years. The company would spend about USD18.3 million on acquisitions as well as USD2.4 million to expand infrastructure and production at its subsidiary Lafooco. The remaining USD12.3 million will be utilized for short- and medium-term investments and repayments of debts.

▪ KDC plans to raise capital through the sale of its treasury shares. Kido Group (HOSE:KDC) has approved the sale of more than 28 million treasury shares, or 10.1% of its total share issuance. The sale proceeds will be used to expand the business and increase its production capacity. The treasury shares will be traded via the matching or put-through method. KDC is currently trading on a rising price trend, with a share price appreciation of 27% over the last two (2) weeks. (Note: In Q1/2022, KDC reported a negative earnings growth of 10% Y/Y despite its revenue rising by 24% Y/Y.)

▪ PWSA to construct a 5,000 cubic meter water plant near Phnom Penh SEZ. The Phnom Penh Water Supply Authority (CSX:PWSA) to develop a water treatment plant in the Boeung Thom area, near Phnom Penh Special Economic Zone (CSX:PPSP), with a capacity of 5,000 cubic meters per day. The project will commence construction in August or September this year and is expected to launch in Q2/2024. The new water treatment plant would help provide clean water to people in the Pleung Chhes Rotes commune, which currently do not have access to clean water. In Phnom Penh and surrounding areas (i.e., Takhmao city and Kandal province), the total water consumption is currently over 800,000 cubic meters per day, but PWSA only supplies 600,000 cubic meters per day.

▪ THBC hands over USD64 million to Lao government. Theun-Hinboun Power Company Limited (“THPC”) contributed approximately USD64 million to the government budget. Of which, the company paid about USD18.7 million in corporate income tax and USD24,055 in personal income tax to the Tax Department. At the same time, THPC also paid USD6.5 million worth of royalties’ fees to the State Asset Management Department of the Ministry of Finance. In 2021, the company issued a dividend payment of USD38.7 million to the Lao government. Since its inception, THPC has contributed a total of USD711.5 million to the state budget through dividends, taxes, and royalties.

▪ Non-rice agricultural exports rose 4.3% in the 5M2022. According to the Ministry of Agriculture, Forestry, and Fisheries, Cambodia exported 3.2 million tons of agricultural products (excluding rice) in the first five months of 2022, showing an increase of 4.3% Y/Y. The exports brought in a revenue of nearly USD1.4 billion. The ministry noted that only four (4) categories of agricultural products recorded positive growth, including cassava, tobacco, soybeans, and assorted vegetables. Meanwhile, the other categories saw a slight decline, of which most of them are exported to China. In addition, Cambodia’s agricultural sector faces a lack of cold-storage facilities and rising rental prices while the import restrictions in China have triggered a general decline in exports of processed and packaged products.

▪ International arrivals rose nearly 192% in 4M2022. According to the Ministry of Tourism, a total of 241,485 foreign arrivals were recorded in Cambodia over the first four months of 2022, showing an increase of 192% Y/Y. Of which, inbound air arrivals represented 55% of total arrivals, which was a significant increase of 244% Y/Y. During the aforementioned period, Vietnam was the main origin of inbound travellers constituting 30.9% of total arrivals, followed by Thailand (20.8%) and China (6.4%). Despite a resurgence in the number of travellers, the arrivals remained lower than its pre-covid corresponding period.

▪ USD221 million of SCFS II loans issued to 1,834 businesses. According to the state-owned Small and Medium Enterprise Bank of Cambodia (“SME Bank”), a total of 1,834 SMEs nationwide have received loans through the SME Co-financing Scheme Phase II (“SCFS II”). As of 31 May 2022, the loan disbursement under the scheme has reached USD221 million, equivalent to 92% of the total budget. The priority sector (i.e., food processing, agriculture, etc.) accounted for 43% of the total disbursed loans. (Note: The first phase of the Co-financing scheme was initiated in 2020 with a total fund of USD100 million. The budget was later increased given that SMEs need additional financial support.)

Source:

1. VnExpress – PAN Group plans rights issue to raise $67.5 mln for acquisitions
2. The Saigon Times – Kido plans to offload entire treasury shares
3. Construction & Property News – PPWSA plans to build a 5,000 cubic meter water treatment plant near Phnom Penh SEZ
4. Vientiane Times (09.06.22) – THPC hands over profit tax, dividend, royalty fees to government
5. The Phnom Penh Post – Non-rice agri exports rise 4.3%, but most items slide
6. The Phnom Penh Post – Foreign air arrivals soar 244% in Jan-Apr
7. The Phnom Penh Post – $221M of SCFS II loans issued to 1,834 businesses

Source: Forte Capital