October 30, 2017 OUTPERFORM Indorama Ventures (IVL TB) Share Price: Bt45.75 Target Price: Bt55.0 (+20.2%) Company Update Company Ready to take it all . 65% of newly acquired BOPET is HVA, underscoring healthy EBITDA margins in FY18F onward . M&G’s bankruptcy is an opportunity for IVL to gain more market share in North America . OUTPERFORM, raised TP to Bt55/sh; share price weakness upon weak 3Q17 results is an opportunity to buy IVL could become a major player of BOPET Early this month, IVL signed a share purchase agreement with DuPont Teijin Films (DTF) to acquire 100% stake in their PET film business. This marks an important step for IVL to diversify into PET film used in packaging, industrial, electrical, imaging, and magnetic media. 65% of Naphat CHANTARASEREKUL DTF’s products is ‘thick’ film, which commands the same EBITDA 662 - 659 7000 ext 5000 margin as IVL’s HVA portfolio of automotive and hygiene products. DTF
[email protected] COMPANY RESEARCH | RESEARCH COMPANY is a leading producer of biaxially oriented Polyethylene Terephthalate (BOPET) and Polyethylene Naphthalate (PEN). Their business Key Data comprises of eight production assets in the US, Europe, and China with 12-mth High/Low (Bt) 46.5 / 28.25 global innovation center in UK with annual capacity of 277k tons. PET Market capital (Btm/US$m) 239,957/ 7,205 film uses the same feedstock as PET but the market is small at 4.1m ton 3m avg Turnover (Btm/US$m) 747.8 / 22.5 consumption p.a. We are optimistic IVL could become a major player in Free Float (%) 29.5 this market.