Thai beauty pageant’s 900% stock rally defies warning, even beats Miss Universe

BANGKOK: A gravity-defying rally in Thailand’s beauty-pageant organiser Miss Grand International Pcl is finally seen petering out on concerns that the valuation has become overstretched.

The stock has surged more than 900% since its debut at 4.95 baht apiece mid-December, making it the second best-performer of any new listing in Asia Pacific the past three months. It’s now trading at 65 times 12-month trailing earnings, compared with about 17 for the benchmark SET Index, according to Bloomberg calculations.

The bull run prompted the Thai exchange to pause trading in the stock on Friday, the second suspension this week, following other curbs including cash prepayments mandatory for prospective buyers.

The halt came after most investors still shrugged off the previous warning and restriction, with the stock’s combined 44% surge on Wednesday and Thursday.

Miss Grand gained investors’ interest on optimism over growth from product sales and beauty contests after robust profit in 2023, but the share gain has exceeded fundamentals, according to Thakol Banjongruck, an analyst at Yuanta Securities (Thailand) Co.

"Excessive valuation and regulatory risk from the exchange’s tight control will make most investors cautious about the stock,” he said.

Miss Grand still has any major development and information such as joint venture and acquisition that may cause the unusual trading of its shares, it said late Thursday in response to the bourse’s query.

The company reported net income of 119 million baht ($3.3 million) in 2023, a 149% increase from a year earlier. Expansion into the TikTok shop platform and greater use of direct sales channels to widen margins and "almost eliminate intermediary costs” were key reasons for the rise.

Miss Grand started beauty pageants about a decade ago, and has used events and contestants to promote and advertise products to build awareness and sales.

--©2024 Bloomberg L.P.

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