On January 8, the stock prices of RS Public Company Limited (RS) and RSXYZ Public Company Limited (formerly GIFT) experienced a second consecutive day of decline. RSXYZ closed at 0.80 THB per share, down 0.35 THB or 30.43%, while RS closed at 2.60 THB per share, dropping 1.14 THB or 30.48%.
Analysts at Krungsri Securities attributed RS's ongoing decline to poor operational performance, mounting financial risks, and concerns about margin account collateral. In Q3 2024, RS reported a net loss of 301 million THB, reversing from a 71 million THB profit in Q3 2023, with revenue declining by 37% year-over-year and 20% quarter-over-quarter due to weak Commerce and Entertainment divisions. RS is expected to continue reporting losses in Q4 2024.
RS's financial position appears fragile, with interest-bearing debt totaling 3.84 billion THB as of Q3 2024, including short-term loans and long-term debt, the latter with 502 million THB due by September 2025. Its debt-to-equity ratio stands at 1.5, while cash reserves amount to only 306 million THB.
Other concerns include forced sales due to margin account collateral. Reports indicate 222 million RS shares, representing 10% of total shares and 60% of retail investor holdings, are pledged as collateral, raising risks of forced liquidation.
Additionally, in November 2024, RS canceled its planned investment in RSXYZ due to significant changes in the latter’s stock value, further complicating restructuring efforts. RS executives also sold shares multiple times late in 2024, which has negatively impacted investor confidence.
In related news, SCM’s stock decline is linked to personal financial transactions involving its executives. Forced sales occurred after a foreign partner requested repayment of short-term loans, further affecting SCM’s share value.