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Fitch Affirms Asia Plus Group Holdings at ‘A(tha)’; Outlook Stable

          Fitch Ratings (Thailand) has affirmed the National Long-Term Rating on Asia Plus Group Holdings Public Company Limited (ASP) at 'A(tha)' with a Stable Outlook. At the same time, the agency has affirmed ASP's National Short-Term Rating at 'F1(tha)'. 
          KEY RATING DRIVERS
          ASP's ratings reflect a strong securities franchise and a sound business model relative to Fitch-rated standalone securities firms in Thailand. Fitch believes ASP's sustainable competitive advantages enable the firm to navigate industry-wide profitability challenges, although competitive pressure may heighten its near-term earnings volatility. The firm's high commission fees reflect the depth of its full-service brokerage platform, which in turn benefits from its well-recognised research capabilities and the breadth of its products across several markets. ASP is also well-positioned as a group to continue diversifying its business model away from domestic brokerage. The ASP group has been rapidly expanding its asset-management franchise, while its wealth management and offshore investment services are gaining critical mass among high-net-worth clients.
          Fitch assesses the ASP group on a consolidated basis, underscoring the scale and integration between its operating subsidiaries. Moreover, ASP's ratings highlight its low net adjusted leverage ratio of 1.3x at end-1Q19 (Fitch-rated standalone peers:1.6x-2.6x) and its ready access to banks' credit lines and capital markets. ASP's intra-group liquidity lines also afford it a degree of funding flexibility, allowing timely transfers of funding between the holding company and its operating subsidiaries.
          RATING SENSITIVITIES
          Fitch could downgrade ASP's ratings if profitability pressure facing ASP intensified even further over a prolonged period, although Fitch does not regard this as a base case in light of its ongoing diversification efforts. Conversely, the agency expects limited upside to ASP's national ratings, since ASP is already highly rated compared with other standalone securities firms in Thailand. A challenging operating environment should also constrain the ratings of standalone securities firms at current levels.
          Additional information is available on www.fitchratings.com