Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

Thematic (Sector/Industry)

In this review, we highlight a few developments in the Thai telecom industry:<ul>
<li>
5G bidding results. The NBTC sold Bt100bn of 5G spectrum to 5 rival bidders on Feb 16 with AIS taking the lion's share. True has some blocks on the core 2.6GHz spectrum, while an over-cautious DTAC stands to lose subscribers in the near future.</li>
<li>
Boost from related products. The listing of Copperwired last year adds urgency to the accessory competition just as Apple Watch's global sales exceed the entire Swiss watch industry combined.</li>
<li>
China overhang. iPhone 11's lower price has improved its sales outlook here. Yet, sales of Apple-based gear could be held back by its high reliance on China-based manufacturing and the disruption surrounding those facilities.</li>
<li>
Thailand's streaming wars heats up. As myriad reasons begin to favor video streaming in Thailand, both True Corp and AIS Play start to offer more compelling options to customers.</li>
</ul>

In this review, we highlight a few developments in the Thai telecom industry:

5G bidding results. The NBTC sold Bt100bn of 5G spectrum to 5 rival bidders on Feb 16 with AIS taking the lion's share. True has some blocks on the core 2.6GHz spectrum, while an over-cautious DTAC stands to lose subscribers in the near future.

Boost from related products. The listing of Copperwired last year adds urgency to the accessory competition just as Apple Watch's global sales exceed the entire Swiss watch industry combined.

China overhang. iPhone 11's lower price has improved its sales outlook here. Yet, sales of Apple-based gear could be held back by its high reliance on China-based manufacturing and the disruption surrounding those facilities.

Thailand's streaming wars heats up. As myriad reasons begin to favor video streaming in Thailand, both True Corp and AIS Play start to offer more compelling options to customers.


Telecom Review (Feb 2020): 5G Bidding, Apple Watch Surge

Equity Capital Markets

Copperwired was slated to IPO on May 3, but for some reasons, this has been delayed. We value the stock at Bt2.1/sh using DCF method and Bt3.6/sh using relative valuation. They operate the second largest chain of iStudios after rival Com7. Currently, they operate 18 .Life (third-party) stores, 5 iStudios/iBeat stores, and 39 iServe branches for maintenance. Apart from this, it should be noted that:  <ul>
<li>
Business expansion. It currently sells 2,000 different products from 200 brands at its .Life stores, is building six more of these, and refurbishing 5 stores at a high cost of Bt100m. Most of these stores are premium standard. Its revenues have grown 12.7% on average in the last 3 years, but net income is now five times bigger than what it used to be. Impressive!</li>
<li>
Competitive landscape. As mentioned in earlier review, this is already a crowded field. Its closest competitor is Com7, but there are also other chains that don't necessarily focus on the Apple brand such as Jaymart, SDC (formerly Samart i-Mobile), and the AIS' Telewiz Shop.</li>
<li>
Ample risks. The high growth rate also comes with high risks that may have not materialized yet, such as product obsolescence, potential dilution, goods damage, and potential dilution...to name a few. On top of this, reliance on Apple is a risk it shares with rival Com7.</li>
<li>
IPO details. Copperwired will be underwritten by KT Zmico on a firm basis for 160m shares, which accounts for 26.7% of total shares outstanding. Founder Narong Ingtanet will continue to be majority holder post-IPO.</li>
</ul>

Copperwired was slated to IPO on May 3, but for some reasons, this has been delayed. We value the stock at Bt2.1/sh using DCF method and Bt3.6/sh using relative valuation. They operate the second largest chain of iStudios after rival Com7. Currently, they operate 18 .Life (third-party) stores, 5 iStudios/iBeat stores, and 39 iServe branches for maintenance. Apart from this, it should be noted that:  

Business expansion. It currently sells 2,000 different products from 200 brands at its .Life stores, is building six more of these, and refurbishing 5 stores at a high cost of Bt100m. Most of these stores are premium standard. Its revenues have grown 12.7% on average in the last 3 years, but net income is now five times bigger than what it used to be. Impressive!

Competitive landscape. As mentioned in earlier review, this is already a crowded field. Its closest competitor is Com7, but there are also other chains that don't necessarily focus on the Apple brand such as Jaymart, SDC (formerly Samart i-Mobile), and the AIS' Telewiz Shop.

Ample risks. The high growth rate also comes with high risks that may have not materialized yet, such as product obsolescence, potential dilution, goods damage, and potential dilution...to name a few. On top of this, reliance on Apple is a risk it shares with rival Com7.

IPO details. Copperwired will be underwritten by KT Zmico on a firm basis for 160m shares, which accounts for 26.7% of total shares outstanding. Founder Narong Ingtanet will continue to be majority holder post-IPO.


IPO Radar: Copperwired, the #2 Player in IStudiosn

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Copperwired (COPPW TB)

Telecom Review (Feb 2020): 5G Bidding, Apple Watch Surge

In this review, we highlight a few developments in the Thai telecom industry: 5G bidding results. The NBTC sold Bt100bn of 5G spectrum to 5 rival...

Athaporn Arayasantiparb, CFA

IPO Radar: Copperwired, the #2 Player in IStudiosn

Copperwired was slated to IPO on May 3, but for some reasons, this has been delayed. We value the stock at Bt2.1/sh using DCF method and Bt3.6/sh...

Athaporn Arayasantiparb, CFA

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