Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

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Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

Total Access Communication / Equity Bottom-Up

<p><strong>We expect DTAC to report 3Q21 recurring net profits of Bt1.4bn (-1.3%YoY, +3.6%QoQ), with the QoQ rise arising from decreased marketing costs.</strong></p><p>• Expect flat QoQ 3Q21 revenue at Bt20bn, (+5.0%YoY, +0.1%QoQ), due to stunted mobile subscriber base growth (+3.8%YoY,+0.8%QoQ) from weaker consumer spending</p><p>• Expect 4Q21 to report lowest net profit, which has consistently been the case for the past 3 years from seasonal increase in handset device sales, which have historically been loss-making (3yr handset-device gross margin: -125%)</p><div>• Expect the recent price surge to eventually drop back to pre-rumor prices at around Bt32.00 until telecom companies announce their involvement in the 3500 MHz spectrum auctions</div><div>
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</div><p><strong>We maintain SELL rating and target price of Bt32.70, derived from DCF, implying 18.2xPE’22E, which 24% below the Thai telecoms sector 23.9xPE’22E. DTAC’s large discount is justified considering the company has been losing market share over the past few years, owns a smaller spectrum portfolio relative to its competitors, and has an uncertain outlook in the 5G era.</strong></p>

We expect DTAC to report 3Q21 recurring net profits of Bt1.4bn (-1.3%YoY, +3.6%QoQ), with the QoQ rise arising from decreased marketing costs.• Expect flat QoQ 3Q21 revenue at Bt20bn, (+5.0%YoY, +0.1%QoQ), due to stunted mobile subscriber base growth (+3.8%YoY,+0.8%QoQ) from weaker consumer spending• Expect 4Q21 to report lowest net profit, which has consistently been the case for the past 3 years from seasonal increase in handset device sales, which have historically been loss-making (3yr handset-device gross margin: -125%)• Expect the recent price surge to eventually drop back to pre-rumor prices at around Bt32.00 until telecom companies announce their involvement in the 3500 MHz spectrum auctions
 
We maintain SELL rating and target price of Bt32.70, derived from DCF, implying 18.2xPE’22E, which 24% below the Thai telecoms sector 23.9xPE’22E. DTAC’s large discount is justified considering the company has been losing market share over the past few years, owns a smaller spectrum portfolio relative to its competitors, and has an uncertain outlook in the 5G era.

DTAC: Expect 3Q21 Earnings to Rise Slightly QoQ

<p><strong>We initiate coverage of DTAC with a SELL rating, based on a target price of Bt32.70, derived from a DCF valuation (WACC of 7.9%, terminal growth of 2%). Our valuation implies a 16.8xPE’22E, which is 29% discount from Thailand Telecom sector at 23.5x.</strong></p><p><strong>The story:</strong></p><p>• Declining competitive position and profitability</p><div>• Failing to keep pace with 5G momentum</div><div></div><div>• Declining trend in the next 3-years earnings</div><div></div><div>• Low valuations justified</div><p></p><p><strong>Risks:</strong></p><p>• Intense competition in a saturated telecommunications industry</p><div>• New mega competitor after TOT and CAT merger</div><div></div><div>• Changes in NBTC’s board and regulatory policies</div>

We initiate coverage of DTAC with a SELL rating, based on a target price of Bt32.70, derived from a DCF valuation (WACC of 7.9%, terminal growth of 2%). Our valuation implies a 16.8xPE’22E, which is 29% discount from Thailand Telecom sector at 23.5x.The story:• Declining competitive position and profitability• Failing to keep pace with 5G momentum• Declining trend in the next 3-years earnings• Low valuations justifiedRisks:• Intense competition in a saturated telecommunications industry• New mega competitor after TOT and CAT merger• Changes in NBTC’s board and regulatory policies

Thailand

Total Access Communication Public Company Limited provides cellular mobile telephone services under WorldPhone 800 and WorldPhone 1800 brand names throughout Thailand. The Company also sells cellular handsets and other telecommunications equipment through its WorldMedia network of retail stores.

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Total Access Communication (DTAC TB)

DTAC: Expect 3Q21 Earnings to Rise Slightly QoQ

e expect DTAC to report 3Q21 recurring net profits of Bt1.4bn (-1.3%YoY, +3.6%QoQ), with the QoQ rise arising from decreased marketing costs

Pi Securities PCL, Thailand

DTAC: No Growth with Uncertain Prospects

We initiate coverage of DTAC with a SELL rating, based on a target price of Bt32.70, derived from a DCF valuation (WACC of 7.9%, terminal growth of...

Pi Securities PCL, Thailand

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