Company update Mon, Jan 11, 2021

Advanced Info Service ADVANC

Advanced Info Service Bloomberg ADVANC TB Public Company Limited Reuters ADVANC.BK

5G costs pressure 2021F earnings recovery Tactical: NEUTRAL (3-month)

We maintain our tactical recommendation of NEUTRAL with a DCF-based Stock data

TP of Bt220. ADVANC’s share price is unlikely to outperform the market as Last close (Jan 8) (Bt) 184.50 investors are now looking for earnings recovery stocks whereas we expect 12-m target price (Bt) 220.00 Mkt cap (Btbn) 548.62 ADVANC’s earnings to continue to be pressured by rising 5G-related costs Mkt cap (US$mn) 17,533 in 2021F. There will be earnings downside if ADVANC is “asked” by the NBTC to offer free support to the government’s “work from home” effort. Beta L Mkt cap (%) SET 3.21 Expect a soft 4Q20F. We estimate 4Q20F core profit at Bt6.5bn, down 2.5% QoQ Sector % SET 7.55 and 16.8% YoY. Net profit could reach Bt6.9bn as it will book a Bt350mn tax benefit Shares issued (mn) 2,974 from government incentives. We estimate mobile revenue at Bt29.2bn, flat QoQ, Par value (Bt) 1.00 12-m high / low (Bt) 223 / 156.5 but down 8.1% YoY. Weak purchasing power and intense competition continue to Avg. daily 6m (US$mn) 43.87 limit QoQ improvement while YoY growth will be hit by the absence of tourism- Foreign limit / actual (%) 48 / 35 related revenue. On the positive side, subscriber acquisition continues to improve. Free float (%) 36.2 Dividend policy (%) ≥ 70 Fixed broadband (FBB) revenue growth remains strong at 5.0% QoQ and 18.7% YoY to Bt1.9bn, thanks to rising subscribers. However, ARPU is being affected by pricing Price performance competition, though all operators have upped the starting price to Bt399/mth 350 (Bt) from Bt299. Importantly, this is still below the average FBB ARPU of Bt484 as of 300 3Q20. On the handset side, we expect losses of Bt50mn vs a Bt157mn gain in 4Q19 250 200 due to more aggressive handset subsidy for low-end models. SG&A is expected to 150 rise 2.1% QoQ but fall 13.4% YoY to Bt6.2bn; the rise QoQ is seasonal and the YoY 100 ADVANC — Stock Price 50 drop is a result of less activity this year. Based on our 4Q20F, its 2020F net profit ADVANC — Rel. to SET (rebased) 0 will be Bt27.2bn, down 13% YoY. Results will be released on Feb 8. Jul-19 Jul-20 Jan-19 Jan-20 Jan-21 Reiterate our non-consensus forecast. Consensus expects 2.1% YoY growth in Apr-19 Oct-19 Apr-20 Oct-20 Source: SET, SCBS Investment Research net profit to Bt28.5bn in 2021F. We are contrarian, expecting net profit to drop 9% in 2021F due to: 1) lower tourism-related revenue YoY - and this segment brings in Share performance 3% of mobile revenue; 2) added amortization expense of ~Bt2bn (from 5G license); (%) 1M 3M 12M Absolute (2.4) 4.2 (15.4) 3) rising handset loss as ADVANC tries to boost 5G penetration now, when it has Relative to SET (5.8) (14.0) (13.0) competitive advantage over a 5G competitor in the consumer segment. Source: SET, SCBS Investment Research

Possible upside to our forecast. We assume 5G penetration rate at 2.5% in 2021F, working out to ~1mn 5G subscribers. This is in line with management’s target. At this point we estimate ADVANC’s 5G subscribers at over 100k with an ARPU 10-15% higher than 4G. A higher adoption rate than expected would suggest upside to our mobile revenue, which we now expect to grow 4% in 2021F.

Operational update after new COVID-19 outbreak. As ADVANC has been deeply involved in “work from anywhere” since the first COVID-19 outbreak in 1Q20, it will not have to make major operational changes. Hence, its operations are unaffected by the recent return of the pandemic.

Forecasts and valuation Analyst Year to 31 Dec Unit 2018 2019 2020F 2021F 2022F Kittisorn Pruitipat, CFA, FRM Revenue (Btmn) 169,856 180,894 180,324 187,008 193,124 Fundamental Investment EBITDA (Btmn) 74,503 78,987 76,501 77,374 80,422 Analyst on Securities Core profit (Btmn) 29,564 30,881 28,799 26,167 27,833 Reported profit (Btmn) 29,682 31,190 28,538 26,167 27,833 (662) 949 1007 Core EPS (Bt) 9.94 10.39 9.69 8.80 9.36 [email protected] DPS (Bt) 7.08 7.34 6.72 6.16 6.55 P/E, core (x) 18.6 17.8 19.0 21.0 19.7 EPS growth, core (%) (1.0) 4.5 (6.7) (9.1) 6.4 P/BV, core (x) 9.5 7.9 7.1 6.5 5.9 ROE (%) 54.7 48.6 39.3 32.5 31.4 Dividend yield (%) 3.8 4.0 3.6 3.3 3.6 FCF yield (%) 3.9 8.5 (2.4) 4.7 6.4 EV/EBIT (x) 10.2 9.2 10.2 9.9 9.2 EBIT growth, core (%) 6.0 7.2 (5.2) 1.7 4.8 EV/CE (x) 2.7 2.7 2.5 2.5 2.4 ROCE (%) 13.7 15.0 12.7 11.3 11.9 EV/EBITDA (x) 8.7 7.9 8.6 8.4 7.9 EBITDA growth (%) 5.0 6.0 (3.1) 1.1 3.9

Source: SCBS Investment Research

See the end of this report for disclaimer 1

Advanced Info Service PLC

Value proposition ADVANC has the highest market share in Thailand’s mobile telecom space with a 45% subscriber market share. It also has the highest spectrum holdings among other operators. The company currently has 700MHz (15MHz bandwidth capacity), 900MHz (10MHz), 1800MHz (20MHz), 2100MHz (30MHz), 2600MHz (100MHz) and 26GHz (1200MHz). This ensures it can provide good service quality to customers. Business outlook We see its near-, mid- and long-term business as challenging. In the near- and mid-term, weak purchasing power will continue to curtail ARPU upside and the commercial launch of 5G, which will also bring rising costs, making near- and mid-term earnings outlook unexciting. In the long-term, it will be challenged by its 5G business, as we believe key growth driver will be industrial users, where the potential business case is now limited.

Bullish views Bearish views 1. ADVANC is a good defensive play amid high uncertainty 1. Its earnings growth outlook is unexciting over earnings in other sectors.

2. ADVANC has the highest spectrum on hand. This helps it 2. Profitability will be under pressure after starting offer superior network quality compared to peers. commercial launch of its 5G service

Key catalysts Factor Event Impact Comment Latest development NBTC asked telecom operators Negative So far, the NBTC has not offered any to support “Work from home” compensation to telecom operators to support “work from home”. This will be negative to net profit.

Near-term earnings 1Q21F earnings momentum Positive QoQ, Negative Earnings will improve QoQ due to less outlook YoY marketing expense, while YoY will drop due to weak purchasing power and lack of tourism related revenue.

Factors to be aware 5G penetration Positive/Negative We assume ~1mn 5G subscribers for in 2021 ADVANC in 2021F. More 5G subscribers than assume would bring upside to our forecast, as ARPU for 5G is 10-15% higher than 4G and vice versa

Sensitivity analysis Factor Earnings impact TP impact 1ppt change in mobile service revenue 3% Bt5/sh.

Mon, Jan 11, 2021 2

Advanced Info Service PLC

Financial statement Profit and Loss Statement FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Total revenue (Btmn) 155,213 152,150 157,722 169,856 180,894 180,324 187,008 193,124 Cost of goods sold (Btmn) (84,819) (82,992) (92,259) (103,456) (111,899) (112,452) (119,834) (122,628) Gross profit (Btmn) 70,394 69,158 65,463 66,400 68,994 67,872 67,173 70,496 SG&A (Btmn) (20,301) (29,926) (25,220) (26,472) (27,885) (27,948) (30,053) (31,556) Other income (Btmn) 739 568 750 861 846 960 991 708 Interest expense (Btmn) (1,960) (4,236) (5,302) (5,148) (4,777) (6,100) (5,250) (4,750) Pre-tax profit (Btmn) 48,873 35,564 35,691 35,641 37,179 34,783 32,861 34,899 Corporate tax (Btmn) (9,999) (5,175) (5,843) (5,923) (6,209) (5,913) (6,572) (6,980) Equity a/c profits (Btmn) (11) 24 5 (123) (86) (68) (92) (82) Minority interests (Btmn) (2) (23) (1) (32) (3) (3) (3) (3) Core profit (Btmn) 38,860 30,389 29,852 29,564 30,881 28,799 26,193 27,834 Extra-ordinary items (Btmn) 229 277 225 119 308 (81) 0 0 Net Profit (Btmn) 39,089 30,667 30,077 29,682 31,190 28,719 26,193 27,834 EBITDA (Btmn) 71,100 61,263 70,969 74,503 78,987 76,501 77,374 80,422 Core EPS (Bt) 13.09 10.22 10.04 9.94 10.39 9.69 8.81 9.36 Net EPS (Bt) 13.17 10.31 10.12 9.98 10.49 9.66 8.81 9.36 DPS (Bt) 12.99 10.08 7.05 7.08 7.34 6.76 6.17 6.55

Balance Sheet FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Total current assets (Btmn) 38,007 31,899 34,841 34,905 47,142 31,368 34,969 43,681 Total fixed assets (Btmn) 136,082 233,650 240,103 241,961 228,584 259,219 260,930 257,074 Total assets (Btmn) 181,761 275,670 284,067 290,505 289,669 304,633 310,051 315,013 Total loans (Btmn) 65,432 98,958 109,677 109,133 94,044 110,000 105,000 95,000 Total current liabilities (Btmn) 57,533 69,328 69,718 72,764 105,255 81,149 84,099 89,683 Total long-term liabilities (Btmn) 75,735 163,634 163,922 160,072 115,020 146,306 141,769 132,237 Total liabilities (Btmn) 133,268 232,962 233,641 232,836 220,275 227,455 225,869 221,920 Paid-up capital (Btmn) 2,973 2,973 2,973 2,973 2,973 2,973 2,973 2,973 Total equity (Btmn) 48,493 42,708 50,427 57,669 69,394 77,179 84,183 93,093 BVPS (Bt) 16.27 14.32 16.93 19.35 23.30 25.91 28.27 31.26

Cash Flow Statement FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Core Profit (Btmn) 38,860 30,389 29,852 29,564 30,881 28,799 26,193 27,834 Depreciation and amortization (Btmn) 20,495 21,667 30,151 33,879 37,229 35,922 39,592 40,813 Operating cash flow (Btmn) 61,763 75,579 62,914 61,292 94,764 57,644 70,581 75,535 Investing cash flow (Btmn) (57,746) (71,545) (51,258) (40,066) (48,365) (70,936) (44,958) (40,443) Financing cash flow (Btmn) (8,411) (2,672) (12,232) (22,809) (35,829) (5,200) (24,193) (28,927) Net cash flow (Btmn) (4,393) 1,361 (576) (1,584) 10,570 (18,491) 1,430 6,166

Key Financial Ratios FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Gross margin (%) 45.4 45.5 41.5 39.1 38.1 37.6 35.9 36.5 Operating margin (%) 32.3 25.8 25.5 23.5 22.7 22.1 19.8 20.2 EBITDA margin (%) 45.8 40.3 45.0 43.9 43.7 42.4 41.4 41.6 EBIT margin (%) 38.1 34.1 37.9 37.3 37.6 35.8 35.1 35.6 Net profit margin (%) 25.2 20.2 19.1 17.5 17.2 15.9 14.0 14.4 ROE (%) 81.6 66.6 64.1 54.7 48.6 39.3 32.5 31.4 ROA (%) 25.3 13.3 10.7 10.3 10.6 9.7 8.5 8.9 Net D/E (%) 1.1 2.1 2.0 1.7 1.1 1.4 1.2 0.9 Interest coverage (%) 36.3 14.5 13.4 14.5 16.5 12.5 14.7 16.9 Debt service coverage (%) 4.8 3.8 4.8 3.3 2.7 4.8 5.1 5.5 Payout Ratio (%) 98.6 97.7 69.7 70.9 70.0 70.0 70.0 70.0

Main Assumptions FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Service revenue ex. IC growth yoy (%) 2.2 1.6 4.9 3.8 2.4 (1.1) 4.2 3.6 Mobile revenue (Btmn) 118,516 119,493 122,979 124,784 126,341 123,421 127,487 130,675 FBB revenue (Btmn) 120 860 3,128 4,436 5,656 6,788 8,145 9,774 SIM and Handset margin (%) (0.8) (4.2) (3.5) (3.5) 1.1 1.0 (1.0) 1.0

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Advanced Info Service PLC

Financial statement Profit and Loss Statement FY December 31 Unit 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Total revenue (Btmn) 44,584 43,262 44,081 44,733 48,818 42,845 42,256 41,715 Cost of goods sold (Btmn) (28,414) (26,976) (26,879) (26,637) (31,408) (26,757) (26,767) (26,528) Gross profit (Btmn) 16,170 16,286 17,202 18,096 17,410 16,088 15,489 15,187 SG&A (Btmn) (7,000) (6,297) (7,094) (6,361) (8,132) (6,313) (6,066) (6,050) Other income (Btmn) 204 255 162 163 267 319 184 220 Interest expense (Btmn) (1,288) (1,217) (1,194) (1,195) (1,171) (1,564) (1,546) (1,449) Pre-tax profit (Btmn) 8,086 9,027 9,076 10,703 8,373 8,530 8,061 7,908 Corporate tax (Btmn) (1,320) (1,523) (1,550) (1,833) (1,303) (1,335) (1,411) (1,215) Equity a/c profits (Btmn) (54) (17) (24) (25) (20) (7) 0 3 Minority interests (Btmn) (1) (1) (0) (1) (1) (1) 1 (2) Core profit (Btmn) 6,710 7,486 7,502 8,844 7,049 7,187 6,651 6,693 Extra-ordinary items (Btmn) 129 84 252 (44) 16 (430) 350 (181) Net Profit (Btmn) 6,839 7,570 7,754 8,800 7,065 6,756 7,001 6,513 EBITDA (Btmn) 18,293 19,091 19,321 21,470 19,302 23,100 22,469 22,306 Core EPS (Bt) 2.26 2.52 2.52 2.97 2.37 2.42 2.24 2.25 Net EPS (Bt) 2.30 2.55 2.61 2.96 2.38 2.27 2.35 2.19

Balance Sheet FY December 31 Unit 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Total current assets (Btmn) 34,905 46,038 37,623 37,690 47,142 55,337 51,593 41,899 Total fixed assets (Btmn) 241,961 237,443 236,700 232,576 228,584 305,197 301,918 297,328 Total assets (Btmn) 290,505 296,634 287,607 283,593 289,669 374,715 368,074 353,797 Total loans (Btmn) 109,133 103,227 97,424 97,014 94,044 93,967 90,856 105,360 Total current liabilities (Btmn) 72,764 79,365 67,589 91,260 105,255 126,595 116,320 104,023 Total long-term liabilities (Btmn) 160,072 160,500 155,489 130,235 115,020 183,349 180,057 181,148 Total liabilities (Btmn) 232,836 239,865 223,078 221,495 220,275 309,944 296,378 285,171 Paid-up capital (Btmn) 2,973 2,973 2,973 2,973 2,973 2,973 2,974 2,974 Total equity (Btmn) 57,669 56,769 64,529 62,098 69,394 64,772 71,696 68,627 BVPS (Bt) 19.35 19.05 21.66 20.84 23.30 21.74 24.07 23.04

Cash Flow Statement FY December 31 Unit 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Core Profit (Btmn) 6,710 7,486 7,502 8,844 7,049 7,187 6,651 6,693 Depreciation and amortization (Btmn) 8,919 8,847 9,052 9,572 9,758 13,006 12,862 12,948 Operating cash flow (Btmn) 9,572 30,015 4,446 41,985 18,318 44,687 10,733 4,230 Investing cash flow (Btmn) (6,697) (2,934) (8,202) (41,454) 4,225 (31,946) (12,976) (27,615) Financing cash flow (Btmn) (2,055) (15,650) (5,544) (448) (14,187) (1,820) (2,487) 14,193 Net cash flow (Btmn) 820 11,432 (9,301) 83 8,356 10,920 (4,730) (9,192)

Key Financial Ratios FY December 31 Unit 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Gross margin (%) 36.3 37.6 39.0 40.5 35.7 37.5 36.7 36.4 Operating margin (%) 20.6 23.1 22.9 26.2 19.0 22.8 22.3 21.9 EBITDA margin (%) 41.0 44.1 43.8 48.0 39.5 53.9 53.2 53.5 EBIT margin (%) 35.2 37.8 37.6 41.2 34.5 47.1 46.2 47.1 Net profit margin (%) 15.3 17.5 17.6 19.7 14.5 15.8 16.6 15.6 ROE (%) 49.7 57.1 49.8 62.7 44.4 47.3 39.1 41.0 ROA (%) 9.3 10.3 10.5 12.3 9.7 8.6 8.1 8.4 Net D/E (%) 1.7 1.5 1.3 1.4 1.1 1.0 0.9 1.3 Interest coverage (%) 14.2 15.7 16.2 18.0 16.5 14.8 14.5 15.4 Debt service coverage (%) 3.3 4.8 4.7 5.0 2.6 2.9 3.0 2.6

Main Assumptions FY December 31 Unit 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Service revenue ex. IC growth yoy (%) 3.3 (0.3) 3.1 4.0 2.6 0.1 (6.4) (6.8) Mobile revenue (Btmn) 31,426 30,678 32,042 31,851 31,770 30,334 29,536 29,197 FBB revenue (Btmn) 1,212 1,288 1,380 1,409 1,579 1,640 1,683 1,785 SIM and Handset margin (%) (4.3) 0.9 0.4 1.8 1.5 0.7 2.5 (1.2)

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Advanced Info Service PLC

Figure 1: 4Q20F results preview Unit: (Btmn) 4Q19 3Q20 4Q20F y-o-y q-o-q Service revenue ex. IC 34,562 32,130 32,221 -6.8% 0.3% - Mobile revenue 31,770 29,197 29,197 -8.1% 0.0% - FBB revenue 1,579 1,785 1,874 18.7% 5.0% - Other service revenue 1,213 1,148 1,150 -5.2% 0.2% IC & Equipment rental revenue 3,443 3,494 3,500 1.7% 0.2% Handset & SIM revenue 10,813 6,091 11,500 6.4% 88.8% Total revenue 48,818 41,715 47,221 -3.3% 13.2% Cost of services (11,152) (7,819) (7,900) -29.2% 1.0% Depreciation & Amortisation (9,600) (12,545) (12,550) 30.7% 0.0% Handset & SIM cost (10,656) (6,164) (11,550) 8.4% 87.4% Total costs (31,408) (26,528) (32,000) 1.9% 20.6% Gross profit 17,410 15,187 15,221 -12.6% 0.2% SG&A (7,100) (6,022) (6,150) -13.4% 2.1% Operating profit 10,310 9,165 9,071 -12.0% -1.0% Other income 233 195 150 -35.6% -23.1% Equity income (20) 0 0 na. na. EBIT 10,523 9,360 9,221 -12.4% -1.5% Interest expense (1,171) (1,449) (1,450) 23.8% 0.1% EBT 9,352 7,911 7,771 -16.9% -1.8% Income tax (1,503) (1,215) (1,243) -17.3% 2.3% Minority interests 0 (2) 0 na. na. Core profit 7,849 6,694 6,528 -16.8% -2.5% Extra items (784) (181) 350 na. na. Net income 7,065 6,513 6,878 -2.6% 5.6% EPS (Bt) 2.38 2.19 2.31 -2.7% 5.6%

Ratio analysis and Operating stats EBITDA margin (%) 41.2 52.5 46.1 SGA/Total revenue (%) 14.5 14.4 13.0 Reg. fee/service revenue (%) 4.1 4.2 4.2 Net profit margin (%) 14.5 15.6 14.6 Source: SCBS Investment Research, ADVANC

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Advanced Info Service PLC

Appendix Figure 2: Revenue breakdown Figure 3: Cost breakdown

3% 5% 7%

27% 17% 33%

3% 9% 70%

26% Regulatory fee Depreciation & amortization Mobile Fixed broadband SIM and handset sales Network operating expenses Other cost of services IC & Equipment rental Other service revenues Costs of SIM and device sales

Source: SCBS Investment Research, ADVANC Source: SCBS Investment Research, ADVANC Figure 4: Mobile revenue Figure 5: FBB revenue (Btmn) (Btmn) 132,000 130,675 12,000

130,000 9,774 127,487 10,000 128,000 126,341 8,145 126,000 124,784 8,000 123,421 124,000 122,979 6,788 5,656 122,000 6,000 119,493 4,436 120,000 118,516 4,000 118,000 3,128 116,000 2,000 114,000 860 120 112,000 0

2015 2016 2017 2018 2019 2020F 2021F 2022F 2015 2016 2017 2018 2019 2020F 2021F 2022F

Source: SCBS Investment Research, ADVANC Source: SCBS Investment Research, ADVANC Figure 6: Mobile Blended ARPU Figure 7: FBB ARPU (Bt/mth/sub) (Bt/mth/sub) 265 700 637 635 618 259 600 610 260 258 600 573 574 563 256 256 558 549 255 533 254 254 254 514 255 252 489 484 251 500 250 246 400 245 242 300 239 240 237 200 235

230 100

225 0 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20

Source: SCBS Investment Research, ADVANC Source: SCBS Investment Research, ADVANC Figure 8: Mobile subscribers Figure 9: FBB subscribers ('000) ('000) 42,500 1,400 1,256 42,014 1,203 42,000 1,200 1,090 1,038 41,558 41,49141,464 937 41,500 1,000 41,169 41,156 855 41,020 795 40,942 800 731 41,000 623 677 40,647 572 40,474 40,095 600 521 40,500 482 40,186 446 40,05640,050 400 40,000 200 39,500 0 39,000 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20

Source: SCBS Investment Research, ADVANC Source: SCBS Investment Research, ADVANC

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Advanced Info Service PLC

(price as of Jan 8, 2021) Figure 10: Valuation summary Rating Price Target ETR P/E (x) EPS growth (%) P/BV (x) ROE (%) Div. Yield (%) EV/EBITDA (x) (Bt/Sh) (Bt/Sh) (%) 19A 20F 21F 19A 20F 21F 19A 20F 21F 19A 20F 21F 19A 20F 21F 19A 20F 21F ADVANC Neutral 184.50 220.0 22.9 17.8 19.0 21.0 4 (7) (9) 7.9 7.1 6.5 49 39 32 4.0 3.6 3.3 7.9 8.6 8.4 DTAC Neutral 34.00 41.0 26.9 14.6 14.3 17.9 n.m. 2 (20) 3.2 3.2 3.3 23 22 18 8.4 6.3 5.7 4.3 4.5 4.5 TRUE Neutral 3.58 3.3 (7.8) 21.2 n.m. n.m. (20) n.m. (14) 0.9 1.0 1.0 4 (2) (2) 2.5 0.0 0.0 7.1 9.4 8.9 Average 17.9 16.7 19.4 (8) (2) (14) 4.0 3.8 3.6 25 20 16 5.0 3.3 3.0 6.4 7.5 7.3 Source: SCBS Investment Research

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The investors shall use the Information in association with other information and opinion, including their own judgment in making investment decision. The Information is obtained from sources believed to be reliable, and SCBS cannot guarantee the accuracy, completeness and/or correctness of the Information. This document is prepared by SCB Securities Company Limited (“SCBS”) which is wholly-owned by The Siam Commercial Bank Public Company Limited (“SCB”). SCB Asset Management Company Limited (“SCBAM”) which is wholly-owned by The Siam Commercial Bank Public Company Limited (“SCB”). SCB has acted as Financial Advisor of Digital Telecommunications Infrastructure Fund. SCBAM has acted as Fund Manager of Digital Telecommunications Infrastructure Fund. Any opinions, news, research, analyses, prices, statements, forecasts, projections and/or other information contained in this document (the “Information”) is provided as general information purposes only, and shall not be construed as individualized recommendation of an offer to buy or sell or the solicitation of an offer to buy or sell any securities. SCBS and/or its directors, officers and employees shall not be liable for any direct, indirect, incidental, special or consequential loss or damage, resulting from the use of or reliance on the Information, including without limitation to, damages for loss of profits. The investors shall use the Information in association with other information and opinion, including their own judgment in making investment decision. The Information is obtained from sources believed to be reliable, and SCBS cannot guarantee the accuracy, completeness and/or correctness of the Information. SCBS reserves the right to modify the Information from time to time without notice and in its sole discretion. This document is delivered to intended recipient(s) only and is not permitted to reproduce, retransmit, disseminate, sell, distribute, republish, circulate or commercially exploit the Information in any manner without the prior written consent of SCBS. Futures and Options trading carry a high level of risk with the potential for substantial losses, and are not suitable for all persons. Before deciding to trade Futures and Options, you should carefully consider your financial position, investment objectives, level of experience, and risk appetite if Futures and Options trading are appropriate. The possibility exists that you could sustain a loss of some or all of your initial investment. You should be aware of all the risks associated with Futures and Options trading, and you are advised to rely on your own judgment while making investment decision and/or should seek advice from professional investment advisor if you have any doubts. This document is delivered to intended recipient(s) only and is not permitted to reproduce, retransmit, disseminate, sell, distribute, republish, circulate or commercially exploit the Information in any manner without the prior written consent of SCBS. Copyright©2012 SCB Securities Company Limited. All rights reserved. Mon, Jan 11, 2021 7

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CG Rating 2020 Companies with CG Rating Companies with Excellent CG Scoring AAV, ADVANC, AF, AIRA, AKP, AKR, ALT, AMA, AMATA, AMATAV, ANAN, AOT, AP, ARIP, ARROW, ASP, BAFS, BANPU, BAY, BCP, BCPG, BDMS, BEC, BEM, BGRIM, BIZ, BKI, BLA, BOL, BPP, BRR, BTS, BWG, CENTEL, CFRESH, CHEWA, CHO*, CIMBT, CK, CKP, CM, CNT, COL, COMAN, COTTO, CPALL, CPF, CPI, CPN, CSS, DELTA, DEMCO, DRT, DTAC, DTC, DV8, EA, EASTW, ECF, ECL, EGCO, EPG, ETE, FNS, FPI, FPT, FSMART, GBX, GC, GCAP, GEL, GFPT, GGC, GPSC, GRAMMY, GUNKUL, HANA, HARN, HMPRO, ICC, ICHI*, III, ILINK, INTUCH, IRPC, IVL, JKN, JSP, JWD, K, KBANK, KCE, KKP, KSL, KTB, KTC, LANNA, LH, LHFG, LIT, LPN, MAKRO, MALEE, MBK, MBKET, MC, MCOT, METCO, MFEC, MINT, MONO, MOONG, MSC, MTC, NCH, NCL, NEP, NKI, NOBLE*, NSI, NVD, NYT, OISHI, ORI, OTO, PAP, PCSGH, PDJ, PG, PHOL, PLANB, PLANET, PLAT, PORT, PPS, PR9, PREB, PRG, PRM, PSH, PSL, PTG, PTT, PTTEP, PTTGC, PYLON, Q-CON, QH, QTC, RATCH, RS, S, S & J, SAAM, SABINA, SAMART, SAMTEL, SAT, SC, SCB, SCC, SCCC, SCG, SCN, SDC, SEAFCO, SEAOIL, SE-ED, SELIC, SENA, SIRI, SIS, SITHAI, SMK, SMPC, SNC, SONIC, SORKON, SPALI, SPI, SPRC, SPVI, SSSC, SST, STA, SUSCO, SUTHA, SVI, SYMC, SYNTEC, TACC, TASCO, TCAP, TFMAMA, THANA, THANI, THCOM, THG, THIP, THRE, THREL, TIP, TIPCO, TISCO, TK, TKT, TMB, TMILL, TNDT, TNL, TOA, TOP, TPBI, TQM, TRC, TRUE, TSC, TSR, TSTE, TSTH, UAC, TTA, UBIS, TTCL, UV, TTW, VGI, TU, VIH, TVD, WACOAL, TVI, WAVE, TVO, WHA, TWPC, WHAUP, U, WICE, WINNER Companies with Very Good CG Scoring 2S, ABM, ACE, ACG, ADB, AEC, AEONTS, AGE, AH, AHC, AIT, ALLA, AMANAH, AMARIN, APCO, APCS, APURE, AQUA, ASAP, ASEFA, ASIA, ASIAN, ASIMAR, ASK, ASN, ATP30, AUCT, AWC, AYUD, B, BA, BAM, BBL, BFIT, BGC, BJC, BJCHI, BROOK, BTW, CBG, CEN, CGH, CHARAN, CHAYO, CHG, CHOTI, CHOW, CI, CIG, CMC, COLOR, COM7, CPL, CRC, CRD, CSC, CSP, CWT, DCC, DCON, DDD, DOD, DOHOME, EASON, EE, ERW, ESTAR, FE, FLOYD, FN, FORTH, FSS, FTE, FVC, GENCO, GJS, GL, GLAND, GLOBAL, GLOCON, GPI, GULF, GYT, HPT, HTC, ICN, IFS, ILM, IMH, INET, INSURE, IRC, IRCP, IT, ITD*, ITEL, J, JAS, JCK, JCKH, JMART, JMT, KBS, KCAR, KGI, KIAT, KOOL, KTIS, KWC, KWM, L&E, LALIN, LDC, LHK, LOXLEY, LPH, LRH, LST, M, MACO, MAJOR, MBAX, MEGA, META, MFC, MGT, MILL, MITSIB, MK, MODERN, MTI, MVP, NETBAY, NEX, NINE, NTV, NWR, OCC, OGC, OSP, PATO, PB, PDG, PDI, PICO, PIMO, PJW, PL, PM, PPP, PRIN, PRINC, PSTC, PT, QLT, RCL, RICHY, RML, RPC, RWI, S11, SALEE, SAMCO, SANKO, SAPPE, SAWAD, SCI, SCP, SE, SEG, SFP, SGF, SHR, SIAM, SINGER, SKE, SKR, SKY, SMIT, SMT, SNP, SPA, SPC, SPCG, SR, SRICHA, SSC, SSF, STANLY, STI, STPI, SUC, SUN, SYNEX, T, TAE, TAKUNI, TBSP, TCC, TCMC, TEAM, TEAMG, TFG, TIGER, TITLE, TKN, TKS, TM, TMC, TMD, TMI, TMT, TNITY, TNP, TNR, TOG, TPA, TPAC, TPCORP, TPOLY, TPS, TRITN, TRT, TRU, TSE, TVT, TWP, UEC, UMI, UOBKH, UP, UPF, UPOIC, UT, UTP, UWC, VL, VNT, VPO, WIIK, WP, XO, YUASA, ZEN, ZIGA, ZMICO Companies with Good CG Scoring 7UP, A, ABICO, AJ, ALL, ALUCON, AMC*, APP, ARIN, AS, AU, B52, BC, BCH, BEAUTY, BGT, BH, BIG, BKD, BLAND, BM, BR, BROCK, BSBM, BSM, BTNC, CAZ, CCP, CGD, CITY, CMAN, CMO, CMR, CPT, CPW, CRANE, CSR, D, EKH, EP, ESSO, FMT, GIFT, GREEN, GSC*, GTB, HTECH, HUMAN, IHL, INOX, INSET, IP, JTS, JUBILE, KASET, KCM, KKC, KUMWEL, KUN, KWG, KYE, LEE, MATCH, MATI, M-CHAI, MCS, MDX, MJD, MM, MORE, NC, NDR, NER, NFC, NNCL, NPK, NUSA, OCEAN, PAF, PF, PK, PLE, PMTA, POST, PPM, PRAKIT, PRECHA, PRIME, PROUD, PTL, RBF, RCI, RJH, ROJNA, RP, RPH, RSP, SF, SFLEX, SGP, SISB, SKN, SLP, SMART, SOLAR, SPG, SQ, SSP, STARK, STC, SUPER, SVOA, TC, TCCC, THMUI, TIW, TNH, TOPP, TPCH, TPIPP, TPLAS, TTI, TYCN, UKEM, UMS, VCOM, VRANDA, WIN, WORK, WPH Corporate Governance Report The material contained in this publication is for general information only and is not intended as advice on any of the matters discussed herein. Readers and others should perform their own independent analysis as to the accuracy or completeness or legality of such information. The Thai Institute of Directors, its officers, the authors and editor make no representation or warranty as to the accuracy, completeness or legality of any of the information contained herein. By accepting this document, each recipient agrees that the Thai Institute of Directors Association, its officers, the authors and editor shall not have any liability for any information contained in, or for any omission from, this publication. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that date. SCB Securities Company Limited does not conform nor certify the accuracy of such survey result. To recognize well performers, the list of companies attaining “Good”, “Very Good” and “Excellent” levels of recognition (Not including listed companies qualified in the "no announcement of the results" clause from 1 January 2019 to 19 November 2020) is publicized. * บรษิ ัทหรอกรรมการหรื อผื ูบร้ หารของบริ ษิ ัททมี่ ขี าวด่ านการก้ ํากับดแลกู จการิ เชน่ การกระทําผดเกิ ยวกี่ ับหลักทรัพย ์ การทุจรติ คอรร์ ัปชนั เป็ นตน้ ซงการใชึ่ ข้ อม้ ูล CGR ควรตระหนักถงึ ขาวด่ ังกลาวประกอบด่ วย้

Anti-corruption Progress Indicator Certified (ไดร้ บการรั บรองั ) 2S, ADVANC, AI, AIE, AIRA, AKP, AMA, AMANAH, AP, AQUA, ARROW, ASK, ASP, AYUD, B, BAFS, BANPU, BAY, BBL, BCH, BCP, BCPG, BGC, BGRIM, BJCHI, BKI, BLA, BPP, BROOK, BRR, BSBM, BTS, BWG, CEN, CENTEL, CFRESH, CGH, CHEWA, CHOTI, CHOW, CIG, CIMBT, CM, CMC, COL, COM7, CPALL, CPF, CPI, CPN, CSC, DCC, DELTA, DEMCO, DIMET, DRT, DTAC, DTC, EASTW, ECL, EGCO, FE, FNS, FPI, FPT, FSS, FTE, GBX, GC, GCAP, GEL, GFPT, GGC, GJS, GPSC, GSTEEL, GUNKUL, HANA, HARN, HMPRO, HTC, ICC, ICHI, IFS, INET, INSURE, INTUCH, IRPC, ITEL, IVL, K, KASET, KBANK, KBS, KCAR, KCE, KGI, KKP, KSL, KTB, KTC, KWC, L&E, LANNA, LHFG, LHK, LPN, LRH, M, MAKRO, MALEE, MBAX, MBK, MBKET, MC, MCOT, MFC, MFEC, MINT, MONO, MOONG, MPG, MSC, MTC, MTI, NBC, NEP, NINE, NKI, NMG, NNCL, NSI, NWR, OCC, OCEAN, OGC, ORI, PAP, PATO, PB, PCSGH, PDG, PDI, PDJ, PE, PG, PHOL, PL, PLANB, PLANET, PLAT, PM, PPP, PPPM, PPS, PREB, PRG, PRINC, PRM, PSH, PSL, PSTC, PT, PTG, PTT, PTTEP, PTTGC, PYLON, Q-CON, QH, QLT, QTC, RATCH, RML, RWI, S & J, SABINA, SAT, SC, SCB, SCC, SCCC, SCG, SCN, SEAOIL, SE-ED, SELIC, SENA, SGP, SIRI, SITHAI, SMIT, SMK, SMPC, SNC, SNP, SORKON, SPACK, SPC, SPI, SPRC, SRICHA, SSF, SSSC, SST, STA, SUSCO, SVI, SYNTEC, TAE, TAKUNI, TASCO, TBSP, TCAP, TCMC, TFG, TFI, TFMAMA, THANI, THCOM, THIP, THRE, THREL, TIP, TIPCO, TISCO, TKT, TMB, TMD, TMILL, TMT, TNITY, TNL, TNP, TNR, TOG, TOP, TPA, TPCORP, TPP, TRU, TRUE, TSC, TSTH, TTCL, TU, TVD, TVI, TVO, TWPC, U, UBIS, UEC, UKEM, UOBKH, UWC, VGI, VIH, VNT, WACOAL, WHA, WHAUP, WICE, WIIK, XO, ZEN Declared (ประกาศเจตนารมณ์) 7UP, ABICO, AF, ALT, AMARIN, AMATA, AMATAV, ANAN, APURE, B52, BKD, BM, BROCK, BUI, CHO, CI, COTTO, DDD, EA, EFORL, EP, ERW, ESTAR, ETE, EVER, FSMART, GPI, ILINK, IRC, J, JKN, JMART, JMT, JSP, JTS, KWG, LDC, MAJOR, META, NCL, NOBLE, NOK, PK, PLE, ROJNA, SAAM, SAPPE, SCI, SE, SHANG, SINGER, SKR, SPALI, SSP, STANLY, SUPER, SYNEX, THAI, TKS, TOPP, TRITN, TTA, UPF, UV, WIN, ZIGA N/A 3K-BAT, A, A5, AAV, ABM, ACAP, ACC, ACE, ACG, ADB, AEC, AEONTS, AFC, AGE, AH, AHC, AIT, AJ, AJA, AKR, ALL, ALLA, ALUCON, AMC, AOT, APCO, APCS, APEX, APP, AQ, ARIN, ARIP, AS, ASAP, ASEFA, ASIA, ASIAN, ASIMAR, ASN, ATP30, AU, AUCT, AWC, BA, BAM, BC, BCT, BDMS, BEAUTY, BEC, BEM, BFIT, BGT, BH, BIG, BIZ, BJC, BLAND, BLISS, BOL, BR, BSM, BTNC, BTW, CAZ, CBG, CCET, CCP, CGD, CHARAN, CHAYO, CHG, CITY, CK, CKP, CMAN, CMO, CMR, CNT, COLOR, COMAN, CPH, CPL, CPR, CPT, CPW, CRANE, CRC, CRD, CSP, CSR, CSS, CTW, CWT, D, DCON, DHOUSE, DOD, DOHOME, DTCI, DV8, EASON, ECF, EE, EKH, EMC, EPG, ESSO, ETC, F&D, FANCY, FLOYD, FMT, FN, FORTH, FVC, GENCO, GIFT, GL, GLAND, GLOBAL, GLOCON, GRAMMY, GRAND, GREEN, GSC, GTB, GULF, GYT, HFT, HPT, HTECH, HUMAN, HYDRO, ICN, IFEC, IHL, IIG, III, ILM, IMH, IND, INGRS, INOX, INSET, IP, IRCP, IT, ITD, JAK, JAS, JCK, JCKH, JCT, JR, JUBILE, JUTHA, JWD, KAMART, KC, KCM, KEX, KDH, KIAT, KK, KKC, KOOL, KTIS, KUMWEL, KUN, KWM, KYE, LALIN, LEE, LEO, LH, LIT, LOXLEY, LPH, LST, MACO, MANRIN, MATCH, MATI, MAX, M-CHAI, MCS, MDX, MEGA, METCO, MGT, MICRO, MIDA, MILL, MITSIB, MJD, MK, ML, MM, MODERN, MORE, MPIC, MVP, NC, NCAP, NCH, NDR, NER, NETBAY, NEW, NEWS, NEX, NFC, NPK, NRF, NTV, NUSA, NVD, NYT, OHTL, OISHI, OSP, OTO, PACE, PAE, PAF, PERM, PF, PICO, PIMO, PJW, PMTA, POLAR, POMPUI, PORT, POST, PPM, PR9, PRAKIT, PRAPAT, PRECHA, PRIME, PRIN, PRO, PROUD, PTL, RAM, RBF, RCI, RCL, RICHY, RJH, ROCK, ROH, RP, RPC, RPH, RS, RSP, RT, S, S11, SA, SABUY, SAFARI, SAK, SALEE, SAM, SAMART, SAMCO, SAMTEL, SANKO, SAUCE, SAWAD, SAWANG, SCGP, SCM, SCP, SDC, SEAFCO, SEG, SF, SFLEX, SFP, SFT, SGF, SHR, SIAM, SICT, SIMAT, SIS, SISB, SK, SKE, SKN, SKY, SLM, SLP, SMART, SMT, SO, SOLAR, SONIC, SPA, SPCG, SPG, SPVI, SQ, SR, SSC, STAR, STARK, STC, STEC, STGT, STHAI, STI, STPI, SUC, SUN, SUTHA, SVH, SVOA, SWC, SYMC, T, TACC, TAPAC, TC, TCC, TCCC, TCJ, TCOAT, TEAM, TEAMG, TGPRO, TH, THANA, THE, THG, THL, THMUI, TIGER, TITLE, TIW, TK, TKN, TM, TMC, TMI, TMW, TNDT, TNH, TNPC, TOA, TPAC, TPBI, TPCH, TPIPL, TPIPP, TPLAS, TPOLY, TPS, TQM, TR, TRC, TRT, TRUBB, TSE, TSF, TSI, TSR, TSTE, TTI, TTT, TTW, TVT, TWP, TWZ, TYCN, UAC, UMI, UMS, UNIQ, UP, UPA, UPOIC, UREKA, UT, UTP, UVAN, VARO, VCOM, VI, VIBHA, VL, VNG, VPO, VRANDA, W, WAVE, WGE, WINNER, WORK, WORLD, WP, WPH, WR, YCI, YGG, YUASA, ZMICO Explanations Companies participating in Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) under Thai Institute of Directors (as of June 24, 2019) are categorised into: companies that have declared their intention to join CAC, and companies certified by CAC.

Mon, Jan 11, 2021 8