Thanachart Ad Hoc Research Thanachart Ad Hoc Research 20 FEBRUARY 2013
BUY (Unchanged) TP: Bt 13.50 (From Bt 8.00)
Change in Numbers Upside: 32.4%
RS Public Co Ltd (RS TB)
Best of both worlds
We’ve liked RS as we’ve seen it as the best play on the satellite TV boom for two years, and we now view it as the best play on the upcoming digital TV story. In both stages of media platform development, we believe RS will enjoy continued ad rate hikes. We incorporate digital TV KALVALEE THONGSOMAUNG value and see RS’s TP at Bt13.50/share (from Bt8.00). Reiterate BUY. 662 – 617 4900 [email protected] Proven success in satellite TV business …
We see 79% and 51% EPS growth for RS in 2013-14 driven by the success COMPANY VALUATION of its satellite TV business, as reflected by: 1) satellite and cable TV penetration rising from 50% in 2011 to 66% in 2012 and potentially 75-80% Y/E Dec (Bt m) 2011A 2012F 2013F 2014F in 2013, 2) an average ad rate hike of 42% effective early 2013 (or 100% for Sales 2,729 2,734 3,448 3,945 primetime), 3) utilization rate rising from 36% in 2011 to 61% in 2012 and our Net profit 209 259 465 703 forecast of 66% in 2013, and 4) RS’s channels’ (Sabaidee TV and Channel Consensus NP ⎯ 286 398 623 8) rankings climbing to the top two spots in Nielsen’s satellite TV rankings. Diff frm cons (%) ⎯ (9.4) 16.8 12.7 … and the best digital TV story play Norm profit 179 259 465 703
We expect RS to move to the digital TV platform and see it as the best play Prev. Norm profit ⎯ 258 380 622 among other potential players i.e. BEC World Pcl (BEC), Channel 7 Chg frm prev (%) ⎯ 0.7 22.3 13.0 (Unlisted), MCOT Pcl (MCOT), GMM Grammy Pcl (GRAMMY), Workpoint Norm EPS (Bt) 0.2 0.3 0.5 0.7 Pcl (WORK) and Nation Multimedia Group Pcl (NMG). With the must-carry Norm EPS grw (%) (48.2) 29.4 79.3 51.1 rule forcing all TV platforms to show digital channels, we expect ad rate Norm PE (x) 52.0 40.2 22.4 14.8 realignments (depending on content quality) with the gap narrowing between EV/EBITDA (x) 23.9 17.9 11.5 9.6 existing free-terrestrial and satellite TV programs. We see RS as most P/BV (x) 9.0 7.5 6.4 5.3 leveraged to this story with the largest upside from its highest exposure to Div yield (%) 1.5 1.7 2.7 4.0 low-rate base satellite TV. In contrast, we expect the main free TV players ROE (%) 17.6 20.3 30.8 39.0 BEC, Channel 7 and MCOT to see highest risk from potential stagnant or Net D/E (%) (23.2) (27.5) (13.7) (1.7) even declines in their high-base ad rates. GRAMMY and WORK are in
between, in our view, as they have both free TV and satellite TV programs. PRICE PERFORMANCE
Revisiting our ad rate hike potential work-out (Bt/shr) (%) RS Rel to SET Index 12 250 Referring to our report “RS – Upside potential work-out,” (12 September 200 2012), we revisit the cost per rating calculation basis and work out potential 10 150 8 primetime ad rate hike upside potential for RS in the new digital TV era 100 6 (Exhibit 5). With the must-carry rule, we expect RS channel accessibility to 50 be the same as for bigger players. We forecast RS’s primetime ad rate to rise 4 0
100% in 2013 and 40% in 2014 still on the satellite platform and 46% in 2015 2 (50) Feb-12 Jun-12 Oct-12 Feb-13 and 25% in 2016 on digital. We see the digital TV platform leading to higher
costs for RS in 2014-15 before more material revenue streams in later years. COMPANY INFORMATION Earnings and TP upped Price as of 19-Feb-13 (Bt) 10.20
We lift our earnings forecasts by 22%, 13%, and 13% in 2013-15 and 30% Market cap (US$ m) 284.7 from 2016 onward, and thus our TP from Bt8.00 to Bt13.50, to reflect our Listed shares (m shares) 874.1 assumptions of: 1) average ad rate hikes of 42%, 36% and 37% in 2013-15 Free float (%) 35.1 versus our old 40%, 31% and 25% forecasts, 2) Bt100m p.a. in additional Avg daily turnover (US$ m) 0.8 revenues from the variety sport “SUN channel” (or La Liga), 3) higher 12M price H/L (Bt) 10.3/2.9 contribution of tie-in ad and sponsorship revenues, and 4) breakeven of La Liga in 2013F and turning a profit in 2014F-15F versus previous estimates of Sector Media a Bt80m loss in 2013 and profits of Bt40m in 2014 and Bt20m in 2015. Major shareholder Chetchotisak Family 44% Sources: Bloomberg, Company data, Thanachart estimates
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20 FEBRUARY 2013 Thanachart Ad Hoc Research
Best play on both satellite TV and digital TV stories
We have been bullish on RS Pcl (RS) since February 2011 on our view of it being the Beyond the transition period best satellite TV story but we now think it’s time to look at RS as a play on the bigger
and into something offering digital TV platform. As RS’s satellite TV growth is continuing and it’s the key driver for
a far higher profile with hefty our EPS growth forecasts of 79% and 51% in 2013-14, we look at RS beyond its ad rate upside existing satellite TV platform to where it eventually moves to the digital TV platform. Although going digital TV will likely create cost pressures in the first one to two years when revenues may not yet have caught up, we take the view that RS moving to this platform will provide a long-term benefit (ad rate upside) which will far outweigh the
costs and open up opportunities for RS to significantly raise its business profile.
Exhibit 1 below shows our earnings growth forecasts where 2013F and 2014F are still mainly driven by the success of its existing satellite TV business before our
assumption of the digital TV platform starting to make some contribution in 2015F and
more significantly thereafter. RS is one of the strongest growth stocks in the Thai market. We reiterate our BUY call.
Ex 1: One Of The Strongest Growth Stocks In Thailand (Bt m) (y-y %) Net profit (LHS) Grow th (RHS) 1,200 120 318.9% 100 1,000 80
800 60 40 600 20
400 0 (20) 200 (40)
0 (60) 2009 2010 2011 2012F 2013F 2014F 2015F 2016F 2017F 2018F
Sources: Company data, Thanachart estimates
Our big-picture assumptions for digital TV and why we believe RS will move to this
Under our digital TV platform are laid out below.
assumptions, we take the Despite the regulatory details which are still being worked out by the National view that RS will move to Broadcasting and Telecommunications Commission (NBTC) not being clear yet, this platform and that it will we assume that bidding for digital TV licenses will happen within this year,
only be fully functioning potentially in 4Q13. after 2015 Given the need for network equipment change, adjustment and installation which
would require time and money, we only expect a fully functioning digital TV
platform after 2015. With the NBTC’s must-carry rule, we expect most terrestrial free TV incumbents
and key satellite TV players to bid for digital TV licenses. The must-carry rule
requires all TV broadcasting platforms to carry all digital TV channels. This in effect should secure the highest penetration rate and most eyeballs for the digital TV platform, whose viewer base would switch from the existing widest coverage under the antenna analog system, soon to be converted into digital.
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The latest NBTC plan is for a total of 48 digital TV licenses. Of these, 12 would be public channels, 12 community channels and 24 commercial channels (these 24 would be put up for auction). Of the 24 commercial channels, the plan is for 14
variety or entertainment channels, five news and five children’s. Given as many as 14 variety channel TV licenses and only one company being allowed to bid for one channel in this category (they can also bid for other categories but the regulation is not yet finalized), there looks to be plenty of room for more than just the four entertainment-related free TV incumbents, i.e. Channel 3 of BEC World Pcl (BEC TB, BUY, current price Bt71.25), Channel 7 (Unlisted), Channel 9 of MCOT Pcl
(MCOT TB, SELL, Bt47.75) and GMM GRAMMY (GRAMMY TB, SELL, Bt24.70)
to win licenses. It therefore shouldn’t prove too difficult for RS to win one variety channel license, in our view.
The digital TV platform will require investments and operating costs that will likely be more than for the current free TV and satellite TV platforms. Together with its eventual highest penetration rate and most eyeballs, we expect the players to be serious in content development and competition to capture as much as they can of the ad spending pool. We also see ad spenders focusing first on the pool of digital TV channels and giving less weight to cable and satellite TV channels.
For all of the reasons outlined above, we expect RS to move to the digital TV platform and upgrade its content to the next level. We believe this would eventually
raise its business profile, provide upside to its ad rates and allow it to become a
much bigger player.
Ex 2: Potential Digital TV Players In The Entertainment Variety Category
Potential players Existing platform Competitive edge Existing program content
BEC World Pcl Free-terrestrial TV - #2 market share (28%) of free-TV adex News, entertainment variety, soap - 80% in-house produced programs operas, talent shows, and content
acquired from overseas
Channel 7 Free-terrestrial TV - #1 market share (32%) of free-TV adex News, entertainment variety, soap (private company) Satellite TV - 70% in-house produced programs operas, talent shows and content - Operates 1 satellite TV channel (re-run) acquired from overseas
GRAMMY Pcl Free-terrestrial TV - Content provider to free-TV operators Entertainment variety, soap operas Satellite TV - Operates 10 satellite TV channels music, and movies - #2 market share (18%) of satellite TV adex
MCOT Pcl Free-terrestrial TV - #3 market share (19%) of free-TV adex News, entertainment variety, soap - 47% in-house produced programs operas and talent shows
Nation Multimedia Satellite TV - Operates 3 satellite TV channels News and children’s content Group Pcl - #3 market share (7%) of satellite TV adex acquired from overseas
RS Pcl Satellite TV - Operates 5 satellite TV channels Entertainment variety, soap operas
- #1 market share (30%) of satellite TV adex and music
Workpoint Pcl Free-terrestrial TV - Content provider to free-TV operators Entertainment variety
Satellite TV - Operates 1 satellite TV channel - #4 market share (5%) of satellite TV adex
Sources: Company data, Thanachart estimates
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Ex 3: Expected Rise Of Digital TV Accessibility Through Must-carry Rule
(% penetration) Satellite & cable TV penetration Must-carry rule on Digital TV penetration digital TV 100 90 90 80 8080 80 80 75
70 63 60 50 50
40 2011 2012F 2013F 2014F 2015F 2018F
Sources: Company data, Thanachart estimates
The reason we view RS as the best play on the digital TV platform is because we We see RS as the best believe it is most leveraged to ad rate upside. Under our assumption that there will be leveraged play to an ad rate more players under the digital TV platform than in the existing free TV analog realignment under the digital platform, we expect an ad rate realignment among players depending on their content
TV platform quality. In that potential realignment, we see the downside being with the top free TV
incumbents BEC, Channel 7 and MCOT while the upside should be with satellite- turned-digital TV players, including RS.
Exhibit 4 shows the exposure of each company to the free-TV and satellite TV
platforms. RS appears most leveraged to enjoy upside from a realignment of ad rates as it has the largest exposure to the low-rate base satellite TV market. In contrast, we believe the main free TV players BEC, Channel 7 and MCOT are at highest risk of potential stagnant or even a drop in their high-base ad rates. GRAMMY and WORK are somewhere in between as they have exposure in both free TV and satellite TV
programs. WORK still earns 74% of its revenues from producing content for free-
terrestrial TV operators while GRAMMY generates 16% of its total revenues from its programs shown on free TV channels.
Ex 4: RS Has The Highest Exposure To Enjoy An Upward Ad Rate Trend Ad rate level
High
Channel 7 (free TV) BEC (free TV)
MCOT (free TV) WORK (mix)
GRA MMY ( mix )
RS (satellite TV) Low Upside from ad rate unlocking High
Sources: Company data, Thanachart estimates
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20 FEBRUARY 2013 Thanachart Ad Hoc Research
Revisiting our ad rate hike potential work-out
Referring to our cost-per-rating based ad rate workout in “RS – Upside potential work- We calculate RS is worth out,” dated 12 September 2012, we review our ad rate calculations by factoring in our Bt13.50/share on the view that RS will eventually be a digital TV platform player. Note that cost per rating is assumption of it moving to basically the ad rate (baht/minute) divided by the TV rating. In theory, any program in
the digital TV platform any platform should get the same price per one unit of rating.
We revisit our ad rate increase potential work-out in Exhibit 5. We assume RS’s Channel 8 will still enjoy the satellite TV boom in 2013-14 before some digital TV
contribution in 2015 and more significantly from 2016 onward.
Currently, RS’s ad rates are still imbalanced on cost per rating. We assume a
continued bridging of the gap in cost per rating between Channel 8 and that of free-TV
with the support of higher TV ratings even under the existing satellite TV platform due to higher penetration and program improvement. Under the digital TV scenario, our new ad rate assumptions imply RS’s share value comes to Bt13.50. But if we assume RS does not join the digital TV platform, then room for ad rate growth after 2015 would be more limited, on our estimates, and we calculate RS’s value at only Bt9.80.
Ex 5: Channel’s 8 Ad Rate Unlocking Potential Assuming Digital TV Kicks In Seriously From 2016F Onward
2013F 2013F 2014F 2015F 2016F 2017F BEC Channel 8 Channel 8 Channel 8 Channel 8 Channel 8
Prime time (Bt/min) 500,000 25,000 36,000 48,000 70,000 87,500 TV rating 12.0 1.0 1.2 1.5 2.0 2.5
Cost per rating ~42,000 25,000 30,000 32,000 35,000 35,000 Sources: Company data, Thanachart estimates
Earnings and TP upgrades
RS’s core satellite TV business and our estimate of digital TV value are the key We lift our earnings drivers for the increases our earnings forecasts and TP. We raise earnings by 22% forecasts by 22% and 13% in and 13% in 2013F-14F and 30% from 2015F onward, and thus our TP from
2013-14 and 30% from 2015 Bt8.00/share to Bt13.50, to reflect: onwards 1) Key earnings drivers for 2013F-14F being healthy growth in the satellite TV business while we expect digital TV value to start some contribution in 2015.
2) With our expectations of satellite TV program and rating improvements for RS, we project average ad rate growth rates of 42%, 36% and 37% in 2013-15F versus our old forecasts of 40%, 31% and 25%.
3) Our assumption of Bt100m p.a. in additional revenue from the variety sport “SUN channel” (or La Liga).
4) Our forecast for higher contributions of tie-in ad and sponsorship revenues.
5) Breakeven of La Liga program in 2013F versus our previous estimate of a Bt80m loss in 2013.
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Ex 6: Key Assumption Changes And Earning Revisions 2013F 2014F 2015F
Net profit (Bt m) New 405 703 654
Old 380 622 581 % Change 22.3 13.0 12.5
Satellite TV revenue (Bt m)
New 1,219 1,548 2,103 Old 985 1,219 1,555
% Change 23.8 26.9 35.3
Advertising rate growth (%)
New 42.0 36.1 36.9 Old 40.0 30.7 24.9
% Change 2.0 5.4 12.0 Sources: Company data, Thanachart estimates
We expect RS’s Channel 8 to move to the digital TV platform and thus assume higher We factor in new capex for capex to pay for a digital TV license fee, network rent and increased production costs additional costs related to from 2014 onwards. RS’s other channels, namely Sabaidee TV, YOU Channel, digital TV Starmax and SUN Channel, are still on the satellite TV platform.
Ex 7: Higher Capex Related To Digital TV Story
Capex for 2014 World Cup content (Bt m) Capex for digital TV Capex for existing business 900 800 700 150 600 200 500 100 100
400
300 200 450 450 450 450 300 100 0 60 2011 2012F 2013F 2014F 2015F 2016F
Sources: Company data, Thanachart estimates
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20 FEBRUARY 2013 Thanachart Ad Hoc Research
La Liga – a profitable project
To recap, RS holds the exclusive rights to broadcast the Spanish La Liga football
More concrete plans to get 2012/2015 seasons. The first season started in August 2012 when RS hadn’t been La Liga to break even in granted a pay-TV license from the NBTC yet and the La Liga project made a loss of 2013 and turn it profitable in Bt70m in 2012F despite RS earning revenue from selling 300,000 “SUNBOX” set-top 2014-15 boxes last year.
In late-January 2013, RS was granted a pay-TV license by the NBTC. Its pay-TV La Liga football will therefore start in the second season (August 2013) with a more concrete plan of action to become profitable:
RS has been negotiating with the #1 set-top box operator for revenue sharing on subscription fees to encourage subscription activity.
RS has negotiated to sub-license La Liga to cable TV operators and mobile operators.
We thus forecast the La Liga program to break even in 2013 and turn profits of Bt80m and Bt40m in 2014-15 versus our previous estimate of a Bt80m loss in 2013 and profits of Bt40m in 2014 and Bt20m in 2015.
Ex 8: Key Assumptions For La Liga Project
La Liga project 2013F 2014F 2015F Profit/loss (Bt m)
New 0 80 40
Old (80) 40 20
Revenue (Bt m) 450 530 240 - Sale of SUNBOX 100 ⎯ ⎯
- Subscription fees 260 410 180 - Sponsorship 100 120 60
Assumptions
- SUNBOX (units) 240,000 ⎯ ⎯
- Subscribers 220,000 340,000 300,000 Sources: Company data, Thanachart estimates
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Ex 9: Valuation Comparison With Regional Peers
EPS growth —— PE —— EV/EBITDA — Div yield — Name BBG code Country 13F 14F 13F 14F 13F 14F 13F 14F
(%) (%) (x) (x) (x) (x) (%) (%) Beijing Gehua 600037 CH China 9.7 4.9 22.2 21.2 5.1 4.5 1.9 1.9
Phoenix Satellite 2008 HK Hong Kong na na 17.2 15.0 9.7 8.3 2.1 2.5 Television Broad 511 HK Hong Kong 4.2 6.1 14.3 13.5 8.8 8.3 4.3 4.6
Ent. Network ENIL IN India 13.3 19.3 18.7 15.7 9.4 8.0 0.0 0.5
Zee Entertainment Z IN India na na 29.4 24.0 21.6 17.5 1.0 1.2
Zee News Ltd ZEEN IN India 24.4 24.2 14.8 11.9 7.4 6.3 3.0 3.3
Surya Citra Media SCMA IJ Indonesia 20.4 15.8 18.6 16.1 12.8 10.7 4.8 5.6 Media Nusantara MNCN IJ Indonesia 23.7 28.5 19.4 15.1 12.2 9.9 2.3 2.7
Global Mediacom BMTR IJ Indonesia 29.6 12.4 16.2 14.4 7.6 6.3 0.8 1.1 Elang Mahkota EMTK IJ Indonesia 45.7 29.3 20.0 15.4 9.2 7.4 0.9 1.3
Media Prima Bhd MPR MK Malaysia 8.2 9.1 10.8 9.9 5.9 5.6 5.7 6.2
ABC-CBN Corp ABS PM Philippines 32.8 (12.4) 14.6 16.6 6.1 6.8 1.6 1.5 Gma Network Inc GMA7 PM Philippines 15.0 na 18.6 na 10.2 na 3.3 na
Workpoint Ent. WORK TB Thailand 22.5 16.4 22.5 19.3 15.3 13.7 3.5 3.7 BEC World * BEC TB Thailand 23.2 12.5 24.4 21.7 15.1 13.7 4.1 4.6
GMM Grammy * GRAMMY TB Thailand 24.1 44.6 32.2 22.3 11.7 9.4 0.0 0.0 MCOT Pcl* MCOT TB Thailand 4.4 4.6 19.3 18.5 12.8 12.0 4.8 5.0
RS Pcl* RS TB Thailand 79.3 51.1 22.4 14.8 11.5 9.6 2.7 4.0
Average 23.8 17.8 19.8 16.8 10.7 9.3 2.6 2.9 Source: Bloomberg Note: * Thanachart estimates, using Thanachart normalized EPS
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20 FEBRUARY 2013 Thanachart Ad Hoc Research
COMPANY DESCRIPTION COMPANY RATING
Financial RS Public Company Limited (RS) operates a diversified media Rating Scale management and entertainment business. The company and its subsidiaries 5 Very Strong 5 4 produce recorded music on CDs, digital music, satellite TV 3 Risk Strong 4 shows and dramas, radio programs, concerts and events, as Manage 2 manage ment 1 well as sports broadcasting programs. 0 ment Good 3
Fair 2
*Corp. Liquidity Weak 1 governance None 0
Source: Thanachart Source: Thanachart; *CG Awards, no rating
THANACHART’S SWOT ANALYSIS
S — Strength W — Weakness
Fully integrated entertainment network. Dependent on domestic consumption momentum.
Swift adjustment in response to changes in consumer Dependent on superstar artists.
needs.
Targeting customers nationwide.
O — Opportunity T — Threat
Higher penetration of satellite TV together with better Liberalization of broadcasting regulations.
satellite TV ratings will boost its media revenue. Technology and consumer preferences have shifted.
Upcoming digital TV platform with hefty ad rate upside. Piracy of the company’s products.
Potential exposure to sports broadcasting. Regulatory risks from the NBTC’s broadcasting master
Arrival of 3G technology and music streaming to help plan. support digital music.
CONSENSUS COMPARISON RISKS TO OUR INVESTMENT CASE
Consensus Thanachart Diff
If the satellite TV business performance does not Target price (Bt) 8.25 13.50 64% reach our expectations due to sluggish domestic Net profit 12F (Bt m) 286 259 -9% consumption or fierce competition. Net profit 13F (Bt m) 398 465 17% If the related costs for the move to digital TV are much Consensus REC BUY: 6 HOLD: 1 SELL: 1 higher than expected.
HOW ARE WE DIFFERENT FROM THE STREET? If the arrival of 3G technology and music streaming are
We assume RS will move to the digital TV platform. delayed, while music digital downloads already slowing down across the industry. Our TP incorporates digital TV value which believe would allow RS to unlock its low ad rates in the La Liga program can provide meaningful upside and downside to our forecasts. satellite TV market.
Sources: Bloomberg consensus, Thanachart Source: Thanachart
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FINANCIAL SUMMARY
Income Statement(consolidated) Quarterly Earnings (consolidated) FY ending Dec (Bt m) 2010A 2011A 2012F 2013F 2014F 3Q11 4Q11 1Q12 2Q12 3Q12
Sales 2,896 2,729 2,734 3,448 3,945 Sales 748 669 588 698 800 Cost of sales 1,968 1,853 1,746 2,118 2,470 Cost of sales 520 459 402 445 530 Gross profit 928 876 987 1,330 1,475 Gross profit 228 210 186 253 270
SG&A 551 582 558 679 749 SG&A 150 148 123 133 153 Operating profit 378 294 430 651 725 Operating profit 78 62 63 119 117 Depre & amortization 310 85 130 233 358 Depre & amortization 29 23 15 16 30 EBITDA 688 379 559 884 1,083 EBITDA 107 85 78 135 147 Other income 22 6 (66) (34) 193 Other income 5 14 13 2 3
Other expenses 0 (10) 0 0 0 Other expenses (2) (5) (2) (2) (2) Interest expense (14) (3) 1 4 1 Interest expense (1) (1) (0) (1) (3) Pre-tax profit 386 287 365 621 920 Pre-tax profit 81 69 74 118 115 Income tax 599795143202Income tax 3231182942 After-tax profit 326 190 270 478 718 After-tax profit 49 38 55 89 73
Equity income 00000Equity income00000 Minority interests (10) (10) (10) (13) (15) Minority interests (3) (1) 2 3 3 Extraordinary items030000Extraordinary items00000
NET PROFIT 317 209 259 465 703 NET PROFIT 45 37 58 92 76 Normalized profit 317 179 259 465 703 Normalized profit 45 37 58 92 76 EPS (Bt) 0.4 0.2 0.3 0.5 0.7 EPS (Bt) 0.1 0.0 0.1 0.1 0.1 Normalized EPS (Bt) 0.4 0.2 0.3 0.5 0.7 Normalized EPS (Bt) 0.1 0.0 0.1 0.1 0.1
Balance Sheet (consolidated) Financial Ratios And Valuations
FY ending Dec (Bt m) 2010A 2011A 2012F 2013F 2014F 2010A 2011A 2012F 2013F 2014F Cash & equivalent 368 286 360 122 100 Norm profit (y-y%) 318.9 (43.4) 44.7 79.3 51.1
A/C receivables 487 628 524 661 756 Normalized EPS (%) 318.9 (48.2) 29.4 79.3 51.1 Inventories 52 37 44 53 62 Net profit (y-y%) 318.9 (33.9) 23.9 79.3 51.1 Other current assets 255 264 261 327 372 EPS (%) 318.9 (39.6) 10.9 79.3 51.1 Investment 21111Dividend payout (%) 33.5 73.3 70.0 60.0 60.0 Fixed assets 135 112 332 549 991
Other assets 257 544 545 688 787 Gross margin (%) 32.1 32.1 36.1 38.6 37.4 Total assets 1,558 1,873 2,068 2,402 3,071 Operating margin (%) 13.0 10.8 15.7 18.9 18.4 EBITDA margin (%) 23.8 13.9 20.5 25.6 27.5 S-T debt 24 2 (27) (94) 57 Net margin (%) 11.3 6.9 9.9 13.9 18.2 A/C payables 225 233 220 267 311
Other current liabilities 415 430 439 548 630 ROA (%) 19.4 10.5 13.2 20.8 25.7 L-T debt 4 11 (4) (13) 8 ROE (%) 44.7 17.6 20.3 30.8 39.0 Other liabilities 2 22 22 28 32 Net D/E (x) (0.4) (0.2) (0.3) (0.1) (0.0) Total liabilities 670 698 651 736 1,038
Norm PE (x) 26.9 52.0 40.2 22.4 14.8
Minority interest 15 15 25 38 53 Norm PE at TP (x) 35.6 68.9 53.2 29.7 19.6 Shareholders' equity 873 1,160 1,392 1,627 1,979 PE (x) 26.9 44.6 40.2 22.4 14.8 EV/EBITDA (x) 11.9 23.9 17.9 11.5 9.6 Working capital 314 433 348 448 507 P/BV (x) 9.8 9.0 7.5 6.4 5.3
Total debt 27 13 (31) (106) 65 Dividend yield (%) 1.2 1.5 1.7 2.7 4.0
Net debt (341) (273) (391) (228) (35) Free cash flow 421 103 143 205 252 BV/share (Bt) 1.0 1.1 1.4 1.6 1.9 Year End Shares (m) 836 915 1,023 1,023 1,023 DPS (Bt) 0.1 0.2 0.2 0.3 0.4
Sources: Company data, Thanachart estimates
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DISCLAIMER Thanachart Ad Hoc Research
General Disclaimers And Disclosures:
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THANACHART SECURITIES
DISCLAIMER Thanachart Ad Hoc Research
Recommendation Structure:
Recommendations are based on absolute upside or downside, which is the difference between the target price and the current market price. If the upside is 10% or more, the recommendation is BUY. If the downside is 10% or more, the recommendation is SELL. For stocks where the upside or downside is less than 10%, the recommendation is HOLD. Unless otherwise specified, these recommendations are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a temporary mismatch between upside/downside for a stock based on the market price and the formal recommendation.
For sectors, we look at two areas, ie, the sector outlook and the sector weighting. For the sector outlook, an arrow pointing up, or the word “Positive”, is used when we see the industry trend improving. An arrow pointing down, or the word “Negative”, is used when we see the industry trend deteriorating. A double-tipped horizontal arrow, or the word “Unchanged”, is used when the industry trend does not look as if it will alter. The industry trend view is our top-down perspective on the industry rather than a bottom-up interpretation from the stocks we cover. An “Overweight” sector weighting is used when we have BUYs on majority of the stocks under our coverage by market cap. “Underweight” is used when we have SELLs on majority of the stocks we cover by market cap. “Neutral” is used when there are relatively equal weightings of BUYs and SELLs.
Thanachart Securities Pcl. Research Team 28 Floor, Siam Tower Unit A1 989 Rama 1, Pathumwan Road, Bangkok 10330 Tel: 662 617-4900 Email: [email protected]
Pimpaka Nichgaroon, CFA Supanna Suwankird Siriporn Arunothai Head of Research Energy, Utilities Ad Hoc Research, Healthcare Economics & Strategy [email protected] [email protected] [email protected]
Sarachada Sornsong Saksid Phadthananarak Noppadol Pririyawut Banks, Telecom Electronics, Construction, Transportation Senior Technical Analyst [email protected] [email protected] [email protected]
Phannarai Tiyapittayarut Kalvalee Thongsomaung Adisak Phupiphathirungul, CFA Property, Retail Food, Hotel, Media Retail Market Strategy [email protected] [email protected] [email protected]
Warayut Luangmettakul, CFA Assistant Analyst [email protected]
THANACHART SECURITIES