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).

Equity Bottom-Up

For the upcoming year, we have selected 10 stocks for our country portfolio, and they can be broken down into three groups: <ul>
<li>
Big cap picks. Big caps tend to outperform during times of strong QE flows. These include our top pick in large sectors except energy (BBL, AIS), the world's most valuable airport (AOT), and MINT (Thailand's only top 20 global hotel chain).</li>
<li>
Recent listings. CRC was listed in 2020 and is considered an important recovery play. In particular, we are excited about two new listings in 2021 as well, namely NForce and Kerry (Thailand).</li>
<li>
Small cap rebounds. Interestingly, a number of small cap stocks can also stand out and provide your portfolio with alpha. These include contractor SKY, massage operator SPA, and the country's incredibly fast-growing gaming company AS (AsiaSoft).</li>
</ul>

For the upcoming year, we have selected 10 stocks for our country portfolio, and they can be broken down into three groups: 

Big cap picks. Big caps tend to outperform during times of strong QE flows. These include our top pick in large sectors except energy (BBL, AIS), the world's most valuable airport (AOT), and MINT (Thailand's only top 20 global hotel chain).

Recent listings. CRC was listed in 2020 and is considered an important recovery play. In particular, we are excited about two new listings in 2021 as well, namely NForce and Kerry (Thailand).

Small cap rebounds. Interestingly, a number of small cap stocks can also stand out and provide your portfolio with alpha. These include contractor SKY, massage operator SPA, and the country's incredibly fast-growing gaming company AS (AsiaSoft).


Thai Strategy 2021 (Part 2): Top 10 Stock Picks

AIS recently invested in the online gaming industry. We took the opportunity to visit the country's largest mobile operator and second largest online gaming company. This is a what we found:<ul>
<li>AIS reported 3.3% earnings QoQ increase despite a 2.4% decline in revenues when its stores were closed as a result of the pandemic due to a combination of: 1) marketing &amp; administrative cost reduction and 2) increase in contribution from broadband subscribers.</li>
<li>While the largest operator still expects a 1-5% decline in revenues and EBITDA, they are not exactly standing still, diversifying into games, cloud, insurance, and online marketing, while trying to make the most of the spectrum they recently won.</li>
<li>AsiaSoft reported a 6-fold increase in profits on the back of Bt450m revenues (more than double of last year), 60% of which came from outside Thailand! We were literally shocked with the results  (+197% revenue growth in Singapore for eg.) and will go all-in on this stock now.</li>
<li>We are not too alarmed by COM7's 8% QoQ and 5% YoY earnings decline given the store closure. Rather, it shows resilience and resourcefulness that they shifted some sales to online channels and sold at cost or even loss to garner cash flows needed for survival. Generating Bt271m of profits at all in Q2'20 was a feat in itself and is likely due to its contract with True Shop for management.</li>
</ul>

AIS recently invested in the online gaming industry. We took the opportunity to visit the country's largest mobile operator and second largest online gaming company. This is a what we found:
AIS reported 3.3% earnings QoQ increase despite a 2.4% decline in revenues when its stores were closed as a result of the pandemic due to a combination of: 1) marketing &amp; administrative cost reduction and 2) increase in contribution from broadband subscribers.
While the largest operator still expects a 1-5% decline in revenues and EBITDA, they are not exactly standing still, diversifying into games, cloud, insurance, and online marketing, while trying to make the most of the spectrum they recently won.
AsiaSoft reported a 6-fold increase in profits on the back of Bt450m revenues (more than double of last year), 60% of which came from outside Thailand! We were literally shocked with the results  (+197% revenue growth in Singapore for eg.) and will go all-in on this stock now.
We are not too alarmed by COM7's 8% QoQ and 5% YoY earnings decline given the store closure. Rather, it shows resilience and resourcefulness that they shifted some sales to online channels and sold at cost or even loss to garner cash flows needed for survival. Generating Bt271m of profits at all in Q2'20 was a feat in itself and is likely due to its contract with True Shop for management.


Telecom Review (Sept 2020): AIS and AsiaSoft Get Aggressive on Gaming

Total Access Communication / Equity Bottom-Up

On April 4, we attended the DTAC shareholders' meeting and listened to how management defended their strategic decisions in various areas such as legal settlements, marketing, and spectrum bidding. This is our take on their responses to various issue:<ul>
<li>
Settlement with CAT. DTAC plans to do a further settlement worth Bt9.05bn nett with CAT to resolve all past bilateral issues, but will resume paying dividends in H2'19.</li>
<li>
Spectrum. Since they still have less spectrum than both AIS and True Move, we can't really fault them for bidding for the 900MHz spectrum, especially since competition has come down considerably.</li>
<li>
Marketing. Like AIS, they are looking beyond just voice airtime. Mobile gaming is one area they will look at. DTAC's subsidy on game-centric iPhones and the data airtime that comes with it is significantly more than both True Move and AIS.</li>
<li>
Others. They also managed to get a raise for the Chairman and do finishing touches on the PaySabai  (a payment platform) consolidation. In our view, these are really formalities at this phase, since PaySabai is pretty much wholly owned.</li>
</ul>

On April 4, we attended the DTAC shareholders' meeting and listened to how management defended their strategic decisions in various areas such as legal settlements, marketing, and spectrum bidding. This is our take on their responses to various issue:

Settlement with CAT. DTAC plans to do a further settlement worth Bt9.05bn nett with CAT to resolve all past bilateral issues, but will resume paying dividends in H2'19.

Spectrum. Since they still have less spectrum than both AIS and True Move, we can't really fault them for bidding for the 900MHz spectrum, especially since competition has come down considerably.

Marketing. Like AIS, they are looking beyond just voice airtime. Mobile gaming is one area they will look at. DTAC's subsidy on game-centric iPhones and the data airtime that comes with it is significantly more than both True Move and AIS.

Others. They also managed to get a raise for the Chairman and do finishing touches on the PaySabai  (a payment platform) consolidation. In our view, these are really formalities at this phase, since PaySabai is pretty much wholly owned.


Telecom Review (April 2019): DTAC Calls for Truce With CAT

AsiaSoft turned their first quarterly profit like…ever. In Q1’16, they were still losing almost Bt60m, but they managed to eke out Bt10m profit this year. According to management, a big part of this is just better cost management yo. They’re still in the process of looking for a CFO, but they have pooled together many central functions into Singapore, especially those were the content are in English…This includes Malaysia and Philippines, just in case you were wondering. It’s also the first time…

AsiaSoft turned their first quarterly profit like…ever. In Q1’16, they were still losing almost Bt60m, but they managed to eke out Bt10m profit this year. According to management, a big part of this is just better cost management yo. They’re still in the process of looking for a CFO, but they have pooled together many central functions into Singapore, especially those were the content are in English…This includes Malaysia and Philippines, just in case you were wondering. It’s also the first time…

AsiaSoft's First Profit & Ride With the Devils

Revisiting AsiaSoft. We met AsiaSoft last year, and things have started to look up for them somewhat since then, but we still wouldn’t recommend buying any of the three companies we met today yo. Losses may have halved at AsiaSoft, but the revenues have barely grown. In fact, it’s dropped a little. The main reason things are looking up appears to be cost cuts and divestments of the money-losing Vietnam subsidiary, but as Jack Welch of GE once said, “How much cheese can you take off the burger…

Revisiting AsiaSoft. We met AsiaSoft last year, and things have started to look up for them somewhat since then, but we still wouldn’t recommend buying any of the three companies we met today yo. Losses may have halved at AsiaSoft, but the revenues have barely grown. In fact, it’s dropped a little. The main reason things are looking up appears to be cost cuts and divestments of the money-losing Vietnam subsidiary, but as Jack Welch of GE once said, “How much cheese can you take off the burger…

Thailand

Asphere Innovations Public Company Limited is a digital technology holding company primarily operating in Southeast Asia. It specializes in publishing and developing online and mobile games across various genres, including MMORPG, Casual, SRPG, FPS, and MOBA, under its PlayPark brand. The company also focuses on Blockchain & Innovation Technologies, Marketing Technologies, and Corporate Venture Capital. Asphere Innovations was founded in 2001 and is headquartered in Bangkok, Thailand.

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Asphere Innovations (AS-R TB)

Thai Strategy 2021 (Part 2): Top 10 Stock Picks

Go with big caps (BBL, MINT) to catch the QE wave. Give the new listings (CRC, KEX) a shot, and don't miss out on AsiaSoft, our ultimate top pick.

Athaporn Arayasantiparb, CFA

Telecom Review (Sept 2020): AIS and AsiaSoft Get Aggressive on Gaming

AIS reported a minor earnings decline in Q2'20, while AsiaSoft reported a six-fold increase in profits. AIS recently expanded into the game niche.

Athaporn Arayasantiparb, CFA

Telecom Review (April 2019): DTAC Calls for Truce With CAT

On April 4, we attended the DTAC shareholders' meeting and listened to how management defended their strategic decisions in various areas such as...

Athaporn Arayasantiparb, CFA

AsiaSoft's First Profit & Ride With the Devils

AsiaSoft turned their first quarterly profit like…ever. In Q1’16, they were still losing almost Bt60m, but they managed to eke out Bt10m profit...

Athaporn Arayasantiparb, CFA

Rebooting Asiasoft

Revisiting AsiaSoft. We met AsiaSoft last year, and things have started to look up for them somewhat since then, but we still wouldn’t recommend...

Athaporn Arayasantiparb, CFA

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