Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

Total Access Communication / Equity Bottom-Up

<ul><li>The recent technical disruption raised concern over DTAC's inferior network quality, which leads us to trim service revenue and the bottom line.</li><li>Our Buy rating on DTAC is based on its undemanding valuation, trading at 2021E EV/EBITDA of 3.7x, with 18% upside to our new 2021E DCF-based target price of Bt39.80 (WACC 8.7%, LT growth 2%).</li><li>The consent to utilize TOT's 2300MHz for 5G services will be the catalyst.</li></ul>

The recent technical disruption raised concern over DTAC's inferior network quality, which leads us to trim service revenue and the bottom line.Our Buy rating on DTAC is based on its undemanding valuation, trading at 2021E EV/EBITDA of 3.7x, with 18% upside to our new 2021E DCF-based target price of Bt39.80 (WACC 8.7%, LT growth 2%).The consent to utilize TOT's 2300MHz for 5G services will be the catalyst.

<ul><li>DTAC's 3Q20 earnings came in below view on lower service revenue.</li><li>Our Buy rating on DTAC is based on the stock's undemanding valuation, trading at 2021E EV/EBITDA of 3.3x, with an estimated yield of 3.5%.</li><li>The consent to utilize TOT's 2300MHz for 5G services and the early awarding of 700MHz would be the catalysts.</li></ul>

DTAC's 3Q20 earnings came in below view on lower service revenue.Our Buy rating on DTAC is based on the stock's undemanding valuation, trading at 2021E EV/EBITDA of 3.3x, with an estimated yield of 3.5%.The consent to utilize TOT's 2300MHz for 5G services and the early awarding of 700MHz would be the catalysts.

<ul><li>We expect DTAC to deliver slightly weak earnings in 3Q20E thanks to lower service revenue.</li><li>With 36% upside to our 2020E TP of Bt45.50, we maintain a Buy rating.</li><li>We keep our earnings estimate unchanged, with potential upside risk in case the company announces better-than-expected 3Q20E results on the back of network Opex cost control and lower-than-expected handset subsidies and/or marketing expenses.</li></ul>

We expect DTAC to deliver slightly weak earnings in 3Q20E thanks to lower service revenue.With 36% upside to our 2020E TP of Bt45.50, we maintain a Buy rating.We keep our earnings estimate unchanged, with potential upside risk in case the company announces better-than-expected 3Q20E results on the back of network Opex cost control and lower-than-expected handset subsidies and/or marketing expenses.

DTAC: Attractive Valuation - Buy (2020E TP: Bt45.50)

<ul><li>DTAC delivered better-than-expected 2Q20 earnings, driven by effective cost optimization.</li><li>Its effective cost control and new Capex guidance have led us to revise up its 2020E earnings by 14% to Bt5.1bn.</li><li>Given DTAC's well-managed profitability, we upgrade the rating to Buy, with the new 2020E DCF-based TP of Bt45.50 from Bt42.3 earlier.</li></ul>

DTAC delivered better-than-expected 2Q20 earnings, driven by effective cost optimization.Its effective cost control and new Capex guidance have led us to revise up its 2020E earnings by 14% to Bt5.1bn.Given DTAC's well-managed profitability, we upgrade the rating to Buy, with the new 2020E DCF-based TP of Bt45.50 from Bt42.3 earlier.

Well-managed Profitability Amidst Peak of COVID-19

<ul><li>The full extent of the COVID-19 impact should become evident in 2Q20E, but it is expected that DTAC will be able to sustain the EBITDA margin QoQ thanks to effective cost control.</li><li>As the worst has passed, our Hold rating is maintained.</li><li>DTAC provided an update, saying the market remained competitive in 2Q20 but was relatively toned down QoQ.</li></ul>

The full extent of the COVID-19 impact should become evident in 2Q20E, but it is expected that DTAC will be able to sustain the EBITDA margin QoQ thanks to effective cost control.As the worst has passed, our Hold rating is maintained.DTAC provided an update, saying the market remained competitive in 2Q20 but was relatively toned down QoQ.

Cost Management to Stabilize EBITDA Margin in 2Q20E

Thailand

Total Access Communication Public Company Limited, commonly known as DTAC, is a leading mobile telecommunications operator in Thailand. It provides a range of services including 5G, 4G, 3G, and 2G mobile phone services, mobile internet, voice, SMS/MMS, and other connectivity services, along with selling mobile handsets and starter kits. The company is headquartered in Bangkok, Thailand, and was founded on August 31, 1989.

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Total Access Communication (DTAC TB)

Total Access Communication Plc. (DTAC)

The recent technical disruption raised concern over DTAC's inferior network quality, which leads us to trim service revenue and the bottom...

Krungthai XSpring

Total Access Communication Plc. (DTAC)

DTAC's 3Q20 earnings came in below view on lower service revenue. Our Buy rating on DTAC is based on the stock's undemanding valuation, trading at...

Krungthai XSpring

DTAC: Attractive Valuation - Buy (2020E TP: Bt45.50)

We expect DTAC to deliver slightly weak earnings in 3Q20E thanks to lower service revenue. With 36% upside to our 2020E TP of Bt45.50, we maintain...

Krungthai XSpring

Well-managed Profitability Amidst Peak of COVID-19

DTAC delivered better-than-expected 2Q20 earnings, driven by effective cost optimization. Its effective cost control and new Capex guidance have...

Krungthai XSpring

Cost Management to Stabilize EBITDA Margin in 2Q20E

The full extent of the COVID-19 impact should become evident in 2Q20E, but it is expected that DTAC will be able to sustain the EBITDA margin QoQ...

Krungthai XSpring

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