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

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Thai Equity - Bottom-up - Equities

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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

<ul>
<li>We maintain HOLD rating and TP of Bt5.09 based on TRUE’s voluntary tender offer price. The company incurred its largest ever quarterly loss of Bt2.8bn as mobile ARPU continued </li>
<li>Analyst meeting details TRUE and DTAC are currently assessing the impact of the imposed conditions on the synergistic value of the MergeCo and its impact on Thai consumers.According to management</li>
<li>The merger will likely be completed by 1H23. TRUE and DTAC will have 90 days from October 20,2022 to ask for further clarifications from the NBTC. After receiving full clarification</li>
</ul>


We maintain HOLD rating and TP of Bt5.09 based on TRUE’s voluntary tender offer price. The company incurred its largest ever quarterly loss of Bt2.8bn as mobile ARPU continued 
Analyst meeting details TRUE and DTAC are currently assessing the impact of the imposed conditions on the synergistic value of the MergeCo and its impact on Thai consumers.According to management
The merger will likely be completed by 1H23. TRUE and DTAC will have 90 days from October 20,2022 to ask for further clarifications from the NBTC. After receiving full clarification


TRUE : Hold Out Until Voluntary Tender Offer Phase

<ul>
<li>We downgrade to HOLD from BUY rating and maintain TP of Bt5.09based on TRUE’s tender offer price due to limited upside and bleak 2022-23E outlook. Its 2Q22 core operation incurred</li>
<li>2Q22 core earnings worsened YoY Its 2Q22 core operation incurred the 7th consecutve quarterly loss of Bt703m loss.Larger YoY loss was due to narrowed gross margin, while lower QoQ loss </li>
<li>Revenue was at Bt34bn (flat YoY,-3%QoQ).Flat YoY was because large subscriber gains was offset by decline in mobile ARPU and TRUE Online revenue.QoQ decline was due to lower handset sales</li>
</ul>


We downgrade to HOLD from BUY rating and maintain TP of Bt5.09based on TRUE’s tender offer price due to limited upside and bleak 2022-23E outlook. Its 2Q22 core operation incurred
2Q22 core earnings worsened YoY Its 2Q22 core operation incurred the 7th consecutve quarterly loss of Bt703m loss.Larger YoY loss was due to narrowed gross margin, while lower QoQ loss 
Revenue was at Bt34bn (flat YoY,-3%QoQ).Flat YoY was because large subscriber gains was offset by decline in mobile ARPU and TRUE Online revenue.QoQ decline was due to lower handset sales


TRUE : Market Competition Should Not Worsen

<ul>
<li>Conference meeting on Wednesday came with negative news on 22E earnings prospects. We maintain our BUY rating with TP of Bt5.09, based on the tender offer price.</li>
<li>Management expects no pushback in terms of creditor approval.We believe that the merger will also receive regulatory approval,but with several regulations to also protect consumers, which could impact NewCo’s potential.</li>
<li>We revise 22E earnings down to Bt2.9bn loss from Bt736m loss, previously, to reflect higher D&amp;A costs and ARPU decline due to harsh competition in 2022.</li>
</ul>


Conference meeting on Wednesday came with negative news on 22E earnings prospects. We maintain our BUY rating with TP of Bt5.09, based on the tender offer price.
Management expects no pushback in terms of creditor approval.We believe that the merger will also receive regulatory approval,but with several regulations to also protect consumers, which could impact NewCo’s potential.
We revise 22E earnings down to Bt2.9bn loss from Bt736m loss, previously, to reflect higher D&amp;A costs and ARPU decline due to harsh competition in 2022.


TRUE: Merger Still Progressing but Large Losses Expected in 22E

<ul>
<li>Conference call came with positive tone on 22E performance. Upgrade to HOLD rating with TP of Bt5.09 based on the tender offer price under the DTAC merger. However</li>
<li>TRUE’s stock price crashed yesterday as investors have sold on fact of merger progress. We will revise our forecast once management of TRUE reveals detailed plans regarding the merger.</li>
<li>Maintain our 22E forecast that TRUE will not be profitable, despite improvements. TRUE’s management expects to turn a profit in 2022. However, we do not believe that the revenue growth</li>
</ul>


Conference call came with positive tone on 22E performance. Upgrade to HOLD rating with TP of Bt5.09 based on the tender offer price under the DTAC merger. However
TRUE’s stock price crashed yesterday as investors have sold on fact of merger progress. We will revise our forecast once management of TRUE reveals detailed plans regarding the merger.
Maintain our 22E forecast that TRUE will not be profitable, despite improvements. TRUE’s management expects to turn a profit in 2022. However, we do not believe that the revenue growth


TRUE: 22E Net Profit Will Continue to Be at a Loss, Despite Management’s View

<ul>
<li>We initiate coverage of TRUE with a BUY rating at a target price of Bt5.09, based on the tender offer price under the DTAC merger. Without this tender offer</li>
<li>Merger highly likely to occur, Merger with DTAC unlikely to lead to attractive prospects until 2024</li>
<li>Accelerating use of 5G will lift ARPU back into uptrend, Improving competitive position on cost of profitability</li>
</ul>


We initiate coverage of TRUE with a BUY rating at a target price of Bt5.09, based on the tender offer price under the DTAC merger. Without this tender offer
Merger highly likely to occur, Merger with DTAC unlikely to lead to attractive prospects until 2024
Accelerating use of 5G will lift ARPU back into uptrend, Improving competitive position on cost of profitability


TRUE: Unlikely to Produce Profits Until 2024 Despite Strong Operations

Thailand

True Corporation PCL is an integrated telecommunications provider. The Company offers a wide range of voice, video, and data services, including dial-up and broadband Internet services, pay television, fixed-line phone, online games, and mobile phone services.

True Corp Pcl (TRUE TB)

TRUE : Hold Out Until Voluntary Tender Offer Phase

We maintain HOLD rating and TP of Bt5.09 based on TRUE’s voluntary tender offer price. The company incurred its largest ever quarterly loss of...

Pi Securities PCL, Thailand

TRUE : Market Competition Should Not Worsen

We downgrade to HOLD from BUY rating and maintain TP of Bt5.09 based on TRUE’s tender offer price due to limited upside and bleak 2022-23E...

Pi Securities PCL, Thailand

TRUE: Merger Still Progressing but Large Losses Expected in 22E

Conference meeting on Wednesday came with negative news on 22E earnings prospects. We maintain our BUY rating with TP of Bt5.09, based on the...

Pi Securities PCL, Thailand

TRUE: 22E Net Profit Will Continue to Be at a Loss, Despite Management’s View

Conference call came with positive tone on 22E performance. Upgrade to HOLD rating with TP of Bt5.09 based on the tender offer price under the DTAC...

Pi Securities PCL, Thailand

TRUE: Unlikely to Produce Profits Until 2024 Despite Strong Operations

We initiate coverage of TRUE with a BUY rating at a target price of Bt5.09, based on the tender offer price under the DTAC merger. Without this...

Pi Securities PCL, Thailand