Daily BriefsThailand

Thailand: True Corp Pcl, Erawan Group and more

In today’s briefing:

  • DTAC/True Merger VTO Risk/Reward
  • ERW: Operational Losses Continued to Decline in 1Q22

DTAC/True Merger VTO Risk/Reward

By Arun George

  • At the last close prices, Total Access Communication (DTAC TB) and True Corp Pcl (TRUE TB)’s gross spread to the dividend-adjusted VTO price is 5.6% and 11.1%, respectively.  
  • The merger has received DTAC and True shareholder approvals. The merger hinges on regulatory approval.
  • The LONG True and SHORT DTAC trade is attractive, with the current spread of 5.5% trading above the average spread since the merger announcement of 3.4% (ex. transaction costs).

ERW: Operational Losses Continued to Decline in 1Q22

By Pi Research

  • Analyst meeting came out with positive tone regarding 22E outlook.We maintain BUY rating with TP Bt4.20 derived from DCF valuation (WACC=7% & Terminal growth= 2%) implying 10% discount to 23.1xPE’23.
  • The company reported net loss of Bt313m in 1Q22 compared to net loss of Bt492m in 1Q21 and net loss of Bt246 in 4Q21 in line with our expectation.
  • Excluding extra ordinary items, the operational losses declined YoY and QoQ to Bt313m since revenue almost doubled YoY  and increased 4% QoQ to Bt646m after bottoming out in 3Q21.

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