TEAMG: Value Play in Consulting to Benefit from Government Stimulus

We maintain a BUY recommendation on TEAMG with an unchanged target price of Bt2.81, implying an upside of 29% from the current share price. We derive our target price from a DCF-based valuation using a WACC of 7.4% and a terminal growth rate of 2%. We apply a 15% small-cap discount.

Investment thesis:

• Government stimulus leads to large-scale investment projects
• Introducing advanced building software to stay competitive
• Continued market expansion in neighboring countries

Interim: TEAMG’s revenue has been resilient as revenue from government projects has grown. Though, these projects have a lower gross margin. Based on the 9M20 results, we revise down our 2020E forecast slightly.

Risks: Recruitment of qualified personnel, delay in project completion, changes in government policies, increased competition from overseas, failure to keep pace with technological trends.