1Q17 results beat expectation
Total Access Communication Sell (17E TP Bt28.50)
Earnings Review
Close Bt42.75
ICT
Beat forecast/Below forecast/In line
April 21, 2017
1Q17 results beat expectation Results date: April 20, 2017 Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.767
1.216
KT ZMICO vs. consensus Share data
‐12.6%
27.5%
Reuters / Bloomberg
DTAC.BK/DTAC TB
Paid‐up Shares (m)
2,367.81
Par (Bt)
2.00
Market cap (Bt bn / US$ m)
101.00/2,946.00
Foreign limit / actual (%)
49.00/45.07
52 week High / Low (Bt)
46.75/28.00
Avg. daily T/O (shares 000) NVDR (%)
13,999.00 4.90
Estimated free float (%)
29.36
Beta
1.38
URL
www.dtac.co.th
CGR Anti‐corruption
Level 4 (Certified)
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
SELL maintained DTAC posted better‐than‐expected earnings in 1Q17. Nevertheless, we do not expect to see near‐term earnings improvement given the intense market competition. Its ability to secure new spectrum would be a catalyst for re‐rating. 1Q17 results ahead of forecast DTAC posted 1Q17 NP of Bt229mn (EPS: Bt0.10), ahead of our forecast (Bt124mn) and the street estimate (Bt176mn). This was due to lower‐ than‐expected SG&A expenses at 19.7% vs. our forecast of 21%. Note that DTAC made an accounting adjustment by reclassifying handset‐ related expenses to better reflect the nature of the expenses. This caused the net loss of handset sales to widen to Bt958mn (‐39% margin) vs. an Bt835mn loss (‐20.5%) in 4Q16. Excluding the adjustment, SG&A expenses were at 20.9% (in‐line) while the handset loss narrowed to Bt723mn (‐27% margin). Bottom line remained weak YoY DTAC’s NP fell 82%YoY due to cost acceleration. Cost of services ex IC gained 9%YoY due to network expansion, which drove up D&A (+21%YoY) and network OPEX (+24%YoY). Its service revenue ex IC fell 1.3%YoY due to lower voice revenue (‐34%YoY). Data revenue increased by 26%YoY thanks to higher usage backed by attractive price plans, handset bundling offers and improving 4G network quality. EBITDA decreased 6%YoY to Bt6.9bn, but the EBITDA margin improved to 34.9% from 33.8% in 1Q16 on lower revenue. On a QoQ basis, its NP surged six‐fold owing to higher EBITDA and a Bt146mn restructuring expense booked in 4Q16. Financial position remained strong In 1Q17, its financial position remained healthy with positive operating cash flow and stable net debt to EBITDA at 1.1x. DTAC wiped out the retained loss on its separate financial statement by reducing the legal reserve and share premium, paving the way for a dividend payment. Earnings estimates unchanged DTAC has kept its full‐year guidance unchanged, with flattish service revenue and EBITDA. Its 1Q17 performance was not far off from our full‐ year forecast; thus, our earnings estimates are maintained. Still hope for TOT’s 2300MHz The door for DTAC to win TOT’s 2300MHz partnership contract is still open. As DTAC has the greatest incentive for this spectrum among the existing operators, we believe that its proposal should be attractive enough to be on TOT’s shortlist for further negotiation. Although DTAC may face additional near‐term cost pressure in the event that it wins the contract with TOT, this may trigger a stock re‐rating on adding back its terminal value. TOT has recently said that the shortlist will be announced by the end of April. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm EPS (Bt) Norm EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) P/BV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 87,753 5,893 2.49 2.61 ‐42.4% 2.41 11.50 2015 12.15 3.92 2.63 8.0% 20.7% 395.1%
2016 82,478 2,086 0.88 1.01 ‐61.3% 0.42 11.46 2016 47.11 4.63 3.62 1.0% 8.8% 324.6%
2017E 82,096 1,584 0.67 0.67 ‐33.9% 0.47 11.70 2017E 63.92 4.53 3.65 1.1% 5.8% 228.7%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 82,496 3,679 1.55 1.55 132.3% 1.09 12.71 2018E 27.52 5.21 3.36 2.5% 12.7% 322.6%
2019E 82,693 6,868 2.90 2.90 86.7% 2.03 14.05 2019E 14.74 7.51 3.04 4.7% 21.7% 379.0%
Figure 1: Earnings review Profit and Loss Statement (Btmn) Fiscal Year‐Ended Dec. 1Q16 Service Revenue 17,621 Sales 3,836 Revenue 21,676 Gross Profit 6,373 EBITDA 7,327 Net profit (loss) 1,256 Core profit (loss) 1,183 Reported EPS (THB) 0.53 Gross margin (%) 29.4% EBITDA margin (%) 33.8% Net margin (%) 5.8% Current ratio (x) 0.72 4.73 Interest coverage (x) Debt to equity (x) 3.22 BVPS (Bt) 11.51 ROE (%) 20.8%
2Q16 17,195 2,331 19,799 5,326 6,606 141 539 0.06 26.9% 33.4% 0.7% 0.74 1.42 3.14 11.57 17.5%
3Q16 17,320 1,949 19,537 5,288 7,226 659 652 0.28 27.1% 37.0% 3.4% 0.84 3.21 3.23 11.43 13.2%
4Q16 17,116 4,064 21,465 4,645 6,757 30 169 0.01 21.6% 31.5% 0.1% 0.83 0.93 3.25 11.46 11.2%
1Q17 17,071 2,446 19,748 4,451 6,891 229 213 0.10 22.5% 34.9% 1.2% 0.86 1.68 3.14 11.56 7.7%
%QoQ ‐0.3% ‐39.8% ‐8.0% ‐4.2% 2.0% 661.1% 26.0% 661.1% 0.9% 3.4% 1.0%
0.8%
%YoY ‐3.1% ‐36.2% ‐8.9% ‐30.2% ‐5.9% ‐81.8% ‐82.0% ‐81.8% ‐6.9% 1.1% ‐4.6%
2017E 68,822 12,242 82,096 20,735 27,432 1,584 1,584 0.67 25.3% 33.4% 1.9% 1.05 2.30 3.13 0.8% 11.70 5.8%
YTD %YoY (% of 2017E) ‐0.6% 24.8% 0.5% 20.0% ‐0.5% 24.1% ‐4.1% 21.5% ‐1.7% 25.1% ‐24.1% 14.5% ‐33.9% 13.4% ‐24.1% 14.5% ‐1.0% ‐0.4% ‐0.6%
2.1%
Source: DTAC and KT Zmico Research Figure 2: PER and EV/EBITDA band PER (x)
12.0
80.0 70.0
EV/EBITDA (x)
+2.0SD = 10.6x
10.0 +1SD = 8.4x
60.0
+3SD = 53.8x
50.0 40.0
8.0 6.0
Average= 6.1x
4.0
‐1SD = 3.9x
+1SD = 31.5x
30.0 20.0
Avearge = 20.3x ‐1SD = 9.2x Jun‐07 Nov‐07 Mar‐08 Aug‐08 Dec‐08 May‐09 Sep‐09 Feb‐10 Jun‐10 Nov‐10 Mar‐11 Aug‐11 Dec‐11 May‐12 Oct‐12 Feb‐13 Jul‐13 Nov‐13 Mar‐14 Aug‐14 Jan‐15 May‐15 Oct‐15 Feb‐16 Jul‐16 Nov‐16 Apr‐17
‐
‐1.5SD = 2.8x
2.0 0.0 Jun‐07 Nov‐07 Apr‐08 Aug‐08 Jan‐09 Jun‐09 Oct‐09 Mar‐10 Aug‐10 Dec‐10 May‐11 Oct‐11 Mar‐12 Jul‐12 Dec‐12 May‐13 Sep‐13 Feb‐14 Jul‐14 Nov‐14 Apr‐15 Sep‐15 Feb‐16 Jun‐16 Nov‐16 Apr‐17
10.0
Source: Bloomberg and KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: Operating performance
Source: Bloomberg and KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note:
KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TFD, CI, TTL, NMG. Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Satisfactory (scores: 60 – 69) Very Good (scores: 80 – 89)
Good (scores: 70 – 79)
Anti‐corruption Progress Indicator
Pass (scores: 50 – 59)
No Logo N/A (scores: below 50)
Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy DISCLAIMER
This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
Earnings Review
Close Bt42.75
ICT
Beat forecast/Below forecast/In line
April 21, 2017
1Q17 results beat expectation Results date: April 20, 2017 Price Performance (%)
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.767
1.216
KT ZMICO vs. consensus Share data
‐12.6%
27.5%
Reuters / Bloomberg
DTAC.BK/DTAC TB
Paid‐up Shares (m)
2,367.81
Par (Bt)
2.00
Market cap (Bt bn / US$ m)
101.00/2,946.00
Foreign limit / actual (%)
49.00/45.07
52 week High / Low (Bt)
46.75/28.00
Avg. daily T/O (shares 000) NVDR (%)
13,999.00 4.90
Estimated free float (%)
29.36
Beta
1.38
URL
www.dtac.co.th
CGR Anti‐corruption
Level 4 (Certified)
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
SELL maintained DTAC posted better‐than‐expected earnings in 1Q17. Nevertheless, we do not expect to see near‐term earnings improvement given the intense market competition. Its ability to secure new spectrum would be a catalyst for re‐rating. 1Q17 results ahead of forecast DTAC posted 1Q17 NP of Bt229mn (EPS: Bt0.10), ahead of our forecast (Bt124mn) and the street estimate (Bt176mn). This was due to lower‐ than‐expected SG&A expenses at 19.7% vs. our forecast of 21%. Note that DTAC made an accounting adjustment by reclassifying handset‐ related expenses to better reflect the nature of the expenses. This caused the net loss of handset sales to widen to Bt958mn (‐39% margin) vs. an Bt835mn loss (‐20.5%) in 4Q16. Excluding the adjustment, SG&A expenses were at 20.9% (in‐line) while the handset loss narrowed to Bt723mn (‐27% margin). Bottom line remained weak YoY DTAC’s NP fell 82%YoY due to cost acceleration. Cost of services ex IC gained 9%YoY due to network expansion, which drove up D&A (+21%YoY) and network OPEX (+24%YoY). Its service revenue ex IC fell 1.3%YoY due to lower voice revenue (‐34%YoY). Data revenue increased by 26%YoY thanks to higher usage backed by attractive price plans, handset bundling offers and improving 4G network quality. EBITDA decreased 6%YoY to Bt6.9bn, but the EBITDA margin improved to 34.9% from 33.8% in 1Q16 on lower revenue. On a QoQ basis, its NP surged six‐fold owing to higher EBITDA and a Bt146mn restructuring expense booked in 4Q16. Financial position remained strong In 1Q17, its financial position remained healthy with positive operating cash flow and stable net debt to EBITDA at 1.1x. DTAC wiped out the retained loss on its separate financial statement by reducing the legal reserve and share premium, paving the way for a dividend payment. Earnings estimates unchanged DTAC has kept its full‐year guidance unchanged, with flattish service revenue and EBITDA. Its 1Q17 performance was not far off from our full‐ year forecast; thus, our earnings estimates are maintained. Still hope for TOT’s 2300MHz The door for DTAC to win TOT’s 2300MHz partnership contract is still open. As DTAC has the greatest incentive for this spectrum among the existing operators, we believe that its proposal should be attractive enough to be on TOT’s shortlist for further negotiation. Although DTAC may face additional near‐term cost pressure in the event that it wins the contract with TOT, this may trigger a stock re‐rating on adding back its terminal value. TOT has recently said that the shortlist will be announced by the end of April. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm EPS (Bt) Norm EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) P/BV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 87,753 5,893 2.49 2.61 ‐42.4% 2.41 11.50 2015 12.15 3.92 2.63 8.0% 20.7% 395.1%
2016 82,478 2,086 0.88 1.01 ‐61.3% 0.42 11.46 2016 47.11 4.63 3.62 1.0% 8.8% 324.6%
2017E 82,096 1,584 0.67 0.67 ‐33.9% 0.47 11.70 2017E 63.92 4.53 3.65 1.1% 5.8% 228.7%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 82,496 3,679 1.55 1.55 132.3% 1.09 12.71 2018E 27.52 5.21 3.36 2.5% 12.7% 322.6%
2019E 82,693 6,868 2.90 2.90 86.7% 2.03 14.05 2019E 14.74 7.51 3.04 4.7% 21.7% 379.0%
Figure 1: Earnings review Profit and Loss Statement (Btmn) Fiscal Year‐Ended Dec. 1Q16 Service Revenue 17,621 Sales 3,836 Revenue 21,676 Gross Profit 6,373 EBITDA 7,327 Net profit (loss) 1,256 Core profit (loss) 1,183 Reported EPS (THB) 0.53 Gross margin (%) 29.4% EBITDA margin (%) 33.8% Net margin (%) 5.8% Current ratio (x) 0.72 4.73 Interest coverage (x) Debt to equity (x) 3.22 BVPS (Bt) 11.51 ROE (%) 20.8%
2Q16 17,195 2,331 19,799 5,326 6,606 141 539 0.06 26.9% 33.4% 0.7% 0.74 1.42 3.14 11.57 17.5%
3Q16 17,320 1,949 19,537 5,288 7,226 659 652 0.28 27.1% 37.0% 3.4% 0.84 3.21 3.23 11.43 13.2%
4Q16 17,116 4,064 21,465 4,645 6,757 30 169 0.01 21.6% 31.5% 0.1% 0.83 0.93 3.25 11.46 11.2%
1Q17 17,071 2,446 19,748 4,451 6,891 229 213 0.10 22.5% 34.9% 1.2% 0.86 1.68 3.14 11.56 7.7%
%QoQ ‐0.3% ‐39.8% ‐8.0% ‐4.2% 2.0% 661.1% 26.0% 661.1% 0.9% 3.4% 1.0%
0.8%
%YoY ‐3.1% ‐36.2% ‐8.9% ‐30.2% ‐5.9% ‐81.8% ‐82.0% ‐81.8% ‐6.9% 1.1% ‐4.6%
2017E 68,822 12,242 82,096 20,735 27,432 1,584 1,584 0.67 25.3% 33.4% 1.9% 1.05 2.30 3.13 0.8% 11.70 5.8%
YTD %YoY (% of 2017E) ‐0.6% 24.8% 0.5% 20.0% ‐0.5% 24.1% ‐4.1% 21.5% ‐1.7% 25.1% ‐24.1% 14.5% ‐33.9% 13.4% ‐24.1% 14.5% ‐1.0% ‐0.4% ‐0.6%
2.1%
Source: DTAC and KT Zmico Research Figure 2: PER and EV/EBITDA band PER (x)
12.0
80.0 70.0
EV/EBITDA (x)
+2.0SD = 10.6x
10.0 +1SD = 8.4x
60.0
+3SD = 53.8x
50.0 40.0
8.0 6.0
Average= 6.1x
4.0
‐1SD = 3.9x
+1SD = 31.5x
30.0 20.0
Avearge = 20.3x ‐1SD = 9.2x Jun‐07 Nov‐07 Mar‐08 Aug‐08 Dec‐08 May‐09 Sep‐09 Feb‐10 Jun‐10 Nov‐10 Mar‐11 Aug‐11 Dec‐11 May‐12 Oct‐12 Feb‐13 Jul‐13 Nov‐13 Mar‐14 Aug‐14 Jan‐15 May‐15 Oct‐15 Feb‐16 Jul‐16 Nov‐16 Apr‐17
‐
‐1.5SD = 2.8x
2.0 0.0 Jun‐07 Nov‐07 Apr‐08 Aug‐08 Jan‐09 Jun‐09 Oct‐09 Mar‐10 Aug‐10 Dec‐10 May‐11 Oct‐11 Mar‐12 Jul‐12 Dec‐12 May‐13 Sep‐13 Feb‐14 Jul‐14 Nov‐14 Apr‐15 Sep‐15 Feb‐16 Jun‐16 Nov‐16 Apr‐17
10.0
Source: Bloomberg and KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 3: Operating performance
Source: Bloomberg and KT Zmico Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note:
KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, M‐CHAI, POMPUI, TFD, CI, TTL, NMG. Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Satisfactory (scores: 60 – 69) Very Good (scores: 80 – 89)
Good (scores: 70 – 79)
Anti‐corruption Progress Indicator
Pass (scores: 50 – 59)
No Logo N/A (scores: below 50)
Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy DISCLAIMER
This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
KT ZMICO Securities Company Limited Head Office
WWW.KTZMICO.COM
8th, 15th‐17th,19th, 21st Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok, Thailand 10500 Telephone: (66‐2) 695‐5000 Fax: (66‐2) 695‐5173 KT ZMICO Connect 662 695 5555
Central World Branch
Amarin Branch
22nd Floor, Amarin Building, 496‐502 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 018‐6200 Fax: (66‐2) 018‐6298, (66‐2) 018‐6299
8th Floor, Ton Son Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 626‐6000 Fax: (66‐2) 626‐6111
Phaholyothin Branch
Sindhorn Branch
Viphavadee Branch
2nd Floor, Sindhorn Tower 1, 130‐132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone: (66‐2) 627‐3550 Fax: (66‐2) 627‐3582, 627‐3600
G Floor, Lao Peng Nguan 1 Bldg., 333 Soi Cheypuand, Viphavadee‐Rangsit Road, Ladyao, Jatujak, Bangkok 10900 Telephone: (66‐2) 013‐8600 Fax: (66‐2) 618‐8569
BangKhae Branch
Chiang Mai Branch
Pak Chong Branch
999/9 The Offices at Central World, 16th Fl., Rama 1 Rd, Pathumwan, Bangkok 10330 Telephone: (66‐2) 264‐5888 Fax: (66‐2) 264 5899
1291/1, Shinnawatra Tower II, 3rd Floor, Phaholyothin Road, Phayathai, Bangkok 10400 Telephone: (66‐2) 686‐1500 Fax: (66‐2) 686‐1666
Ploenchit Branch
518 The Mall Group Building Bangkhae Branch, 6th Floor, Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Telephone: (66‐2) 454‐9979 Fax: (66‐2) 454‐9970
422/49 Changklan Road, Changklan Subdistrict, Amphoe Meuang, Chiang Mai 50100 Telephone: (053) 270‐072 Fax: (053) 272‐618
173 175, Mittapap Road, Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Telephone: (044) 279‐511 Fax: (044) 279‐574
Korat Branch
Khon Kaen Branch
Chonburi Branch
624/9 Changphuek Road, T.Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171
5th Floor, Charoen Thani Princess Hotel, 260 Srichan Road, T. Naimuang, A. Muang, Khon Kaen 40000 Telephone: (043) 389‐171‐193 Fax: (043) 389‐209
4th Floor, Forum Plaza Bldg., 870/52 Sukhumvit Road, T. Bangplasoy, A. Muang, Cholburi 20000 Telephone: (038) 287‐635 Fax: (038) 287‐637
Pattaya Branch
Chachoengsao Branch
Hat Yai Branch
Easy Point 2, 392/65 Moo.9, T.Nong Prue, A. Bang Lamung, Chonburi 20260 Telephone: (038) 420‐965 Fax: (038) 420‐968
108/34‐36 Mahajakkrapad Road, T.Namuang, A.Muang, Chachoengsao 24000 Telephone: (038) 813‐088 Fax: (038) 813‐099
200/301, 200/303 JULDIS HATYAI PLAZA Floor 3 , Niphat‐Uthit 3 Rd, Hatyai Songkhla 90110 Telephone: (074) 355530‐3 Fax: (074) 355534
Phuket Branch
22/61‐63, Luang Por Wat Chalong Road, Talat Yai, Mueang Phuket, Phuket 83000 Telephone: (076) 222‐811, (076) 222‐683 Fax: (076) 222‐861
Phitsanulok Branch
227/171 Borom Trilokkanat Road, Muang, Phitsanulok 65000 Telephone: 055‐219‐255 to 8 Fax: 055‐219‐259
Nakhon Pathom
Cyber Branch Ayutthaya
Cyber Branch @ North Nana
Cyber Branch Chiangrai
KrungThai Bank, Rojana Branch 253 Moo 5, Rojana Road, Phai Ling, Phra Nakhon Si Ayutthaya, Phra Nakhonsi Ayutthaya, 13000 Telephone: 035‐242‐477 Fax: 035‐242‐476
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd., Klong Toey Nua Subdistrict , Wattana District , Bangkok 10110 Telephone: 083‐490‐2871
River Hotel (Building 3rd),1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
KrungThai Bank, Hayaek Phokhun Mengrai Branch 116/19 Moo 19, Highway 110 Road, Rop Wiang, Mueang Chiang Rai, Chiang Rai, 57000 Telephone: 053‐715‐067 Fax: 053‐715‐068
