1Q17E earnings remains weak
Advanced Info Service Outperform (17E TP Bt178.00)
Company Update
Close Bt173.50
ICT
Earnings upgrade/Earnings downgrade/Overview unchanged
April 11, 2017
1Q17E earnings remains weak Price Performance (%)
OUTPERFORM rating maintained
Higher network investment will make ADVANC’s earning to decline YoY in 1Q17E. Its stronger position for both network capacity and digital content will help ADVANC to protect its revenue market share. Thus, our OUTPERFORM rating is maintained. The opportunity to acquire ToT’s 2300MHz will be near term catalyst.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
9.728
10.373
KT ZMICO vs. consensus Share data
‐4.5%
‐2.2%
Reuters / Bloomberg
Earnings to soft in 1Q17E We expect ADVANC to post a net profit of Bt6.6bn in 1Q17E, declining 18%YoY due to higher network cost and normalization of effective tax rate. Network cost would be uptick along with ongoing network rollout together with cost regarding with partnership deal with ToT on 2100MHz spectrum and 2G equipment rental. Its service revenue is expected to grow 5%YoY thanks to network quality improvement and fixed broadband base growth. Its strategy shift on handset subsidy to mainly focus on postpaid segment would scale down SG&A to sales 17%, down from abnormal high of 21% in 1Q17 given the uncertainties on 2G shut down. On QoQ basis, its NP would increase by 2% on lower SG&A expenses due to seasonality.
ADVA.BK/ADVANC TB
Paid‐up Shares (m)
2,973.10
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
516.00/14,896.00
Foreign limit / actual (%)
48.30/38.67
52 week High / Low (Bt)
187.50/141.00
Avg. daily T/O (shares 000)
8,212.00
NVDR (%)
4.62
Estimated free float (%)
36.22
Beta
1.04
URL
http://investor.ais.co.th
CGR Level 4 (Certified)
Anti‐corruption
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
Joining TOT’s 2300MHz partnership deal ADVANC currently has 55MHz bandwidth on par with peers, in our view, more spectrum is needed to strengthen its leading position over long run. ADVANC has submitted proposal for partnership deal with ToT’s 2300MHz spectrum. ToT is scheduled to announce winning bid and sign a deal within 3Q17. With its long‐term relationship with ToT, we view ADVANC has advantage over its peers. With TDD LTE standard and 8‐ years remaining license lifes, we see this spectrum would be less attractive for ADVANC given the upcoming spectrum auctions lining up. We reiterate our view that there is no any new spectrum acquisition by ADVANC within 2017. Earnings estimates maintained We expect ADVANC’s recent move to penetrating digital contents in partnership with leading global providers would help boost data usage and protect its revenue market share. Its 1H17E earnings remains under pressure on network cost acceleration, but will be relaxed in 2H17E, Thus, we keep 2017E‐2019E earnings forecast unchanged. 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 155,276 39,152 13.17 13.17 6.7% 12.99 16.31 2015 11.54 7.17 9.32 8.5% 82.1% 114.0%
2016 152,150 30,667 10.31 10.32 ‐21.6% 9.99 14.36 2016 14.25 8.34 10.23 6.8% 67.3% 205.4%
2017E 158,987 27,628 9.29 9.29 ‐9.9% 6.50 15.51 2017E 18.67 9.42 11.19 3.7% 62.2% 224.5%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 3
2018E 166,749 30,161 10.14 10.14 9.2% 7.10 18.85 2018E 17.10 8.72 9.21 4.1% 59.1% 199.8%
2019E 174,056 33,525 11.28 11.28 11.2% 7.89 22.63 2019E 15.39 8.34 7.67 4.5% 54.4% 233.7%
Figure 1: Earnings preview Profit and Loss Statement (Btmn) Fiscal Year‐Ended Dec. 1Q16 Service revenue ex IC 30,147 Sales 5,663 Revenue 37,252 Gross Profit 17,532 EBITDA 15,623 8,095 SG&A expenses Net profit (loss) 8,073 Core profit (loss) 8,921 Reported EPS (THB) 2.72 Gross margin (%) 47.1% EBITDA margin (%) 41.9% Net margin (%) 21.7% Current ratio (x) 0.50 Interest coverage (x) 12.70 Debt to equity (x) 4.19 BVPS (Bt) 12.54 ROE (%) 89.0%
2Q16 30,169 4,882 36,482 19,059 17,011 6,460 9,596 9,596 3.23 52.2% 46.6% 26.3% 0.63 15.09 4.77 15.77 90.1%
3Q16 30,627 5,064 37,096 16,327 15,256 7,260 6,529 6,529 2.20 44.0% 41.1% 17.6% 0.49 6.99 6.49 12.18 86.2%
4Q16 31,618 8,314 41,319 16,240 15,059 7,961 6,468 5,633 2.18 39.3% 36.4% 15.7% 0.46 6.29 5.45 14.36 77.7%
1Q17E 31,523 5,436 38,103 15,674 16,713 6,454 6,596 6,596 2.22 41.1% 43.9% 17.3% 0.50 6.91 4.28 12.28 71.6%
%QoQ ‐0.3% ‐34.6% ‐7.8% ‐3.5% 11.0% ‐18.9% 2.0% 17.1% 2.0% 1.8% 7.4% 1.7%
‐14.5%
%YoY 4.6% ‐4.0% 2.3% ‐10.6% 7.0% ‐20.3% ‐18.3% ‐26.1% ‐18.3% ‐5.9% 1.9% ‐4.4%
2017E 128,450 25,118 158,987 64,729 65,766 27,720 27,628 27,628 9.29 40.7% 41.4% 17.4% 0.33 9.92 5.15 ‐2.0% 15.51 62.2%
YTD %YoY (% of 2017E) 4.8% 25.7% 5.0% 22.7% 4.5% 25.0% ‐6.4% 22.7% 4.5% 26.6% ‐6.9% 21.7% ‐9.9% 21.5% ‐9.9% 21.5% ‐9.9% 21.5% ‐4.7% 0.0% ‐2.8%
7.9%
Source: Bloomberg and KT Zmico Research
EV/EBITDA (x) +3.0SD = 15.1x
+3.0SD =24.1x 14.0 +1.0SD =18.8x
12.0 +1.0SD = 10.3x
10.0 Avearge= 16.1x ‐1.0SD = 13.5x
8.0
Average = 8.0x
6.0
‐1.0SD = 5.6x
4.0 2.0 0.0 3‐Jan‐07 2‐Jun‐07 30‐Oct‐07 28‐Mar‐08 25‐Aug‐08 22‐Jan‐09 21‐Jun‐09 18‐Nov‐09 17‐Apr‐10 14‐Sep‐10 11‐Feb‐11 11‐Jul‐11 8‐Dec‐11 6‐May‐12 3‐Oct‐12 2‐Mar‐13 30‐Jul‐13 27‐Dec‐13 26‐May‐14 23‐Oct‐14 22‐Mar‐15 19‐Aug‐15 16‐Jan‐16 14‐Jun‐16 11‐Nov‐16 10‐Apr‐17
23‐Aug‐16
24‐Mar‐17
9‐Jun‐15
12‐Jan‐16
27‐Oct‐14
‐2.0SD = 10.8x 19‐Mar‐14
8‐Jan‐13
16.0
15‐Aug‐13
6‐Jun‐12
27‐Oct‐11
18‐Mar‐11
4‐Jan‐10
17‐Aug‐10
16‐Oct‐08
29‐May‐09
12‐Mar‐08
3‐Jan‐07
8‐Aug‐07
Figure 2: PER and EV/EBITDA band PER (x) 30.0 25.0 20.0 15.0 10.0 5.0 ‐
Source: Bloomberg and KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 3
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) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Anti‐corruption Progress Indicator
Satisfactory (scores: 60 – 69) 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 3 of 3
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
Company Update
Close Bt173.50
ICT
Earnings upgrade/Earnings downgrade/Overview unchanged
April 11, 2017
1Q17E earnings remains weak Price Performance (%)
OUTPERFORM rating maintained
Higher network investment will make ADVANC’s earning to decline YoY in 1Q17E. Its stronger position for both network capacity and digital content will help ADVANC to protect its revenue market share. Thus, our OUTPERFORM rating is maintained. The opportunity to acquire ToT’s 2300MHz will be near term catalyst.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
9.728
10.373
KT ZMICO vs. consensus Share data
‐4.5%
‐2.2%
Reuters / Bloomberg
Earnings to soft in 1Q17E We expect ADVANC to post a net profit of Bt6.6bn in 1Q17E, declining 18%YoY due to higher network cost and normalization of effective tax rate. Network cost would be uptick along with ongoing network rollout together with cost regarding with partnership deal with ToT on 2100MHz spectrum and 2G equipment rental. Its service revenue is expected to grow 5%YoY thanks to network quality improvement and fixed broadband base growth. Its strategy shift on handset subsidy to mainly focus on postpaid segment would scale down SG&A to sales 17%, down from abnormal high of 21% in 1Q17 given the uncertainties on 2G shut down. On QoQ basis, its NP would increase by 2% on lower SG&A expenses due to seasonality.
ADVA.BK/ADVANC TB
Paid‐up Shares (m)
2,973.10
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
516.00/14,896.00
Foreign limit / actual (%)
48.30/38.67
52 week High / Low (Bt)
187.50/141.00
Avg. daily T/O (shares 000)
8,212.00
NVDR (%)
4.62
Estimated free float (%)
36.22
Beta
1.04
URL
http://investor.ais.co.th
CGR Level 4 (Certified)
Anti‐corruption
Waraporn Wiboonkanarak Analyst, no. 2482 [email protected] 66 (0) 2624‐6273
Joining TOT’s 2300MHz partnership deal ADVANC currently has 55MHz bandwidth on par with peers, in our view, more spectrum is needed to strengthen its leading position over long run. ADVANC has submitted proposal for partnership deal with ToT’s 2300MHz spectrum. ToT is scheduled to announce winning bid and sign a deal within 3Q17. With its long‐term relationship with ToT, we view ADVANC has advantage over its peers. With TDD LTE standard and 8‐ years remaining license lifes, we see this spectrum would be less attractive for ADVANC given the upcoming spectrum auctions lining up. We reiterate our view that there is no any new spectrum acquisition by ADVANC within 2017. Earnings estimates maintained We expect ADVANC’s recent move to penetrating digital contents in partnership with leading global providers would help boost data usage and protect its revenue market share. Its 1H17E earnings remains under pressure on network cost acceleration, but will be relaxed in 2H17E, Thus, we keep 2017E‐2019E earnings forecast unchanged. 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 155,276 39,152 13.17 13.17 6.7% 12.99 16.31 2015 11.54 7.17 9.32 8.5% 82.1% 114.0%
2016 152,150 30,667 10.31 10.32 ‐21.6% 9.99 14.36 2016 14.25 8.34 10.23 6.8% 67.3% 205.4%
2017E 158,987 27,628 9.29 9.29 ‐9.9% 6.50 15.51 2017E 18.67 9.42 11.19 3.7% 62.2% 224.5%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 3
2018E 166,749 30,161 10.14 10.14 9.2% 7.10 18.85 2018E 17.10 8.72 9.21 4.1% 59.1% 199.8%
2019E 174,056 33,525 11.28 11.28 11.2% 7.89 22.63 2019E 15.39 8.34 7.67 4.5% 54.4% 233.7%
Figure 1: Earnings preview Profit and Loss Statement (Btmn) Fiscal Year‐Ended Dec. 1Q16 Service revenue ex IC 30,147 Sales 5,663 Revenue 37,252 Gross Profit 17,532 EBITDA 15,623 8,095 SG&A expenses Net profit (loss) 8,073 Core profit (loss) 8,921 Reported EPS (THB) 2.72 Gross margin (%) 47.1% EBITDA margin (%) 41.9% Net margin (%) 21.7% Current ratio (x) 0.50 Interest coverage (x) 12.70 Debt to equity (x) 4.19 BVPS (Bt) 12.54 ROE (%) 89.0%
2Q16 30,169 4,882 36,482 19,059 17,011 6,460 9,596 9,596 3.23 52.2% 46.6% 26.3% 0.63 15.09 4.77 15.77 90.1%
3Q16 30,627 5,064 37,096 16,327 15,256 7,260 6,529 6,529 2.20 44.0% 41.1% 17.6% 0.49 6.99 6.49 12.18 86.2%
4Q16 31,618 8,314 41,319 16,240 15,059 7,961 6,468 5,633 2.18 39.3% 36.4% 15.7% 0.46 6.29 5.45 14.36 77.7%
1Q17E 31,523 5,436 38,103 15,674 16,713 6,454 6,596 6,596 2.22 41.1% 43.9% 17.3% 0.50 6.91 4.28 12.28 71.6%
%QoQ ‐0.3% ‐34.6% ‐7.8% ‐3.5% 11.0% ‐18.9% 2.0% 17.1% 2.0% 1.8% 7.4% 1.7%
‐14.5%
%YoY 4.6% ‐4.0% 2.3% ‐10.6% 7.0% ‐20.3% ‐18.3% ‐26.1% ‐18.3% ‐5.9% 1.9% ‐4.4%
2017E 128,450 25,118 158,987 64,729 65,766 27,720 27,628 27,628 9.29 40.7% 41.4% 17.4% 0.33 9.92 5.15 ‐2.0% 15.51 62.2%
YTD %YoY (% of 2017E) 4.8% 25.7% 5.0% 22.7% 4.5% 25.0% ‐6.4% 22.7% 4.5% 26.6% ‐6.9% 21.7% ‐9.9% 21.5% ‐9.9% 21.5% ‐9.9% 21.5% ‐4.7% 0.0% ‐2.8%
7.9%
Source: Bloomberg and KT Zmico Research
EV/EBITDA (x) +3.0SD = 15.1x
+3.0SD =24.1x 14.0 +1.0SD =18.8x
12.0 +1.0SD = 10.3x
10.0 Avearge= 16.1x ‐1.0SD = 13.5x
8.0
Average = 8.0x
6.0
‐1.0SD = 5.6x
4.0 2.0 0.0 3‐Jan‐07 2‐Jun‐07 30‐Oct‐07 28‐Mar‐08 25‐Aug‐08 22‐Jan‐09 21‐Jun‐09 18‐Nov‐09 17‐Apr‐10 14‐Sep‐10 11‐Feb‐11 11‐Jul‐11 8‐Dec‐11 6‐May‐12 3‐Oct‐12 2‐Mar‐13 30‐Jul‐13 27‐Dec‐13 26‐May‐14 23‐Oct‐14 22‐Mar‐15 19‐Aug‐15 16‐Jan‐16 14‐Jun‐16 11‐Nov‐16 10‐Apr‐17
23‐Aug‐16
24‐Mar‐17
9‐Jun‐15
12‐Jan‐16
27‐Oct‐14
‐2.0SD = 10.8x 19‐Mar‐14
8‐Jan‐13
16.0
15‐Aug‐13
6‐Jun‐12
27‐Oct‐11
18‐Mar‐11
4‐Jan‐10
17‐Aug‐10
16‐Oct‐08
29‐May‐09
12‐Mar‐08
3‐Jan‐07
8‐Aug‐07
Figure 2: PER and EV/EBITDA band PER (x) 30.0 25.0 20.0 15.0 10.0 5.0 ‐
Source: Bloomberg and KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 3
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) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Anti‐corruption Progress Indicator
Satisfactory (scores: 60 – 69) 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 3 of 3
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
