Buy (17E TP Bt10.70)
RS
Buy (17E TP Bt10.70)
Company Update
Close Bt9.30
Media & Publishing March 2, 2017
Earnings upgrade/Earnings downgrade/Overview unchanged A good start for the year Price Performance (%)
Ad rate on CH8 already hiked 30% RS has already adjusted the ad rate of CH8 up 30% to Bt30,000/min and expects the utilization rate at 70%. The revenue target is Bt1,945mn, +85%YoY. However, we forecast CH8’s revenue in 17E at Bt1,445mn based on a utilization rate of 55%, increasing 10% from last year. We expect revenue from CH2 and Sabuydee TV to drop by 10% due to the weak outlook for sat/cab TV. TV’s gross margin will recover from ‐6% to 21%.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.134
0.271
KT ZMICO vs. consensus Share data
11.9%
40.2%
Reuters / Bloomberg
RS.BK/RS TB
Paid‐up Shares (m)
1,009.94
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
9.00/268.00
Foreign limit / actual (%)
49.00/3.73
52 week High / Low (Bt)
12.80/5.95
Avg. daily T/O (shares 000) NVDR (%)
4,453.00 4.74
Estimated free float (%)
46.59
Beta
1.20
URL
www.rs.co.th
CGR
Anti‐corruption
n.a.
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6289
Staying competitive in the TV business The TV rating of CH8 has recovered from its bottom at 0.373 in Apr‐16 to 0.509 in Feb‐17. CH8’s key content remains news programs and boxing while its weak area is variety shows. We think the channel will continue to focus on its key programs since it is still too costly for RS to compete with variety shows. The length of the morning news program (rating 0.90) is three hours per day, so lifting up the rating for this program is much more efficient. For drama series, RS has revamped its production process and produced new dramas that will capture the Bangkok and urban audience. The new lot will be airing in March and management believes that it will be able to compete with CH7, CH3, and One. The management targets the channel’s rating at 0.800 by yearend. We view that such a goal might be too challenging but CH8 will remain very competitive with strong news and boxing programs.
Brighter outlook for H&B Sales of H&B had a very good start for the year. Sales in Jan and Feb broke records at Bt65mn and Bt67mn. In 4Q16, RS increased its call center staff from 45 to 100, which allowed it to capture 95% of incoming calls (from previously only 50%). Telesales’ volume jumped by 100% in Dec and continued to rise in Jan and Feb. Sales in the first two months mean that total sales in 17E could potentially go up to Bt720mn, +300%YoY. However, we cautiously forecast H&B revenue at only Bt403mn and will wait to see the development of this business. The gross margin is assumed at 75%, which is its normal level. Upgrade to Buy We revise up net profit in 17E – 19E by 3% ‐ 6%, mainly from the higher revenue forecast of H&B. The bottom line should recover from a loss of Bt102mn last year to profit of Bt144mn in 17E and Bt369mn in 18E, which implies PER at 62x and 24x. Our 17E TP increases to Bt10.70. Recommend Buy. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt)
2014 4,306 341 0.38 ‐13.6% 0.30 1.70
2015 3,729 122 0.12 ‐68.0% 0.10 1.78
2016 3,125 (102) (0.10) ‐186.3% 0.00 1.09
2017E 2,976 144 0.15 ‐242.9% 0.00 1.23
2018E 3,361 369 0.38 156.4% 0.15 1.62
FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 23.74 5.08 5.28 3.4% 21.7% ‐21%
2015 74.09 11.17 5.04 1.1% 7.2% ‐43%
2016 ‐85.81 26.89 8.24 0.0% ‐7.4% 102%
2017E 62.41 10.57 7.53 0.0% 12.8% 92%
2018E 24.34 7.81 5.75 1.6% 26.8% 56%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: CH8’s rating
Figure 2: TV revenue breakdown
1.2
(Bt'mn)
1.0
3,000
0.8
2,500
0.6
2,000 1,500
0.4
1,000
0.2
500
WORK
MONO
One
Feb17
Dec16
Oct16
Aug16
Jun16
Apr16
Feb16
Dec15
Oct15
Aug15
Jun15
Apr15
Feb15
Dec14
0.0
1,908 440
2,169
2,052 455
1,809
399
401
324
659
359
766
938
1,049
2014
2015
2016
702
RS
Ch8
Satellite TV
Figure 4: H&B revenue
37%
36%
36% 30%
30%
30% 9%
10% 0%
33%
1,908
2018E
2019E
Radio
644 569
600
493 403
400
12%
1,734
(Bt'mn) 700
500
21%
17%
20%
29%
39%
300
294
2017E
Figure 3: Media and TV gross margin 40%
443
0
Source: AGB Nielsen, KT Zmico Research
50%
2,650
434
1,445
Source: AGB Nielsen, KT Zmico Research
47%
2,462
300
232
228
2015
2016
200
‐6%
100
-10% 2013
2014
2015
2016
2017E
Media (TV+radio)
2018E
2019E
0
TV
Source: AGB Nielsen, KT Zmico Research
2017E
2018E
2019E
2020E
Source: AGB Nielsen, KT Zmico Research
Figure 5: Earnings revision
2017
2018
2019
Year‐end 31 Dec
Previous
New
%chg
Previous
New
%chg
Previous
New
%chg
Revenue (Bt'mn)
2,811
2,976
6%
3,150
3,361
7%
3,406
3,625
6%
743
804
8%
1,077
1,089
1%
1,173
1,275
9%
0
0
n.a.
0
0
n.a.
0
0
n.a.
EBITDA (Bt'mn) Share of profit (Bt'mn) Core profit (Bt'mn) % growth Core EPS (Bt) Core EPS growth (%) Gross margin (%) EBITDA margin (%)
139
144
4%
349
369
6%
500
517
3%
‐236%
‐241%
‐5%
151%
156%
5%
43%
40%
‐3%
139
144
4%
349
369
6%
500
517
3%
‐236%
‐241%
‐5%
151%
156%
5%
43%
40%
‐3%
0.14
0.15
6%
0.36
0.38
6%
0.52
0.53
4%
‐234%
‐243%
‐9%
157%
156%
‐1%
43%
40%
‐3%
Sources: BEC, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Extra Items Non‐controlling Net profit Reported EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories Investment PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Non‐cash adjustment Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 3,461 (2,109) 1,352 (873) 758 (278) 479 (17) 14 476 (84) 0 2 394 0.44 394 0.44 0.35
2014 4,306 (2,941) 1,365 (835) 1,608 (1,078) 530 (78) 23 475 (107) 0 (27) 341 0.38 341 0.38 0.30
2013 572 1,068 39 5 1,055 210 2,950 292 13 1,364 1,026 1,585 2,950
2014 382 1,101 107 5 2,698 289 4,582 8 5 2,838 1,026 1,743 4,582
2013 392 7 278 294 971 (473) 0 (473) (125) 148 (272) 8 (240) 259 499 0.52
2018E 363 696 109 4 2,489 548 4,210 912 325 2,637 1,010 1,573 4,210
2017E 144 0 540 (265) 419 (440) 0 (440) 44 0 0 0 44 23 (21) (0.02)
2016 ‐16.2% ‐50.4% ‐236.5% 25.4% 11.0% ‐4.0% ‐3.3% ‐5.1% 13.2%
2018E 3,361 (1,963) 1,398 (860) 1,089 (551) 538 (106) 30 462 (92) 0 0 369 0.38 369 0.38 0.15
2017E 127 617 105 4 2,591 529 3,972 762 469 2,769 1,010 1,203 3,972
2016 (102) 43 468 (1,029) (620) (611) 11 (599) 1,131 0 (100) (465) 565 (653) (1,219) (1.26)
2015 ‐13.4% ‐54.5% ‐58.7% 27.4% 19.6% 4.9% 3.3% 4.2% ‐8.0%
2017E 2,976 (1,884) 1,092 (828) 804 (540) 264 (114) 30 180 (36) 0 0 144 0.15 144 0.15 0.00
2016 104 648 130 4 2,691 563 4,139 718 469 3,080 1,010 1,060 4,139
2015 132 42 547 470 1,191 (666) 9 (657) (10) 0 (181) 33 (158) 376 534 0.53
2014 24.4% 112.3% ‐13.6% 31.7% 37.3% 12.3% 7.9% 7.9% 22.6%
2016 3,125 (2,331) 794 (918) 344 (468) (124) (83) 25 (183) 24 57 0 (102) (0.10) (159) (0.16) 0.00
2015 757 876 163 5 2,510 533 4,844 6 7 3,117 1,014 1,727 4,844
2014 368 0 1,078 (93) 1,354 (1,033) 0 (1,032) (293) 100 (311) (8) (512) (191) 321 0.33
2013 23.1% 70.1% 34.0% 39.1% 21.9% 13.9% 11.4% 11.4% 17.6%
2015 3,729 (2,707) 1,022 (837) 731 (547) 184 (81) 51 155 12 (35) (10) 122 0.12 157 0.16 0.10
2018E 369 0 551 (241) 679 (449) 0 (449) 6 0 0 0 6 236 230 0.24
2017E ‐4.8% 133.7% ‐192.0% 36.7% 27.0% 8.9% 4.8% 4.8% 20.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2018E 12.9% 35.4% 156.4% 41.6% 32.4% 16.0% 11.0% 11.0% 20.0%
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.
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)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator 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
Buy (17E TP Bt10.70)
Company Update
Close Bt9.30
Media & Publishing March 2, 2017
Earnings upgrade/Earnings downgrade/Overview unchanged A good start for the year Price Performance (%)
Ad rate on CH8 already hiked 30% RS has already adjusted the ad rate of CH8 up 30% to Bt30,000/min and expects the utilization rate at 70%. The revenue target is Bt1,945mn, +85%YoY. However, we forecast CH8’s revenue in 17E at Bt1,445mn based on a utilization rate of 55%, increasing 10% from last year. We expect revenue from CH2 and Sabuydee TV to drop by 10% due to the weak outlook for sat/cab TV. TV’s gross margin will recover from ‐6% to 21%.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.134
0.271
KT ZMICO vs. consensus Share data
11.9%
40.2%
Reuters / Bloomberg
RS.BK/RS TB
Paid‐up Shares (m)
1,009.94
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
9.00/268.00
Foreign limit / actual (%)
49.00/3.73
52 week High / Low (Bt)
12.80/5.95
Avg. daily T/O (shares 000) NVDR (%)
4,453.00 4.74
Estimated free float (%)
46.59
Beta
1.20
URL
www.rs.co.th
CGR
Anti‐corruption
n.a.
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6289
Staying competitive in the TV business The TV rating of CH8 has recovered from its bottom at 0.373 in Apr‐16 to 0.509 in Feb‐17. CH8’s key content remains news programs and boxing while its weak area is variety shows. We think the channel will continue to focus on its key programs since it is still too costly for RS to compete with variety shows. The length of the morning news program (rating 0.90) is three hours per day, so lifting up the rating for this program is much more efficient. For drama series, RS has revamped its production process and produced new dramas that will capture the Bangkok and urban audience. The new lot will be airing in March and management believes that it will be able to compete with CH7, CH3, and One. The management targets the channel’s rating at 0.800 by yearend. We view that such a goal might be too challenging but CH8 will remain very competitive with strong news and boxing programs.
Brighter outlook for H&B Sales of H&B had a very good start for the year. Sales in Jan and Feb broke records at Bt65mn and Bt67mn. In 4Q16, RS increased its call center staff from 45 to 100, which allowed it to capture 95% of incoming calls (from previously only 50%). Telesales’ volume jumped by 100% in Dec and continued to rise in Jan and Feb. Sales in the first two months mean that total sales in 17E could potentially go up to Bt720mn, +300%YoY. However, we cautiously forecast H&B revenue at only Bt403mn and will wait to see the development of this business. The gross margin is assumed at 75%, which is its normal level. Upgrade to Buy We revise up net profit in 17E – 19E by 3% ‐ 6%, mainly from the higher revenue forecast of H&B. The bottom line should recover from a loss of Bt102mn last year to profit of Bt144mn in 17E and Bt369mn in 18E, which implies PER at 62x and 24x. Our 17E TP increases to Bt10.70. Recommend Buy. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt)
2014 4,306 341 0.38 ‐13.6% 0.30 1.70
2015 3,729 122 0.12 ‐68.0% 0.10 1.78
2016 3,125 (102) (0.10) ‐186.3% 0.00 1.09
2017E 2,976 144 0.15 ‐242.9% 0.00 1.23
2018E 3,361 369 0.38 156.4% 0.15 1.62
FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2014 23.74 5.08 5.28 3.4% 21.7% ‐21%
2015 74.09 11.17 5.04 1.1% 7.2% ‐43%
2016 ‐85.81 26.89 8.24 0.0% ‐7.4% 102%
2017E 62.41 10.57 7.53 0.0% 12.8% 92%
2018E 24.34 7.81 5.75 1.6% 26.8% 56%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: CH8’s rating
Figure 2: TV revenue breakdown
1.2
(Bt'mn)
1.0
3,000
0.8
2,500
0.6
2,000 1,500
0.4
1,000
0.2
500
WORK
MONO
One
Feb17
Dec16
Oct16
Aug16
Jun16
Apr16
Feb16
Dec15
Oct15
Aug15
Jun15
Apr15
Feb15
Dec14
0.0
1,908 440
2,169
2,052 455
1,809
399
401
324
659
359
766
938
1,049
2014
2015
2016
702
RS
Ch8
Satellite TV
Figure 4: H&B revenue
37%
36%
36% 30%
30%
30% 9%
10% 0%
33%
1,908
2018E
2019E
Radio
644 569
600
493 403
400
12%
1,734
(Bt'mn) 700
500
21%
17%
20%
29%
39%
300
294
2017E
Figure 3: Media and TV gross margin 40%
443
0
Source: AGB Nielsen, KT Zmico Research
50%
2,650
434
1,445
Source: AGB Nielsen, KT Zmico Research
47%
2,462
300
232
228
2015
2016
200
‐6%
100
-10% 2013
2014
2015
2016
2017E
Media (TV+radio)
2018E
2019E
0
TV
Source: AGB Nielsen, KT Zmico Research
2017E
2018E
2019E
2020E
Source: AGB Nielsen, KT Zmico Research
Figure 5: Earnings revision
2017
2018
2019
Year‐end 31 Dec
Previous
New
%chg
Previous
New
%chg
Previous
New
%chg
Revenue (Bt'mn)
2,811
2,976
6%
3,150
3,361
7%
3,406
3,625
6%
743
804
8%
1,077
1,089
1%
1,173
1,275
9%
0
0
n.a.
0
0
n.a.
0
0
n.a.
EBITDA (Bt'mn) Share of profit (Bt'mn) Core profit (Bt'mn) % growth Core EPS (Bt) Core EPS growth (%) Gross margin (%) EBITDA margin (%)
139
144
4%
349
369
6%
500
517
3%
‐236%
‐241%
‐5%
151%
156%
5%
43%
40%
‐3%
139
144
4%
349
369
6%
500
517
3%
‐236%
‐241%
‐5%
151%
156%
5%
43%
40%
‐3%
0.14
0.15
6%
0.36
0.38
6%
0.52
0.53
4%
‐234%
‐243%
‐9%
157%
156%
‐1%
43%
40%
‐3%
Sources: BEC, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Extra Items Non‐controlling Net profit Reported EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories Investment PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Non‐cash adjustment Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 3,461 (2,109) 1,352 (873) 758 (278) 479 (17) 14 476 (84) 0 2 394 0.44 394 0.44 0.35
2014 4,306 (2,941) 1,365 (835) 1,608 (1,078) 530 (78) 23 475 (107) 0 (27) 341 0.38 341 0.38 0.30
2013 572 1,068 39 5 1,055 210 2,950 292 13 1,364 1,026 1,585 2,950
2014 382 1,101 107 5 2,698 289 4,582 8 5 2,838 1,026 1,743 4,582
2013 392 7 278 294 971 (473) 0 (473) (125) 148 (272) 8 (240) 259 499 0.52
2018E 363 696 109 4 2,489 548 4,210 912 325 2,637 1,010 1,573 4,210
2017E 144 0 540 (265) 419 (440) 0 (440) 44 0 0 0 44 23 (21) (0.02)
2016 ‐16.2% ‐50.4% ‐236.5% 25.4% 11.0% ‐4.0% ‐3.3% ‐5.1% 13.2%
2018E 3,361 (1,963) 1,398 (860) 1,089 (551) 538 (106) 30 462 (92) 0 0 369 0.38 369 0.38 0.15
2017E 127 617 105 4 2,591 529 3,972 762 469 2,769 1,010 1,203 3,972
2016 (102) 43 468 (1,029) (620) (611) 11 (599) 1,131 0 (100) (465) 565 (653) (1,219) (1.26)
2015 ‐13.4% ‐54.5% ‐58.7% 27.4% 19.6% 4.9% 3.3% 4.2% ‐8.0%
2017E 2,976 (1,884) 1,092 (828) 804 (540) 264 (114) 30 180 (36) 0 0 144 0.15 144 0.15 0.00
2016 104 648 130 4 2,691 563 4,139 718 469 3,080 1,010 1,060 4,139
2015 132 42 547 470 1,191 (666) 9 (657) (10) 0 (181) 33 (158) 376 534 0.53
2014 24.4% 112.3% ‐13.6% 31.7% 37.3% 12.3% 7.9% 7.9% 22.6%
2016 3,125 (2,331) 794 (918) 344 (468) (124) (83) 25 (183) 24 57 0 (102) (0.10) (159) (0.16) 0.00
2015 757 876 163 5 2,510 533 4,844 6 7 3,117 1,014 1,727 4,844
2014 368 0 1,078 (93) 1,354 (1,033) 0 (1,032) (293) 100 (311) (8) (512) (191) 321 0.33
2013 23.1% 70.1% 34.0% 39.1% 21.9% 13.9% 11.4% 11.4% 17.6%
2015 3,729 (2,707) 1,022 (837) 731 (547) 184 (81) 51 155 12 (35) (10) 122 0.12 157 0.16 0.10
2018E 369 0 551 (241) 679 (449) 0 (449) 6 0 0 0 6 236 230 0.24
2017E ‐4.8% 133.7% ‐192.0% 36.7% 27.0% 8.9% 4.8% 4.8% 20.0%
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2018E 12.9% 35.4% 156.4% 41.6% 32.4% 16.0% 11.0% 11.0% 20.0%
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.
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)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator 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
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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
