VGI Global Media
VGI Global Media Underperform (FY18E TP Bt5.10)
Earnings Review
Close Bt5.40
Media & Publishing February 2, 2017
Beat forecast/Below forecast/In line
Earnings fell, but within expectation Maintain “Underperform”; waiting to see benefit from new investments VGI reported weak results in 3QFY17 owing mainly to the impact from the mourning period, in line with our expectation for the whole year. We believe earnings should improve starting from 4QFY17 onwards. Although we believe net profit will achieve +29% CAGR in FY18‐19E owing to extensive new business expansion and the impact of a low base, FY18E PER of 40x likely factors in the positives, in our view. We maintain our “Underperform” rating for VGI with the SOTP‐based target price of Bt5.10, while waiting to see the beneficial impact of new investments on earnings.
Results date: February 1, 2017 Price Performance (%)
Net profit fell in 3QFY17 due in part to the mourning period VGI reported net profit of Bt124mn in 3QFY17 (Oct‐Dec 16), falling by 47% YoY and 37% QoQ. On a yearly basis, revenue increased by 29% YoY owing to realization of MACO’s revenue (started consolidation in Jun‐16). However, revenue from BTS‐related media and office media fell by 3% YoY and 19% YoY, respectively, owing to the ceasing of advertising content in digital media for 30 days (from 13 October) for the mourning period and partly due to the weak economy. Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.123
0.165
KT ZMICO vs. consensus Share data
‐4.1%
‐20%
Reuters / Bloomberg
VGI.BK/VGI TB
Paid‐up Shares (m)
6,864.33
Par (Bt)
0.10
Market cap (Bt bn / US$ m) Foreign limit / actual (%)
37.00/1,056.00 49.00/8.72
52 week High / Low (Bt)
6.95/3.80
Avg. daily T/O (shares 000)
14,757.00
NVDR (%)
2.46
Estimated free float (%)
25.11
Beta
1.26
URL
www.vgi.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Raenoo Bhandasukdi Analyst no. 17989 [email protected] 66 (0) 2695‐5836
Profitability squeezed In 3QFY17, VGI’s gross profit margin dropped to 59%, vs. 66% in 3QFY16 and 62% in 2QFY17, owing to consolidating with MACO (lower margin) and falling revenue. Meanwhile, SG&A expenses significantly increased (+182% YoY and +26% QoQ to Bt236mn) owing to both the consolidation with MACO and higher expenses related to M&A deals. These reasons caused the net margin to decline to 19%, vs. 43% in 3QFY16 and 28% in 2QFY17. Bt0.035 interim dividend announcement VGI announced an interim DPS of Bt0.035 for 1HFY17, implying a 47% dividend payment ratio, below our 75% dividend payment ratio for the whole year. This implies a 1.2% dividend yield (annualized). Maintain earnings projection For 9MFY17, VGI delivered normalized profit of Bt500mn, 74% of our full‐ year normalized profit projection. We thus maintain our normalized profit estimate for the whole year, as we believe earnings will improve in the final quarter of the year. Financials and Valuation FY Ended 31 Mar Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm. profit (Btmn) Norm. EPS (Bt) Norm. EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Mar PER (x) EV/EBITDA (x) P/BV (x) Dividend yield (%) ROE (%) Net gearing (%)
FY15 2,963 838 0.122 999 0.146 (56.38) 0.176 0.266 FY15 37.09 12.06 20.26 3.26 44.29 18.75
FY16 2,106 941 0.137 852 0.124 (14.73) 0.110 0.327 FY16 43.49 14.28 16.53 2.04 46.20 5.70
FY17E 2,367 808 0.118 673 0.098 (21.05) 0.088 0.351 FY17E 55.09 14.97 15.40 1.63 34.76 cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 3
FY18E 3,852 907 0.132 907 0.132 34.86 0.119 0.377 FY18E 40.85 12.12 14.32 2.20 36.32 73.94
FY19E 4,565 1,119 0.163 1,119 0.163 23.34 0.147 0.410 FY19E 33.12 10.09 13.18 2.72 41.44 62.23
Figure 1: Summary of SOTP‐based valuation for VGI Business
% Holding
VGI
Valuation Method
Value to VGI (Bt)
DCF (WACC 8%)
4.91
MACO
33.88
DCF (WACC 9%)
0.21
SBK Line
30.00
DCF (WACC 10%)
0.01
5.13
SOTP‐based Source: KT ZMICO Research
Figure 2: VGI’s PER band and sensitivity of market prices based on PER at different standard deviation levels FY17E +1.0SD +0.5SD Average ‐0.5SD ‐1.0SD ‐1.5SD ‐2.0SD ‐2.5SD
(X) 70 +2 S.D.
60
+1 S.D.
50 Avg. 40 30 20
-1 S.D. -2 S.D.
0
Oct-12 Nov-12 Jan-13 Feb-13 Apr-13 May-13 Jul-13 Aug-13 Oct-13 Nov-13 Jan-14 Feb-14 Apr-14 May-14 Jul-14 Aug-14 Oct-14 Dec-14 Jan-15 Mar-15 Apr-15 Jun-15 Jul-15 Sep-15 Oct-15 Dec-15 Jan-16 Mar-16 Apr-16 Jun-16 Jul-16 Sep-16 Oct-16 Dec-16 Jan-17
10
PER (x) 48.6 44.5 40.5 36.4 32.4 28.3 24.2 20.2
Implied market price (Bt) 6.41 5.88 5.34 4.81 4.27 3.74 3.20 2.66
Upside/Downside vs. current market price (%) 18.8 8.9 (1.1) (11.0) (20.9) (30.8) (40.7) (50.7)
Source: Bloomberg, KT ZMICO Research
Figure 3: VGI’s 3QFY17 (Oct‐Dec 16) earnings review Profit and Loss (Btmn) Year‐end 31 Mar Revenue Gross profit SG&A EBITDA Interest expense Other income Income tax Other extra items Gn (Ls) from affiliates Net profit (loss) Normalized profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt/equity (x) BVPS (Bt) ROE (%) Revenue structure BTS‐related Office building & others MACO
3QFY16 520 341 (84) 302 (2) 12 (53) 9 11 232 223 0.034
2QFY17 712 438 (187) 306 (4) 11 (52) ‐ 2 198 198 0.029
3QFY17 672 398 (236) 223 (8) 11 (47) ‐ (1) 124 124 0.018
% YoY 29.4 16.9 181.9 (26.2) 233.9 (1.2) (12.1) (100.0) (112.8) (46.5) (44.4) (46.5)
% QoQ (5.5) (9.2) 25.9 (27.2) 95.2 5.6 (8.8) ‐ (183.7) (37.2) (37.2) (37.2)
9MFY17 1,935 1,175 (529) 809 (14) 29 (157) 135 4 636 500 0.093
% YoY 20.5 15.6 91.4 (6.1) 44.2 (14.0) 5.8 43.5 (80.9) (13.0) (21.4) (13.0)
65.5 58.1 43.0 1.1 112.7 0.1 0.3 39.3
61.6 45.8 27.8 1.1 64.4 0.4 0.3 32.3 481 78 153
59.2 33.1 18.5 0.9 21.3 0.4 0.4 20.2
60.7 41.8 25.9 0.9 47.7 0.4 0.4 26.9
438 54 180
(3.3) (19.4) n.a.
(8.9) (30.8) 17.6
453 67 0
FY17E 2,367 1,462 (569) 1,074 (11) 37 (195) 135 12 808 673 0.118
YTD (% of 17E) 81.7 80.4 93.0 75.3 126.5 78.7 80.2 100.0 32.5 78.7 74.4 78.7
61.8 45.4 34.1 1.1 83.4 0.1 0.4 28.9
Source: VGI, 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, CRANE, TFD. KT ZMICO is a co underwriter of RPH.
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 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
Earnings Review
Close Bt5.40
Media & Publishing February 2, 2017
Beat forecast/Below forecast/In line
Earnings fell, but within expectation Maintain “Underperform”; waiting to see benefit from new investments VGI reported weak results in 3QFY17 owing mainly to the impact from the mourning period, in line with our expectation for the whole year. We believe earnings should improve starting from 4QFY17 onwards. Although we believe net profit will achieve +29% CAGR in FY18‐19E owing to extensive new business expansion and the impact of a low base, FY18E PER of 40x likely factors in the positives, in our view. We maintain our “Underperform” rating for VGI with the SOTP‐based target price of Bt5.10, while waiting to see the beneficial impact of new investments on earnings.
Results date: February 1, 2017 Price Performance (%)
Net profit fell in 3QFY17 due in part to the mourning period VGI reported net profit of Bt124mn in 3QFY17 (Oct‐Dec 16), falling by 47% YoY and 37% QoQ. On a yearly basis, revenue increased by 29% YoY owing to realization of MACO’s revenue (started consolidation in Jun‐16). However, revenue from BTS‐related media and office media fell by 3% YoY and 19% YoY, respectively, owing to the ceasing of advertising content in digital media for 30 days (from 13 October) for the mourning period and partly due to the weak economy. Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.123
0.165
KT ZMICO vs. consensus Share data
‐4.1%
‐20%
Reuters / Bloomberg
VGI.BK/VGI TB
Paid‐up Shares (m)
6,864.33
Par (Bt)
0.10
Market cap (Bt bn / US$ m) Foreign limit / actual (%)
37.00/1,056.00 49.00/8.72
52 week High / Low (Bt)
6.95/3.80
Avg. daily T/O (shares 000)
14,757.00
NVDR (%)
2.46
Estimated free float (%)
25.11
Beta
1.26
URL
www.vgi.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Raenoo Bhandasukdi Analyst no. 17989 [email protected] 66 (0) 2695‐5836
Profitability squeezed In 3QFY17, VGI’s gross profit margin dropped to 59%, vs. 66% in 3QFY16 and 62% in 2QFY17, owing to consolidating with MACO (lower margin) and falling revenue. Meanwhile, SG&A expenses significantly increased (+182% YoY and +26% QoQ to Bt236mn) owing to both the consolidation with MACO and higher expenses related to M&A deals. These reasons caused the net margin to decline to 19%, vs. 43% in 3QFY16 and 28% in 2QFY17. Bt0.035 interim dividend announcement VGI announced an interim DPS of Bt0.035 for 1HFY17, implying a 47% dividend payment ratio, below our 75% dividend payment ratio for the whole year. This implies a 1.2% dividend yield (annualized). Maintain earnings projection For 9MFY17, VGI delivered normalized profit of Bt500mn, 74% of our full‐ year normalized profit projection. We thus maintain our normalized profit estimate for the whole year, as we believe earnings will improve in the final quarter of the year. Financials and Valuation FY Ended 31 Mar Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm. profit (Btmn) Norm. EPS (Bt) Norm. EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Mar PER (x) EV/EBITDA (x) P/BV (x) Dividend yield (%) ROE (%) Net gearing (%)
FY15 2,963 838 0.122 999 0.146 (56.38) 0.176 0.266 FY15 37.09 12.06 20.26 3.26 44.29 18.75
FY16 2,106 941 0.137 852 0.124 (14.73) 0.110 0.327 FY16 43.49 14.28 16.53 2.04 46.20 5.70
FY17E 2,367 808 0.118 673 0.098 (21.05) 0.088 0.351 FY17E 55.09 14.97 15.40 1.63 34.76 cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 3
FY18E 3,852 907 0.132 907 0.132 34.86 0.119 0.377 FY18E 40.85 12.12 14.32 2.20 36.32 73.94
FY19E 4,565 1,119 0.163 1,119 0.163 23.34 0.147 0.410 FY19E 33.12 10.09 13.18 2.72 41.44 62.23
Figure 1: Summary of SOTP‐based valuation for VGI Business
% Holding
VGI
Valuation Method
Value to VGI (Bt)
DCF (WACC 8%)
4.91
MACO
33.88
DCF (WACC 9%)
0.21
SBK Line
30.00
DCF (WACC 10%)
0.01
5.13
SOTP‐based Source: KT ZMICO Research
Figure 2: VGI’s PER band and sensitivity of market prices based on PER at different standard deviation levels FY17E +1.0SD +0.5SD Average ‐0.5SD ‐1.0SD ‐1.5SD ‐2.0SD ‐2.5SD
(X) 70 +2 S.D.
60
+1 S.D.
50 Avg. 40 30 20
-1 S.D. -2 S.D.
0
Oct-12 Nov-12 Jan-13 Feb-13 Apr-13 May-13 Jul-13 Aug-13 Oct-13 Nov-13 Jan-14 Feb-14 Apr-14 May-14 Jul-14 Aug-14 Oct-14 Dec-14 Jan-15 Mar-15 Apr-15 Jun-15 Jul-15 Sep-15 Oct-15 Dec-15 Jan-16 Mar-16 Apr-16 Jun-16 Jul-16 Sep-16 Oct-16 Dec-16 Jan-17
10
PER (x) 48.6 44.5 40.5 36.4 32.4 28.3 24.2 20.2
Implied market price (Bt) 6.41 5.88 5.34 4.81 4.27 3.74 3.20 2.66
Upside/Downside vs. current market price (%) 18.8 8.9 (1.1) (11.0) (20.9) (30.8) (40.7) (50.7)
Source: Bloomberg, KT ZMICO Research
Figure 3: VGI’s 3QFY17 (Oct‐Dec 16) earnings review Profit and Loss (Btmn) Year‐end 31 Mar Revenue Gross profit SG&A EBITDA Interest expense Other income Income tax Other extra items Gn (Ls) from affiliates Net profit (loss) Normalized profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt/equity (x) BVPS (Bt) ROE (%) Revenue structure BTS‐related Office building & others MACO
3QFY16 520 341 (84) 302 (2) 12 (53) 9 11 232 223 0.034
2QFY17 712 438 (187) 306 (4) 11 (52) ‐ 2 198 198 0.029
3QFY17 672 398 (236) 223 (8) 11 (47) ‐ (1) 124 124 0.018
% YoY 29.4 16.9 181.9 (26.2) 233.9 (1.2) (12.1) (100.0) (112.8) (46.5) (44.4) (46.5)
% QoQ (5.5) (9.2) 25.9 (27.2) 95.2 5.6 (8.8) ‐ (183.7) (37.2) (37.2) (37.2)
9MFY17 1,935 1,175 (529) 809 (14) 29 (157) 135 4 636 500 0.093
% YoY 20.5 15.6 91.4 (6.1) 44.2 (14.0) 5.8 43.5 (80.9) (13.0) (21.4) (13.0)
65.5 58.1 43.0 1.1 112.7 0.1 0.3 39.3
61.6 45.8 27.8 1.1 64.4 0.4 0.3 32.3 481 78 153
59.2 33.1 18.5 0.9 21.3 0.4 0.4 20.2
60.7 41.8 25.9 0.9 47.7 0.4 0.4 26.9
438 54 180
(3.3) (19.4) n.a.
(8.9) (30.8) 17.6
453 67 0
FY17E 2,367 1,462 (569) 1,074 (11) 37 (195) 135 12 808 673 0.118
YTD (% of 17E) 81.7 80.4 93.0 75.3 126.5 78.7 80.2 100.0 32.5 78.7 74.4 78.7
61.8 45.4 34.1 1.1 83.4 0.1 0.4 28.9
Source: VGI, 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, CRANE, TFD. KT ZMICO is a co underwriter of RPH.
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 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
