Mono Technology Sell (17E TP Bt2.98) AWS
Mono Technology
Sell (17E TP Bt2.98)
Company Update
Close Bt3.50
Media & Publishing August 18, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
High expectations reflected in the stock price Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.026
0.060
KT ZMICO vs. consensus Share data
‐100%
‐33.3%
Reuters / Bloomberg
MONO.BK/MONO TB
Paid‐up Shares (m)
3,200.94
Par (Bt)
0.10
Market cap (Bt bn / US$ m)
11.00/323.00
Foreign limit / actual (%)
49.00/1.59
52 week High / Low (Bt)
3.98/1.84
Avg. daily T/O (shares 000) NVDR (%)
8,706.00 0.66
Estimated free float (%)
23.59
Beta
0.94
URL
www.mono.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6236
Turnaround is real but the stock is overpriced…downgrade to Sell We think the TV business is in an uptrend due to the increasing TV ratings of MONO29 and cheaper ad rates compared to other TV channels. However, amid the slowdown in the Adex environment, it will still not be easy for the channel to reach its full potential soon. We cut our ad rate assumptions slightly, which results in net profit being cut to Bt16mn from Bt82mn in the previous forecast. We roll over the TP to next year at Bt2.98/share. Downgrade to Sell. TV is good…but not good enough The ad rate of MONO29 is in an uptrend, thank to increasing TV ratings and cheap ad rates compared to other TV channels, which provide room for improvement. However, we were too optimistic about ad rate growth and used ad rate assumptions of Bt23,000/min in 3Q16 and Bt26,000/min in 4Q16. However, it seemingly will not be easy for the channel to hike the ad rate that quickly and management has said that the recent ad rate is around Bt21,000/min. We therefore revise down our ad rate assumptions for 3Q16 and 4Q16 to Bt21,500/min and Bt22,000/min, which results in a lower average ad rate for 16E, from Bt22,000/min to Bt20,500/min. Revenue from TV drops 6.5% to Bt1,213mn. Over the long term, we still see the TV business growing further as MONO29 continues to gain more audience share and there is still some room to increase ad rates to be more comparable with Ch7 and Ch3. We think that when the hard times are over, MONO29 will see significant improvement in its financials. Wait and see for MVAS business The management has come up with a new plan to bring MVAS revenue back to where it used to be at Bt100mn per month. MONO will use the online channel to gain more MONOMAX members. If successful, there will be upside from this business. However, we will wait to see the development and maintain our assumption at Bt70mn per month for now. 3Q16 to see net profit of Bt49mn In 3Q16, we assume an ad rate at Bt21,500/min and derive ad revenue at Bt356mn, +150%YoY and +8%QoQ. MVAS revenue is assumed at Bt70mn/month. We forecast the GPM at 35.5%, improving from last quarter, while SG&A should be well contained. This results in NP of Bt49mn. Roll over to next year’s TP at Bt2.98 There is potential in MONO29. Nevertheless, the market has overreacted to the good prospects. Following the lower ad rate assumptions, our net profit forecasts for 16E and 17E are 80% and 31% lower than the previous forecasts. Our 17E TP provides no upside, so we downgrade to Sell. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt)
2013 1,407 501 0.11 ‐31.9% 0.43 0.46
2014 1,526 (12) (0.00) ‐102.5% 0.16 0.95
2015 1,893 (487) (0.11) 3816.9% 0.00 0.78
2016E 2,350 16 0.00 ‐103.4% 0.00 0.82
2017E 2,616 173 0.04 946.0% 0.00 0.88
FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2013 31.99 22.87 7.67 11.6% 28.2% ‐73%
2014 ‐1,290 53.96 3.70 4.3% ‐0.4% ‐20%
2015 ‐32.94 57.00 4.48 0.0% ‐18.2% 28%
2016E 971.84 12.45 4.25 0.0% 0.7% 43%
2017E 92.91 9.98 3.99 0.0% 6.3% 55%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
Figure 1: MONO29’s rating
Source: AGB Nielsen, KT Zmico Research Figure 2: MVAS and ad revenue (Bt'mn) 400 350 300 250 200 150 100 50 0 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16
MVAS
Advertising revenue
Source: MONO, KT Zmico Research Figure 3: Contents breakdown
Figure 4: Revenue breakdown (Bt'mn) 3,500
News 25%
3,000 2,350
2,500 Movies 44%
Others 8%
2,000 1,500
1,893 1,407
1,526
1,000 500
920
1,042
2013
2014 TV
609
0 Series 23%
Source: MONO, KT Zmico Research
840 880
2015 MVAS
2,616 840
1,214
1,454
2016E Other
2017E
Source: MONO, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
2,912 840
1,745
2018E
Figure 5: MONO’s 3Q16 earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%)
3Q15 449 68 60 (13) 15 19 0 (96) (96) (0.03) (4.4) (9.1) (45.4)
2Q16 587 180 250 (35) 7 (2) (0) 13 13 0.00 19.8 30.7 (16.3)
3Q16E 631 224 291 (35) 5 (5) 0 49 49 0.02 30.7 42.6 2.2
% YoY 40.5 227.2 388.3 163.4 (67.6) (126.9) n.m. (150.8) (150.8) (150.0)
% QoQ 7.4 24.3 16.2 (0.5) (27.4) 187.7 n.m. 273.2 273.2 277.7
9M16E 1,709 501 692 (105) 18 (12) (0) (18) (18) (0.01) 25.7 37.2 (6.2)
% YoY 23.8 208.4 843.8 36.4 (52.8) (127) n.m. (95.4) (95.4) (92.0)
2016E 2,350 695 940 (143) 32 (4) 0 16 16 0.01 29.6 40.0 0.7
% YoY 24.1 189.3 358.0 7.2 (0.6) (108) n.m. (103) (103) (103)
YTD (% 2016E) 72.8 72.1 73.6 73.5 55.1 284.3 n.m. (111.0) (111.0) (202.1)
Source: MONO, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
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 Gain (loss) from affiliates Extra Items Non‐controlling Net profit Reported EPS Fully diluted 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 1,407 (582) 826 (373) 512 (59) 452 (3) 91 540 (39) 0 0 0 501 0.16 0.11 501 0.16 0.43
2014 1,526 (1,011) 515 (588) 217 (290) (73) (81) 77 (77) 64 0 0 0 (12) (0.00) (0.00) (12) (0.00) 0.16
2015 1,893 (1,653) 240 (680) 205 (645) (439) (133) 32 (540) 54 0 0 0 (487) (0.16) (0.11) (487) (0.16) 0.00
2016E 2,350 (1,654) 695 (564) 940 (809) 131 (143) 32 21 (4) 0 0 0 16 0.01 0.00 16 0.01 0.00
2013 2,277 416 7 0 582 105 3,386 17 15 293 140 3,093 3,386
2014 998 578 8 0 3,569 248 5,400 13 409 2,489 308 2,911 5,400
2015 195 554 10 0 4,154 365 5,278 146 734 2,854 310 2,424 5,278
2016E 354 688 10 0 4,346 374 5,772 0 1,500 3,135 493 2,637 5,772
2017E 2,616 (1,680) 936 (584) 1,173 (821) 352 (168) 32 216 (43) 0 0 0 173 0.05 0.04 173 0.05 0.00
2018E 2,912 (1,707) 1,204 (602) 1,435 (833) 602 (162) 32 472 (94) 0 0 0 378 0.12 0.08 378 0.12 0.00
2017E 442 766 10 0 4,493 380 6,091 0 2,000 3,282 493 2,809 6,091
2018E 768 852 10 0 4,616 387 6,633 0 2,500 3,446 493 3,187 6,633
2013 501 6 59 (131) 436 (357) 0 (357) (21) 2,720 (585) 0 2,115 2,194 79 0.02
2014 (12) 12 290 (118) 171 (1,659) 0 (1,659) 384 0 (174) 0 210 (1,279) (1,488) (0.32)
2013 ‐8.5% ‐25.4% ‐31.9% 58.7% 36.4% 32.1% 35.6% 35.6% 7.2%
2015 (524) 33 645 (259) (105) (1,139) 0 (1,138) 441 52 (0) (61) 432 (804) (1,244) (0.27)
2014 8.5% ‐57.6% ‐102.5% 33.8% 14.2% ‐4.8% ‐0.8% ‐0.8% 83.8%
2016E 16 0 809 (482) 343 (1,000) 0 (1,000) 620 197 0 0 817 160 (657) (0.14)
2015 24.0% ‐5.3% 3790.5% 12.7% 10.8% ‐23.2% ‐25.7% ‐25.7% 9.9%
2017E 173 0 821 (437) 556 (968) 0 (968) 500 0 0 0 500 88 (412) (0.09)
2016E 24.1% 358.0% ‐103.3% 29.6% 40.0% 5.6% 0.7% 0.7% 20.0%
2018E 378 0 833 (429) 782 (956) 0 (956) 500 0 0 0 500 325 (175) (0.04)
2017E 11.3% 24.7% 946.0% 35.8% 44.8% 13.4% 6.6% 6.6% 20.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
2018E 11.3% 22.4% 118.8% 41.4% 49.3% 20.7% 13.0% 13.0% 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, PACE, PLE, TPOLY, M‐CHAI, CI, EARTH. KT ZMICO is a co‐underwriter of ALT, EKH, RJH.
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)
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 5 of 5
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
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Fax. (66-2) 686-1666
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Fax. (66-2) 627-3582, 627-3600
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Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
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Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Sell (17E TP Bt2.98)
Company Update
Close Bt3.50
Media & Publishing August 18, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
High expectations reflected in the stock price Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.026
0.060
KT ZMICO vs. consensus Share data
‐100%
‐33.3%
Reuters / Bloomberg
MONO.BK/MONO TB
Paid‐up Shares (m)
3,200.94
Par (Bt)
0.10
Market cap (Bt bn / US$ m)
11.00/323.00
Foreign limit / actual (%)
49.00/1.59
52 week High / Low (Bt)
3.98/1.84
Avg. daily T/O (shares 000) NVDR (%)
8,706.00 0.66
Estimated free float (%)
23.59
Beta
0.94
URL
www.mono.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6236
Turnaround is real but the stock is overpriced…downgrade to Sell We think the TV business is in an uptrend due to the increasing TV ratings of MONO29 and cheaper ad rates compared to other TV channels. However, amid the slowdown in the Adex environment, it will still not be easy for the channel to reach its full potential soon. We cut our ad rate assumptions slightly, which results in net profit being cut to Bt16mn from Bt82mn in the previous forecast. We roll over the TP to next year at Bt2.98/share. Downgrade to Sell. TV is good…but not good enough The ad rate of MONO29 is in an uptrend, thank to increasing TV ratings and cheap ad rates compared to other TV channels, which provide room for improvement. However, we were too optimistic about ad rate growth and used ad rate assumptions of Bt23,000/min in 3Q16 and Bt26,000/min in 4Q16. However, it seemingly will not be easy for the channel to hike the ad rate that quickly and management has said that the recent ad rate is around Bt21,000/min. We therefore revise down our ad rate assumptions for 3Q16 and 4Q16 to Bt21,500/min and Bt22,000/min, which results in a lower average ad rate for 16E, from Bt22,000/min to Bt20,500/min. Revenue from TV drops 6.5% to Bt1,213mn. Over the long term, we still see the TV business growing further as MONO29 continues to gain more audience share and there is still some room to increase ad rates to be more comparable with Ch7 and Ch3. We think that when the hard times are over, MONO29 will see significant improvement in its financials. Wait and see for MVAS business The management has come up with a new plan to bring MVAS revenue back to where it used to be at Bt100mn per month. MONO will use the online channel to gain more MONOMAX members. If successful, there will be upside from this business. However, we will wait to see the development and maintain our assumption at Bt70mn per month for now. 3Q16 to see net profit of Bt49mn In 3Q16, we assume an ad rate at Bt21,500/min and derive ad revenue at Bt356mn, +150%YoY and +8%QoQ. MVAS revenue is assumed at Bt70mn/month. We forecast the GPM at 35.5%, improving from last quarter, while SG&A should be well contained. This results in NP of Bt49mn. Roll over to next year’s TP at Bt2.98 There is potential in MONO29. Nevertheless, the market has overreacted to the good prospects. Following the lower ad rate assumptions, our net profit forecasts for 16E and 17E are 80% and 31% lower than the previous forecasts. Our 17E TP provides no upside, so we downgrade to Sell. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt)
2013 1,407 501 0.11 ‐31.9% 0.43 0.46
2014 1,526 (12) (0.00) ‐102.5% 0.16 0.95
2015 1,893 (487) (0.11) 3816.9% 0.00 0.78
2016E 2,350 16 0.00 ‐103.4% 0.00 0.82
2017E 2,616 173 0.04 946.0% 0.00 0.88
FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2013 31.99 22.87 7.67 11.6% 28.2% ‐73%
2014 ‐1,290 53.96 3.70 4.3% ‐0.4% ‐20%
2015 ‐32.94 57.00 4.48 0.0% ‐18.2% 28%
2016E 971.84 12.45 4.25 0.0% 0.7% 43%
2017E 92.91 9.98 3.99 0.0% 6.3% 55%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 5
Figure 1: MONO29’s rating
Source: AGB Nielsen, KT Zmico Research Figure 2: MVAS and ad revenue (Bt'mn) 400 350 300 250 200 150 100 50 0 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16
MVAS
Advertising revenue
Source: MONO, KT Zmico Research Figure 3: Contents breakdown
Figure 4: Revenue breakdown (Bt'mn) 3,500
News 25%
3,000 2,350
2,500 Movies 44%
Others 8%
2,000 1,500
1,893 1,407
1,526
1,000 500
920
1,042
2013
2014 TV
609
0 Series 23%
Source: MONO, KT Zmico Research
840 880
2015 MVAS
2,616 840
1,214
1,454
2016E Other
2017E
Source: MONO, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 5
2,912 840
1,745
2018E
Figure 5: MONO’s 3Q16 earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%)
3Q15 449 68 60 (13) 15 19 0 (96) (96) (0.03) (4.4) (9.1) (45.4)
2Q16 587 180 250 (35) 7 (2) (0) 13 13 0.00 19.8 30.7 (16.3)
3Q16E 631 224 291 (35) 5 (5) 0 49 49 0.02 30.7 42.6 2.2
% YoY 40.5 227.2 388.3 163.4 (67.6) (126.9) n.m. (150.8) (150.8) (150.0)
% QoQ 7.4 24.3 16.2 (0.5) (27.4) 187.7 n.m. 273.2 273.2 277.7
9M16E 1,709 501 692 (105) 18 (12) (0) (18) (18) (0.01) 25.7 37.2 (6.2)
% YoY 23.8 208.4 843.8 36.4 (52.8) (127) n.m. (95.4) (95.4) (92.0)
2016E 2,350 695 940 (143) 32 (4) 0 16 16 0.01 29.6 40.0 0.7
% YoY 24.1 189.3 358.0 7.2 (0.6) (108) n.m. (103) (103) (103)
YTD (% 2016E) 72.8 72.1 73.6 73.5 55.1 284.3 n.m. (111.0) (111.0) (202.1)
Source: MONO, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 5
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 Gain (loss) from affiliates Extra Items Non‐controlling Net profit Reported EPS Fully diluted 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 1,407 (582) 826 (373) 512 (59) 452 (3) 91 540 (39) 0 0 0 501 0.16 0.11 501 0.16 0.43
2014 1,526 (1,011) 515 (588) 217 (290) (73) (81) 77 (77) 64 0 0 0 (12) (0.00) (0.00) (12) (0.00) 0.16
2015 1,893 (1,653) 240 (680) 205 (645) (439) (133) 32 (540) 54 0 0 0 (487) (0.16) (0.11) (487) (0.16) 0.00
2016E 2,350 (1,654) 695 (564) 940 (809) 131 (143) 32 21 (4) 0 0 0 16 0.01 0.00 16 0.01 0.00
2013 2,277 416 7 0 582 105 3,386 17 15 293 140 3,093 3,386
2014 998 578 8 0 3,569 248 5,400 13 409 2,489 308 2,911 5,400
2015 195 554 10 0 4,154 365 5,278 146 734 2,854 310 2,424 5,278
2016E 354 688 10 0 4,346 374 5,772 0 1,500 3,135 493 2,637 5,772
2017E 2,616 (1,680) 936 (584) 1,173 (821) 352 (168) 32 216 (43) 0 0 0 173 0.05 0.04 173 0.05 0.00
2018E 2,912 (1,707) 1,204 (602) 1,435 (833) 602 (162) 32 472 (94) 0 0 0 378 0.12 0.08 378 0.12 0.00
2017E 442 766 10 0 4,493 380 6,091 0 2,000 3,282 493 2,809 6,091
2018E 768 852 10 0 4,616 387 6,633 0 2,500 3,446 493 3,187 6,633
2013 501 6 59 (131) 436 (357) 0 (357) (21) 2,720 (585) 0 2,115 2,194 79 0.02
2014 (12) 12 290 (118) 171 (1,659) 0 (1,659) 384 0 (174) 0 210 (1,279) (1,488) (0.32)
2013 ‐8.5% ‐25.4% ‐31.9% 58.7% 36.4% 32.1% 35.6% 35.6% 7.2%
2015 (524) 33 645 (259) (105) (1,139) 0 (1,138) 441 52 (0) (61) 432 (804) (1,244) (0.27)
2014 8.5% ‐57.6% ‐102.5% 33.8% 14.2% ‐4.8% ‐0.8% ‐0.8% 83.8%
2016E 16 0 809 (482) 343 (1,000) 0 (1,000) 620 197 0 0 817 160 (657) (0.14)
2015 24.0% ‐5.3% 3790.5% 12.7% 10.8% ‐23.2% ‐25.7% ‐25.7% 9.9%
2017E 173 0 821 (437) 556 (968) 0 (968) 500 0 0 0 500 88 (412) (0.09)
2016E 24.1% 358.0% ‐103.3% 29.6% 40.0% 5.6% 0.7% 0.7% 20.0%
2018E 378 0 833 (429) 782 (956) 0 (956) 500 0 0 0 500 325 (175) (0.04)
2017E 11.3% 24.7% 946.0% 35.8% 44.8% 13.4% 6.6% 6.6% 20.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 5
2018E 11.3% 22.4% 118.8% 41.4% 49.3% 20.7% 13.0% 13.0% 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, PACE, PLE, TPOLY, M‐CHAI, CI, EARTH. KT ZMICO is a co‐underwriter of ALT, EKH, RJH.
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)
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 5 of 5
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
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Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
