Mono Technology
Mono Technology Outperform (17E TP Bt3.78)
Company Update
Close Bt3.58
Media & Publishing May 2, 2017
Earnings upgrade/Earnings downgrade/Overview unchanged
Expect a core profit for 1Q17E Price Performance (%)
Bottom line to turn to profit We forecast MONO’s core profit at Bt11mn, turning from a core loss of Bt80mn in 1Q16 and Bt146mn in 4Q16. MONO29 continues to be a growth driver while the mobile (MVAS) business remains a drag. The first movie from T Moment is also another hindrance due to unsuccessful ticket sales. We maintain our Outperform rating with the 17E TP at Bt3.78, +5.6% upside. A higher‐than‐expected ad rate and utilization rate will be key catalysts for the bottom line this year. Ad rate to jump along with higher TV rating MONO29 continues to gain more audiences as its average TV rating in 1Q17 was 0.667, solid growth of 43%YoY. We expect its ad rate to grow from Bt15,000/min in 1Q16 to Bt25,000/min in 1Q17 while the utilization rate will increase from 90% in 1Q16 to 95% in 1Q17. TV revenue is forecasted to skyrocket by 91%YoY and 160%QoQ to Bt385mn.
Source: SET Smart
FY17
FY18
Consensus EPS Bt)
0.076
0.126
KT ZMICO vs. consensus Share data
‐7.9%
11.1%
Reuters / Bloomberg
MONO.BK/MONO TB
Paid‐up Shares (m)
3,343.94
Par (Bt)
0.10
Market cap (Bt bn / US$ m) Foreign limit / actual (%)
12.00/346.00 49.00/1.23
52 week High / Low (Bt)
4.10/2.20
Avg. daily T/O (shares 000)
18,434.00
NVDR (%)
1.46
Estimated free float (%)
23.59
Beta
1.68
URL
www.mono.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Anapat Wanuschaiyapruk Analyst, no. 57076 [email protected] 66 (0) 2-624‐6289
A drag from mobile and movies We expect revenue from mobile business to continue to be soft at ‐5%YoY (but increase 6%QoQ) on the declining trend of SMS usage and content downloads. The movie business will be another hindrance due to low ticket sales. Total box office revenue as of 30 March was only Bt10mn, compared to production costs of about Bt30mn. We expect entertainment business (which consists of music and movies) to report a gross loss at Bt10mn vs. Bt1mn in 1Q16. Improving gross margin Even though we expect a worsening gross margin for the entertainment business, the total gross margin is still on the way up. The company is managing its costs and trying to limit the cost growth at less than 5%. We assume total costs will grow 5% mainly from amortization of movies and series on MONO29 and forecast the total gross margin at 41.5% for 1Q17E, improving from 30.7% in 1Q16. Outperform maintained We maintain our Outperform rating with two catalysts. First, the ad rate might beat our forecast since it is still cheaper compared to peers. Second, the success of another two movies from T Moment this year will be an addition to our profit forecast (we currently forecast no profit). Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EP S growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 1,893 (487) (0.11) 3816.9% 0.00 0.78 2015 ‐32.94 62.94 4.48 0.0% ‐18.2% 28%
2016 2,077 (250) (0.05) ‐48.7% 0.00 0.74 2016 ‐64.23 16.93 4.74 0.0% ‐10.4% 61%
2017E 2,732 310 0.07 ‐224.0% 0.00 0.99 2017E 51.79 9.56 3.54 0.0% 10.7% 26%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 3,224 648 0.14 109.3% 0.00 1.18 2018E 24.75 7.41 2.97 0.0% 17.3% 14%
2019E 3,651 933 0.20 44.1% 0.00 1.45 2019E 17.18 6.21 2.42 0.0% 20.5% ‐1%
Figure 1: MONO’s 1Q17E earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Other extraordinary Items Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%)
1Q16
4Q16
1Q17E
% YoY
% QoQ
2017E
% YoY
YTD
491 97 150 (35) 6 (5) 0 0 (80) (80) (0.03) 19.8 30.7 (16.3)
395 1 130 (39) 12 (1) (46) 0 (193) (146) (0.06) 0.1 33.0 (37.0)
606 185 251 (40) 10 (3) 0 (1) 11 11 0.00 30.5 41.5 1.8
23.4 89.7 66.9 15.5 73.9 (41.6) n.a. n.a. 113.3 113.3 110.6
53.5 32,428.5 92.7 2.6 (13.9) 205.8 n.a. n.a. 105.5 107.3 105.7
2,732 1,051 1,421 (141) 36 (77) 0 0 310 310 0.09 37.6 51.3 10.5
30.5 130.1 73.2 (2.8) (0.0) 636.2 n.a. n.a. 213.9 239.9 205.2
22.3 18.1 18.1 28.4 27.8 4.1 n.a. n.a. 3.7 3.7 3.9
Sources: MONO, KT Zmico Research
Figure 3: Ad rate and utilization rate
Figure 2: MONO29’s TV rating 1.4
(Bt'k/min)
1.2 1.0 0.8 0.6 0.4 0.2
WORK
One
RS
Feb17
Dec16
Oct16
Aug16
Jun16
Apr16
Feb16
Oct15
Dec15
Aug15
Jun15
Apr15
Feb15
Dec14
0.0
40 35 30 25 20 15 10 5 0
117%
116% 98%
86%
92%
20 10
10
12
15
15
120%
98%
90%
95% 22
22
25
56%
100% 80% 60% 40% 20% 0%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Ad rate
MONO
Source: MONO, KT Zmico Research
Source: MONO, KT Zmico Research
Figure 4: TV revenue
Figure 5: Revenue forecast
Utilization rate
(Bt'mn) 4,000
3,610 3,192
3,500 2,711
3,000 2,500 2,000 1,500
1,407
1,893
920
1,122
2013
2014
1,013
632
0
2015 TV
2,077
840
2016
MVAS
Source: MONO, KT Zmico Research
1,623
64%
60%
59% 45%
50%
30% 2,110
2,532
50%
38%
34%
40%
840
842
955
1,000 500
1,526
840
70%
21%
20%
13%
10% 2017E Other
2018E
2019E
0% 2012
2013
2014
2015
2016
2017E 2018E 2019E
Source: MONO, 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 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 (%)
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) 216 (655) (439) (133) 32 (540) 54 0 0 0 (487) (0.16) (0.11) (487) (0.16) 0.00
2016 2,077 (1,634) 443 (525) 802 (885) (83) (145) 36 (192) (10) (2) (46) 0 (250) (0.08) (0.05) (203) (0.08) 0.00
2017E 2,732 (1,681) 1,051 (559) 1,421 (929) 492 (141) 36 387 (77) 0 0 0 310 0.09 0.07 310 0.09 0.00
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
2016 87 530 9 51 4,315 400 5,392 196 1,342 3,026 320 2,366 5,392
2017E 363 697 9 51 4,386 408 5,914 241 1,003 2,483 498 3,430 5,914
2018E 3,224 (1,737) 1,487 (597) 1,834 (943) 891 (118) 37 810 (162) 0 0 0 648 0.19 0.14 648 0.19 0.00
2014 (12) 12 290 (118) 171 (1,659) 0 (1,659) 384 0 (174) 0 210 (1,279) (1,488) (0.32)
2015 (487) 33 655 (307) (105) (1,139) 0 (1,138) 441 52 (62) 0 432 (804) (1,244) (0.27)
2014 8.5% ‐57.6% ‐102.5% 33.8% 14.2% ‐4.8% ‐0.8% ‐0.8% 83.8%
2016 (250) 59 885 (430) 264 (1,042) (83) (1,125) 658 95 (0) 0 753 (107) (862) (0.19)
2015 24.0% ‐0.5% 3790.5% 12.7% 11.4% ‐23.2% ‐25.7% ‐25.7% 9.9%
2018E 586 822 9 51 4,433 414 6,315 241 903 2,237 498 4,078 6,315
2017E 310 0 929 (424) 815 (1,001) 0 (1,001) (294) 755 0 0 461 276 (186) (0.04)
2016 9.7% 271.8% ‐50.3% 21.3% 38.6% ‐4.0% ‐12.0% ‐9.8% ‐5.0%
2019E 1,026 920 10 51 4,484 419 6,910 241 803 1,999 498 4,910 6,910
2018E 648 0 943 (278) 1,313 (990) 0 (990) (100) 0 0 0 (100) 223 323 0.07
2017E 31.5% 77.1% ‐214.5% 38.5% 52.0% 18.0% 11.3% 11.3% 20.0%
2019E 3,610 (1,801) 1,808 (631) 2,135 (958) 1,177 (101) 38 1,114 (223) 0 0 0 891 0.26 0.19 891 0.26 0.00
2019E 891 0 958 (251) 1,598 (1,009) 0 (1,009) (100) 0 0 0 (100) 489 589 0.13
2018E 18.0% 29.1% 109.3% 46.1% 56.9% 27.6% 20.1% 20.1% 20.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2019E 13.1% 19.2% 45.2% 50.1% 59.2% 32.6% 24.7% 24.7% 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, 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 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
Company Update
Close Bt3.58
Media & Publishing May 2, 2017
Earnings upgrade/Earnings downgrade/Overview unchanged
Expect a core profit for 1Q17E Price Performance (%)
Bottom line to turn to profit We forecast MONO’s core profit at Bt11mn, turning from a core loss of Bt80mn in 1Q16 and Bt146mn in 4Q16. MONO29 continues to be a growth driver while the mobile (MVAS) business remains a drag. The first movie from T Moment is also another hindrance due to unsuccessful ticket sales. We maintain our Outperform rating with the 17E TP at Bt3.78, +5.6% upside. A higher‐than‐expected ad rate and utilization rate will be key catalysts for the bottom line this year. Ad rate to jump along with higher TV rating MONO29 continues to gain more audiences as its average TV rating in 1Q17 was 0.667, solid growth of 43%YoY. We expect its ad rate to grow from Bt15,000/min in 1Q16 to Bt25,000/min in 1Q17 while the utilization rate will increase from 90% in 1Q16 to 95% in 1Q17. TV revenue is forecasted to skyrocket by 91%YoY and 160%QoQ to Bt385mn.
Source: SET Smart
FY17
FY18
Consensus EPS Bt)
0.076
0.126
KT ZMICO vs. consensus Share data
‐7.9%
11.1%
Reuters / Bloomberg
MONO.BK/MONO TB
Paid‐up Shares (m)
3,343.94
Par (Bt)
0.10
Market cap (Bt bn / US$ m) Foreign limit / actual (%)
12.00/346.00 49.00/1.23
52 week High / Low (Bt)
4.10/2.20
Avg. daily T/O (shares 000)
18,434.00
NVDR (%)
1.46
Estimated free float (%)
23.59
Beta
1.68
URL
www.mono.co.th
CGR
Anti‐corruption
Level 4 (Certified)
Anapat Wanuschaiyapruk Analyst, no. 57076 [email protected] 66 (0) 2-624‐6289
A drag from mobile and movies We expect revenue from mobile business to continue to be soft at ‐5%YoY (but increase 6%QoQ) on the declining trend of SMS usage and content downloads. The movie business will be another hindrance due to low ticket sales. Total box office revenue as of 30 March was only Bt10mn, compared to production costs of about Bt30mn. We expect entertainment business (which consists of music and movies) to report a gross loss at Bt10mn vs. Bt1mn in 1Q16. Improving gross margin Even though we expect a worsening gross margin for the entertainment business, the total gross margin is still on the way up. The company is managing its costs and trying to limit the cost growth at less than 5%. We assume total costs will grow 5% mainly from amortization of movies and series on MONO29 and forecast the total gross margin at 41.5% for 1Q17E, improving from 30.7% in 1Q16. Outperform maintained We maintain our Outperform rating with two catalysts. First, the ad rate might beat our forecast since it is still cheaper compared to peers. Second, the success of another two movies from T Moment this year will be an addition to our profit forecast (we currently forecast no profit). Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EP S growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2015 1,893 (487) (0.11) 3816.9% 0.00 0.78 2015 ‐32.94 62.94 4.48 0.0% ‐18.2% 28%
2016 2,077 (250) (0.05) ‐48.7% 0.00 0.74 2016 ‐64.23 16.93 4.74 0.0% ‐10.4% 61%
2017E 2,732 310 0.07 ‐224.0% 0.00 0.99 2017E 51.79 9.56 3.54 0.0% 10.7% 26%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 3,224 648 0.14 109.3% 0.00 1.18 2018E 24.75 7.41 2.97 0.0% 17.3% 14%
2019E 3,651 933 0.20 44.1% 0.00 1.45 2019E 17.18 6.21 2.42 0.0% 20.5% ‐1%
Figure 1: MONO’s 1Q17E earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Other extraordinary Items Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%)
1Q16
4Q16
1Q17E
% YoY
% QoQ
2017E
% YoY
YTD
491 97 150 (35) 6 (5) 0 0 (80) (80) (0.03) 19.8 30.7 (16.3)
395 1 130 (39) 12 (1) (46) 0 (193) (146) (0.06) 0.1 33.0 (37.0)
606 185 251 (40) 10 (3) 0 (1) 11 11 0.00 30.5 41.5 1.8
23.4 89.7 66.9 15.5 73.9 (41.6) n.a. n.a. 113.3 113.3 110.6
53.5 32,428.5 92.7 2.6 (13.9) 205.8 n.a. n.a. 105.5 107.3 105.7
2,732 1,051 1,421 (141) 36 (77) 0 0 310 310 0.09 37.6 51.3 10.5
30.5 130.1 73.2 (2.8) (0.0) 636.2 n.a. n.a. 213.9 239.9 205.2
22.3 18.1 18.1 28.4 27.8 4.1 n.a. n.a. 3.7 3.7 3.9
Sources: MONO, KT Zmico Research
Figure 3: Ad rate and utilization rate
Figure 2: MONO29’s TV rating 1.4
(Bt'k/min)
1.2 1.0 0.8 0.6 0.4 0.2
WORK
One
RS
Feb17
Dec16
Oct16
Aug16
Jun16
Apr16
Feb16
Oct15
Dec15
Aug15
Jun15
Apr15
Feb15
Dec14
0.0
40 35 30 25 20 15 10 5 0
117%
116% 98%
86%
92%
20 10
10
12
15
15
120%
98%
90%
95% 22
22
25
56%
100% 80% 60% 40% 20% 0%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Ad rate
MONO
Source: MONO, KT Zmico Research
Source: MONO, KT Zmico Research
Figure 4: TV revenue
Figure 5: Revenue forecast
Utilization rate
(Bt'mn) 4,000
3,610 3,192
3,500 2,711
3,000 2,500 2,000 1,500
1,407
1,893
920
1,122
2013
2014
1,013
632
0
2015 TV
2,077
840
2016
MVAS
Source: MONO, KT Zmico Research
1,623
64%
60%
59% 45%
50%
30% 2,110
2,532
50%
38%
34%
40%
840
842
955
1,000 500
1,526
840
70%
21%
20%
13%
10% 2017E Other
2018E
2019E
0% 2012
2013
2014
2015
2016
2017E 2018E 2019E
Source: MONO, 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 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 (%)
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) 216 (655) (439) (133) 32 (540) 54 0 0 0 (487) (0.16) (0.11) (487) (0.16) 0.00
2016 2,077 (1,634) 443 (525) 802 (885) (83) (145) 36 (192) (10) (2) (46) 0 (250) (0.08) (0.05) (203) (0.08) 0.00
2017E 2,732 (1,681) 1,051 (559) 1,421 (929) 492 (141) 36 387 (77) 0 0 0 310 0.09 0.07 310 0.09 0.00
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
2016 87 530 9 51 4,315 400 5,392 196 1,342 3,026 320 2,366 5,392
2017E 363 697 9 51 4,386 408 5,914 241 1,003 2,483 498 3,430 5,914
2018E 3,224 (1,737) 1,487 (597) 1,834 (943) 891 (118) 37 810 (162) 0 0 0 648 0.19 0.14 648 0.19 0.00
2014 (12) 12 290 (118) 171 (1,659) 0 (1,659) 384 0 (174) 0 210 (1,279) (1,488) (0.32)
2015 (487) 33 655 (307) (105) (1,139) 0 (1,138) 441 52 (62) 0 432 (804) (1,244) (0.27)
2014 8.5% ‐57.6% ‐102.5% 33.8% 14.2% ‐4.8% ‐0.8% ‐0.8% 83.8%
2016 (250) 59 885 (430) 264 (1,042) (83) (1,125) 658 95 (0) 0 753 (107) (862) (0.19)
2015 24.0% ‐0.5% 3790.5% 12.7% 11.4% ‐23.2% ‐25.7% ‐25.7% 9.9%
2018E 586 822 9 51 4,433 414 6,315 241 903 2,237 498 4,078 6,315
2017E 310 0 929 (424) 815 (1,001) 0 (1,001) (294) 755 0 0 461 276 (186) (0.04)
2016 9.7% 271.8% ‐50.3% 21.3% 38.6% ‐4.0% ‐12.0% ‐9.8% ‐5.0%
2019E 1,026 920 10 51 4,484 419 6,910 241 803 1,999 498 4,910 6,910
2018E 648 0 943 (278) 1,313 (990) 0 (990) (100) 0 0 0 (100) 223 323 0.07
2017E 31.5% 77.1% ‐214.5% 38.5% 52.0% 18.0% 11.3% 11.3% 20.0%
2019E 3,610 (1,801) 1,808 (631) 2,135 (958) 1,177 (101) 38 1,114 (223) 0 0 0 891 0.26 0.19 891 0.26 0.00
2019E 891 0 958 (251) 1,598 (1,009) 0 (1,009) (100) 0 0 0 (100) 489 589 0.13
2018E 18.0% 29.1% 109.3% 46.1% 56.9% 27.6% 20.1% 20.1% 20.0%
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2019E 13.1% 19.2% 45.2% 50.1% 59.2% 32.6% 24.7% 24.7% 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, 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 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
