Plan B Media - Global Alliance Partners
Plan B Media Buy (17E TP Bt6.80)
Company Update
Close Bt5.60
Media & Publishing August 1, 2017
Earnings upgrade/Earnings downgrade/Overview unchanged
Expect better 2Q17E earnings and continuing in 3Q17E Price Performance (%)
Maintain “Buy” We maintain our earnings projections in 2017‐18E for PLANB with expected CAGR of 23% owing to ad spending improvement for OOH media, including revenue from sport management. Potential upside will come from additional media managements, both domestic and overseas (M&A focus in Asian countries). We maintain our BUY call for PLANB with the DCF‐based TP of Bt6.80. 2Q17E earnings to expand 9% YoY, 19% QoQ We expect PLANB to report net profit of Bt120mn in 2Q17E, increasing by 9% YoY and 19% QoQ, based on a revenue assumption of Bt758mn, +25% YoY and +11% QoQ. The expected revenue expansion should come mainly from a higher occupancy rate to 64%, vs. 59% in 2Q16 and 61% in 1Q17, due to ad spending improvement for OOH media, especially for digital displays. Meanwhile, we expect PLANB to realize revenue of Bt30mn for sport media management. The gross profit margin (GPM) is likely to improve to 34%, vs. 32% in 1Q17, on higher occupancy rate. However, the GPM should stay flat compared with 2Q16 owing to higher costs related to media expansion (digital media nationwide).
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.165
0.198
KT ZMICO vs. consensus Share data
‐15.2%
‐24.2%
Reuters / Bloomberg
PLANB.BK/PLANB TB
Paid‐up Shares (m)
3,516.13
Par (Bt)
0.10
Market cap (Bt bn / US$ m)
20.00/592.00
Foreign limit / actual (%)
49.00/31.83
52 week High / Low (Bt)
6.70/4.14
Avg. daily T/O (shares 000) NVDR (%)
6,930.00 0.47
Estimated free float (%)
31.84
Beta
1.71
URL
www.planbmedia.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Raenoo Bhandasukdi Analyst no. 17989 [email protected] 66 (0) 2695‐5836
Better revenue momentum in 3Q17E PLANB’s earnings in 3Q17E are likely to continue improving, both YoY and QoQ, due to ongoing improvement of ad spending via OOH media. According to PLANB, strong revenue momentum in 3Q17E should be seen in every media platform, especially transit media, which has shown slow improvement in the previous 1‐2 quarters. It is likely that ad spenders will move ad spending to 3Q17E before the Royal Cremation in Oct‐17, as media displays may have to cease activities to pay respect for around 1‐2 weeks. Participating in bidding contest to manage media at AOT’s DMK and HKT PLANB (and also VGI) is participating (through subsidiaries that are responsible for airport media management for each company) in the bidding contest (highest revenue shared to AOT) to manage media space for AOT’s Don Muang International Airport (DMK, two terminals) and Phuket International Airport (HKT, new terminal), with AOT having proposed the TOR recently. The total media coverage is around 1,000 sq.m., with expected revenue capacity of around Bt80‐100mn (conservatively). Although the value is small (around 3% of PLANB’s revenue), the prime location may result in increased revenue capacity in the future if the media space is converted to digital displays. HKT’s award announcement is scheduled for 25 Aug while DMK’s award announcement is scheduled for 31 Aug. Financials and Valuation FY Ended 31 Dec Revenues (Bt mn) Net profit (Bt mn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net Gearing (%)
2015 2,154 400 0.114 43.46 0.070 0.843 2015 49.08 16.09 6.64 1.25 21.55 cash
2016 2,422 352 0.100 (12.36) 0.035 0.892 2016 56.00 16.87 6.28 0.63 11.54 cash
2017E 2,951 491 0.140 39.68 0.049 0.996 2017E 40.09 12.82 5.62 0.87 14.80 cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 3,198 532 0.151 8.43 0.053 1.099 2018E 36.98 11.21 5.10 0.95 14.46 cash
2019E 3,400 566 0.161 6.32 0.056 1.207 2019E 34.78 9.83 4.64 1.01 13.97 cash
Figure 1: PLANB’s PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2017E +2.0SD +1.5SD +1.0SD +0.5SD Average ‐0.5SD ‐1.0SD ‐1.5SD ‐2.0SD
75 70
+2.0 S.D.
65
+1.5 S.D.
60 55 50 45
+1.0 S.D. +0.5 S.D.
Avg. -0.5 S.D. -1.0 S.D.
40
-1 .5 S.D.
35
-2.0 S.D.
Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17
30
PER (x) 70.1 66.1 62.2 58.3 54.4 50.5 46.6 42.7 38.8
Implied market price (Bt) 9.88 9.33 8.78 8.22 7.67 7.12 6.57 6.02 5.47
Upside/Downside vs. current market price (%) 76.38 66.54 56.70 46.86 37.02 27.18 17.34 7.50 (2.34)
Source: Bloomberg, KT ZMICO Research
Figure 2: 2Q17E earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit SG&A EBITDA Interest expense Other income Income tax 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 (%)
2Q16 607 206 (86) 229 (0) 6 (15) 1 111 111 0.032
1Q17 684 217 (110) 217 (1) 9 (13) 2 101 101 0.029
2Q17E 758 254 (124) 245 (1) 9 (16) 2 120 120 0.034
% YoY 25.0 23.3 44.7 7.1 n.m. 41.6 6.3 265.0 8.8 8.8 8.5
% QoQ 11.0 17.1 12.9 12.6 n.m. 3.0 31.3 27.6 19.2 19.2 19.2
1H16 1,160 359 (162) 414 (0) 10 (33) (0) 171 171 0.05
1H17E 1,442 471 (234) 462 (2) 18 (29) 4 221 221 0.06
34.0 37.7 18.2 3.2 cash cash 0.8 15.0
31.7 31.8 14.8 3.0 cash cash 0.9 12.7
33.5 32.3 15.9
30.9 35.7 14.7 3.0 cash cash 0.8 11.3
32.7 32.0 15.3
% YoY 24.3 31.3 44.7 11.5 n.m. 77.8 (13.7) n.m. 29.6 29.6 29.3
2017E 2,951 1,020 (458) 1,056 ‐ 30 (90) 2 491 491 0.10
YTD % of 17E 48.9 46.2 51.2 43.7 ‐ 60.1 32.2 207.5 45.1 45.1 62.9
34.6 35.8 16.6 4.6 cash cash 1.0 14.8
Source: PLANB, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Financial tables
PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra items Gain (loss) from affiliates Minority interests Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btm) Cash and equivalents Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Minority interests Shareholder equity Total liab. & shareholder equity CASH FLOW (Btm) Net income Depreciation & amortization Change in working capital FX, non‐cash adjustment & others Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) Norm. EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2015 2,154 (1,348) 806 (302) 878 (374) 503 (13) 16 507 (101) 0 0 (0) (5) 400 0.114 0.11 400 0.114 0.070
2016 2,422 (1,639) 783 (384) 844 (445) 399 (1) 24 423 (64) 0 0 2 (9) 352 0.100 0.10 352 0.100 0.035
2017E 2,951 (1,931) 1,020 (458) 1,056 (495) 562 0 30 591 (90) 0 0 2 (12) 491 0.140 0.14 491 0.140 0.049
2015 429 0 1,242 1,722 3,393 2 1 413 22 2,958 3,393
2016 344 0 1,506 1,823 3,672 10 25 496 41 3,135 3,672
2017E 1,025 0 1,323 1,725 4,073 10 14 516 53 3,503 4,073
2015 400 374 (31) 0 744 (765) 0 (765) (1,373) 1,836 (74) 389 368 (21) (0.01)
2016 352 445 (438) 0 358 (246) 0 (246) 9 39 (246) (197) (85) 112 0.03
2017E 491 495 37 0 1,023 (209) 0 (209) (10) 0 (123) (133) 681 814 0.23
2015 47.0 42.9 43.5 37.4 40.8 23.4 18.6 18.6 20.0
2016 12.5 (3.9) (12.4) 32.3 34.8 16.5 14.5 14.5 15.2
2017E 21.8 25.2 39.7 34.6 35.8 19.0 16.6 16.6 15.2
2018E 3,198 (2,095) 1,103 (496) 1,151 (545) 607 0 32 639 (97) 0 0 4 (13) 532 0.151 0.15 532 0.151 0.053 2018E 1,651 0 1,093 1,733 4,476 10 4 546 66 3,864 4,476 2018E 532 545 (59) 0 1,018 (209) 0 (209) (10) 0 (172) (182) 626 808 0.23 2018E 8.4 9.0 8.4 34.5 36.0 19.0 16.6 16.6 15.2
2019E 3,400 (2,228) 1,172 (528) 1,239 (595) 644 0 34 678 (104) 0 0 5 (14) 566 0.161 0.16 566 0.161 0.056 2019E 2,366 0 803 1,723 4,892 1 3 568 81 4,243 4,892 2019E 566 595 (49) 0 1,112 (209) 0 (209) (1) 0 (186) (188) 715 903 0.26 2019E 6.3 7.6 6.3 34.5 36.4 19.0 16.6 16.6 15.3
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
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, TTL, NMG, SAWAD.
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 returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. 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 Bt5.60
Media & Publishing August 1, 2017
Earnings upgrade/Earnings downgrade/Overview unchanged
Expect better 2Q17E earnings and continuing in 3Q17E Price Performance (%)
Maintain “Buy” We maintain our earnings projections in 2017‐18E for PLANB with expected CAGR of 23% owing to ad spending improvement for OOH media, including revenue from sport management. Potential upside will come from additional media managements, both domestic and overseas (M&A focus in Asian countries). We maintain our BUY call for PLANB with the DCF‐based TP of Bt6.80. 2Q17E earnings to expand 9% YoY, 19% QoQ We expect PLANB to report net profit of Bt120mn in 2Q17E, increasing by 9% YoY and 19% QoQ, based on a revenue assumption of Bt758mn, +25% YoY and +11% QoQ. The expected revenue expansion should come mainly from a higher occupancy rate to 64%, vs. 59% in 2Q16 and 61% in 1Q17, due to ad spending improvement for OOH media, especially for digital displays. Meanwhile, we expect PLANB to realize revenue of Bt30mn for sport media management. The gross profit margin (GPM) is likely to improve to 34%, vs. 32% in 1Q17, on higher occupancy rate. However, the GPM should stay flat compared with 2Q16 owing to higher costs related to media expansion (digital media nationwide).
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.165
0.198
KT ZMICO vs. consensus Share data
‐15.2%
‐24.2%
Reuters / Bloomberg
PLANB.BK/PLANB TB
Paid‐up Shares (m)
3,516.13
Par (Bt)
0.10
Market cap (Bt bn / US$ m)
20.00/592.00
Foreign limit / actual (%)
49.00/31.83
52 week High / Low (Bt)
6.70/4.14
Avg. daily T/O (shares 000) NVDR (%)
6,930.00 0.47
Estimated free float (%)
31.84
Beta
1.71
URL
www.planbmedia.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Raenoo Bhandasukdi Analyst no. 17989 [email protected] 66 (0) 2695‐5836
Better revenue momentum in 3Q17E PLANB’s earnings in 3Q17E are likely to continue improving, both YoY and QoQ, due to ongoing improvement of ad spending via OOH media. According to PLANB, strong revenue momentum in 3Q17E should be seen in every media platform, especially transit media, which has shown slow improvement in the previous 1‐2 quarters. It is likely that ad spenders will move ad spending to 3Q17E before the Royal Cremation in Oct‐17, as media displays may have to cease activities to pay respect for around 1‐2 weeks. Participating in bidding contest to manage media at AOT’s DMK and HKT PLANB (and also VGI) is participating (through subsidiaries that are responsible for airport media management for each company) in the bidding contest (highest revenue shared to AOT) to manage media space for AOT’s Don Muang International Airport (DMK, two terminals) and Phuket International Airport (HKT, new terminal), with AOT having proposed the TOR recently. The total media coverage is around 1,000 sq.m., with expected revenue capacity of around Bt80‐100mn (conservatively). Although the value is small (around 3% of PLANB’s revenue), the prime location may result in increased revenue capacity in the future if the media space is converted to digital displays. HKT’s award announcement is scheduled for 25 Aug while DMK’s award announcement is scheduled for 31 Aug. Financials and Valuation FY Ended 31 Dec Revenues (Bt mn) Net profit (Bt mn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec Norm. PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net Gearing (%)
2015 2,154 400 0.114 43.46 0.070 0.843 2015 49.08 16.09 6.64 1.25 21.55 cash
2016 2,422 352 0.100 (12.36) 0.035 0.892 2016 56.00 16.87 6.28 0.63 11.54 cash
2017E 2,951 491 0.140 39.68 0.049 0.996 2017E 40.09 12.82 5.62 0.87 14.80 cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2018E 3,198 532 0.151 8.43 0.053 1.099 2018E 36.98 11.21 5.10 0.95 14.46 cash
2019E 3,400 566 0.161 6.32 0.056 1.207 2019E 34.78 9.83 4.64 1.01 13.97 cash
Figure 1: PLANB’s PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2017E +2.0SD +1.5SD +1.0SD +0.5SD Average ‐0.5SD ‐1.0SD ‐1.5SD ‐2.0SD
75 70
+2.0 S.D.
65
+1.5 S.D.
60 55 50 45
+1.0 S.D. +0.5 S.D.
Avg. -0.5 S.D. -1.0 S.D.
40
-1 .5 S.D.
35
-2.0 S.D.
Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17
30
PER (x) 70.1 66.1 62.2 58.3 54.4 50.5 46.6 42.7 38.8
Implied market price (Bt) 9.88 9.33 8.78 8.22 7.67 7.12 6.57 6.02 5.47
Upside/Downside vs. current market price (%) 76.38 66.54 56.70 46.86 37.02 27.18 17.34 7.50 (2.34)
Source: Bloomberg, KT ZMICO Research
Figure 2: 2Q17E earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit SG&A EBITDA Interest expense Other income Income tax 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 (%)
2Q16 607 206 (86) 229 (0) 6 (15) 1 111 111 0.032
1Q17 684 217 (110) 217 (1) 9 (13) 2 101 101 0.029
2Q17E 758 254 (124) 245 (1) 9 (16) 2 120 120 0.034
% YoY 25.0 23.3 44.7 7.1 n.m. 41.6 6.3 265.0 8.8 8.8 8.5
% QoQ 11.0 17.1 12.9 12.6 n.m. 3.0 31.3 27.6 19.2 19.2 19.2
1H16 1,160 359 (162) 414 (0) 10 (33) (0) 171 171 0.05
1H17E 1,442 471 (234) 462 (2) 18 (29) 4 221 221 0.06
34.0 37.7 18.2 3.2 cash cash 0.8 15.0
31.7 31.8 14.8 3.0 cash cash 0.9 12.7
33.5 32.3 15.9
30.9 35.7 14.7 3.0 cash cash 0.8 11.3
32.7 32.0 15.3
% YoY 24.3 31.3 44.7 11.5 n.m. 77.8 (13.7) n.m. 29.6 29.6 29.3
2017E 2,951 1,020 (458) 1,056 ‐ 30 (90) 2 491 491 0.10
YTD % of 17E 48.9 46.2 51.2 43.7 ‐ 60.1 32.2 207.5 45.1 45.1 62.9
34.6 35.8 16.6 4.6 cash cash 1.0 14.8
Source: PLANB, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Financial tables
PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra items Gain (loss) from affiliates Minority interests Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btm) Cash and equivalents Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Minority interests Shareholder equity Total liab. & shareholder equity CASH FLOW (Btm) Net income Depreciation & amortization Change in working capital FX, non‐cash adjustment & others Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) Norm. EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2015 2,154 (1,348) 806 (302) 878 (374) 503 (13) 16 507 (101) 0 0 (0) (5) 400 0.114 0.11 400 0.114 0.070
2016 2,422 (1,639) 783 (384) 844 (445) 399 (1) 24 423 (64) 0 0 2 (9) 352 0.100 0.10 352 0.100 0.035
2017E 2,951 (1,931) 1,020 (458) 1,056 (495) 562 0 30 591 (90) 0 0 2 (12) 491 0.140 0.14 491 0.140 0.049
2015 429 0 1,242 1,722 3,393 2 1 413 22 2,958 3,393
2016 344 0 1,506 1,823 3,672 10 25 496 41 3,135 3,672
2017E 1,025 0 1,323 1,725 4,073 10 14 516 53 3,503 4,073
2015 400 374 (31) 0 744 (765) 0 (765) (1,373) 1,836 (74) 389 368 (21) (0.01)
2016 352 445 (438) 0 358 (246) 0 (246) 9 39 (246) (197) (85) 112 0.03
2017E 491 495 37 0 1,023 (209) 0 (209) (10) 0 (123) (133) 681 814 0.23
2015 47.0 42.9 43.5 37.4 40.8 23.4 18.6 18.6 20.0
2016 12.5 (3.9) (12.4) 32.3 34.8 16.5 14.5 14.5 15.2
2017E 21.8 25.2 39.7 34.6 35.8 19.0 16.6 16.6 15.2
2018E 3,198 (2,095) 1,103 (496) 1,151 (545) 607 0 32 639 (97) 0 0 4 (13) 532 0.151 0.15 532 0.151 0.053 2018E 1,651 0 1,093 1,733 4,476 10 4 546 66 3,864 4,476 2018E 532 545 (59) 0 1,018 (209) 0 (209) (10) 0 (172) (182) 626 808 0.23 2018E 8.4 9.0 8.4 34.5 36.0 19.0 16.6 16.6 15.2
2019E 3,400 (2,228) 1,172 (528) 1,239 (595) 644 0 34 678 (104) 0 0 5 (14) 566 0.161 0.16 566 0.161 0.056 2019E 2,366 0 803 1,723 4,892 1 3 568 81 4,243 4,892 2019E 566 595 (49) 0 1,112 (209) 0 (209) (1) 0 (186) (188) 715 903 0.26 2019E 6.3 7.6 6.3 34.5 36.4 19.0 16.6 16.6 15.3
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
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, TTL, NMG, SAWAD.
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 returns over a six‐month period due to specific UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant catalysts SELL: Expecting negative total returns of 10% or more primary market index by 10% over the next 12 months. 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
