VGI Global Media Underperform (FY17E TP Bt5.20)
VGI Global Media Underperform (FY17E TP Bt5.20)
Earnings Review
Close Bt5.45
Media & Publishing November 3, 2016
Beat forecast/Below forecast/In line
Net profit fell owing to higher expenses Price Performance (%)
Mourning period to pressure share price in the short term VGI continued to deliver weak results in 2QFY17 owing to weak ad industry spending and higher expenses despite fully consolidating with MACO. Meanwhile, we expect the mourning period to add significant downside risk to our earnings estimates in FY17E. Although we still believe in VGI’s long‐term growth potential owing to being a beneficiary of BTS network expansion along with other new business, however, we expect earnings contribution from new business to be insignificant in FY17‐18E. We thus maintain our “Underperform” rating for VGI with the FY17E SOTP‐based TP of Bt5.20 (does not yet include new business). Normalized profit declined owing mainly to higher SG&A expenses VGI delivered net profit of Bt198mn in 2QFY17 (Jul‐Sep 16), falling by 24% YoY and 37% QoQ owing to the absence of net extra gains booked in both 2QFY16 (Bt41mn) and 1QFY17 (Bt135mn). Stripping out extra items, VGI reported normalized profit of Bt198mn, falling by 9% YoY but increasing by 11% QoQ. On a yearly basis, norm. profit fell owing to the decline of the gross profit margin and higher SG&A expenses, partly from MACO (consolidated with MACO starting from 1 June 2016 after stake holding increased to 37.42%, vs. 24.92% previously). Meanwhile, SG&A expenses were higher owing partly to expenses related to business expansion for both VGI and MACO.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.135
0.163
KT ZMICO vs. consensus Share data
10.4%
‐5.5%
Reuters / Bloomberg
VGI.BK/VGI TB
Paid‐up Shares (m)
6,864.33
Par (Bt)
0.10
Market cap (Bt bn / US$ m)
37.00/1,069.00
Foreign limit / actual (%)
49.00/9.24
52 week High / Low (Bt)
6.95/3.52
Avg. daily T/O (shares 000)
14,971.00
NVDR (%)
2.85
Estimated free float (%)
25.11
Beta
1.20
URL
www.vgi.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Raenoo Bhandasukdi Analyst no. 17989 [email protected] 66 (0) 2695‐5836
Revenue expansion from consolidation with MACO In 2QFY17, VGI posted revenue of Bt712mn, +33% YoY and +29% QoQ, owing to the full‐quarter consolidation with MACO. The major source of income still came from BTS‐related revenue at Bt481mn (68% of total), flat YoY owing to weak ad industry spending but increasing by 12% QoQ owing to the seasonal pattern. Revenue from office buildings and others continued to show the strongest growth (+37% YoY, +18% QoQ) owing mainly to building expansion. In MACO’s separate financial statement, its revenue was flat YoY and declined slightly by 5% QoQ to Bt172mn, also due to the weak ad industry. The gross profit margin (GPM) was lower to 62%, vs. 64% in 2QFY16, due to the revenue contribution from MACO (offers a lower GPM compared with BTS‐related revenue). Downside risk to net profit in FY17E from mourning period Our net profit estimates in FY17E for VGI are under review for a possible downgrade owing to weaker‐than‐expected 1HFY17 normalized profit and the impact of the mourning period. Financials and Valuation FY Ended 31 Mar Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm. profit (Btmn) Norm. EPS (Bt) Norm. EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Mar PER (x) EV/EBITDA (x) P/BV (x) Dividend yield (%) ROE (%) Net gearing (%)
FY14 3,149 1,146 0.334 1,146 0.334 11.08 0.320 0.569 FY14 16.33 10.86 9.58 5.87 60.71 cash
FY15 2,963 838 0.122 999 0.146 (56.38) 0.176 0.266 FY15 37.43 12.17 20.45 3.23 44.29 18.75
FY16 2,106 941 0.137 852 0.124 (14.73) 0.110 0.327 FY16 43.90 14.41 16.68 2.02 46.20 5.70
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 3
FY17E 2,890 1,023 0.149 888 0.129 4.03 0.134 0.360 FY17E 36.59 10.92 15.12 2.46 43.36 8.55
FY18E 3,756 1,055 0.154 1,055 0.154 19.38 0.138 0.391 FY18E 35.45 10.32 13.93 2.54 40.92 cash
Figure 1: Summary of SOTP‐based valuation for VGI Business
% Holding
VGI
MACO
37.42
SOTP‐based
Valuation Method
Value to VGI (Bt)
DCF (WACC 8%)
5.00
Tendering price of Bt1.10
0.20
5.20
Source: KT ZMICO Research
Figure 2: VGI’s PER band and sensitivity of market prices based on PER at different standard deviation levels FY17E +1.0SD +0.5SD Average ‐0.5SD ‐1.0SD ‐1.5SD ‐2.0SD ‐2.5SD
(X) 70 +2 S.D.
60 +1 S.D.
50 Avg. 40 30
-1 S.D. 20
-2 S.D.
0
Oct-12 Nov-12 Jan-13 Feb-13 Apr-13 May-13 Jul-13 Aug-13 Oct-13 Nov-13 Jan-14 Feb-14 Apr-14 May-14 Jul-14 Aug-14 Oct-14 Dec-14 Jan-15 Mar-15 Apr-15 Jun-15 Jul-15 Sep-15 Oct-15 Dec-15 Jan-16 Mar-16 Apr-16 Jun-16 Jul-16 Sep-16 Oct-16
10
PER (x) 48.0 43.0 38.0 33.0 28.0 23.0 18.0 13.0
Implied market price (Bt) 7.15 6.41 5.66 4.92 4.17 3.43 2.68 1.94
Upside/Downside vs. current market price (%) 31.2 17.6 3.9 (9.8) (23.4) (37.1) (50.8) (64.5)
Source: Bloomberg, KT ZMICO Research
Figure 3: VGI’s 2QFY17 (Jul‐Sep 16) earnings review Profit and Loss (Btmn) Year‐end 31 Mar Revenue Gross profit SG&A EBITDA Interest expense Other income Income tax Other extra items Gn (Ls) from affiliates Net profit (loss) Normalized profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt/equity (x) BVPS (Bt) ROE (%) Revenue structure BTS‐related Office building & others MACO
2QFY16 537 345 (97) 288 (4) 8 (45) 41 11 259 218 0.038
1QFY17 551 338 (106) 281 (2) 7 (58) 135 4 313 178 0.046
2QFY17 712 438 (187) 326 (4) 11 (52) ‐ 2 198 198 0.029
% YoY 32.6 27.1 92.2 13.3 9.8 35.8 14.4 (100.0) (85.6) (23.6) (9.3) (23.6)
% QoQ 29.3 29.5 75.9 15.9 91.8 65.1 (11.3) (100.0) (55.9) (36.8) 11.1 (36.8)
1HFY17 1,262 777 (294) 607 (6) 17 (110) 135 5 511 376 0.074
% YoY 16.2 14.9 52.1 8.4 (16.6) (20.8) 16.0 58.1 (47.2) 2.5 (9.0) 2.5
64.3 54.4 40.6 0.9 69.7 0.2 0.3 41.3
61.5 51.0 32.4 1.2 114.1 0.2 0.4 29.7 430 66 55
61.6 45.8 27.8 1.1 64.4 0.4 0.3 32.3
61.5 48.1 29.8 1.1 81.4 0.4 0.3 32.8
481 78 153
0.2 36.8 n.m.
11.9 18.2 n.m.
480 57 0
FY17E 2,890 1,778 (588) 1,398 (8) 37 (235) 135 17 1,023 888 0.149
YTD (% of 17E) 43.7 43.7 49.9 43.4 77.0 47.2 46.7 100.0 30.4 50.0 42.3 50.0
61.5 48.4 35.4 0.9 154.3 0.0 0.3 43.4
Source: VGI, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 3
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, PACE, TPOLY, M‐CHAI, TFD, SUTHA. KT ZMICO is a co‐underwriter of ALLA.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 3
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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
th
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.
Earnings Review
Close Bt5.45
Media & Publishing November 3, 2016
Beat forecast/Below forecast/In line
Net profit fell owing to higher expenses Price Performance (%)
Mourning period to pressure share price in the short term VGI continued to deliver weak results in 2QFY17 owing to weak ad industry spending and higher expenses despite fully consolidating with MACO. Meanwhile, we expect the mourning period to add significant downside risk to our earnings estimates in FY17E. Although we still believe in VGI’s long‐term growth potential owing to being a beneficiary of BTS network expansion along with other new business, however, we expect earnings contribution from new business to be insignificant in FY17‐18E. We thus maintain our “Underperform” rating for VGI with the FY17E SOTP‐based TP of Bt5.20 (does not yet include new business). Normalized profit declined owing mainly to higher SG&A expenses VGI delivered net profit of Bt198mn in 2QFY17 (Jul‐Sep 16), falling by 24% YoY and 37% QoQ owing to the absence of net extra gains booked in both 2QFY16 (Bt41mn) and 1QFY17 (Bt135mn). Stripping out extra items, VGI reported normalized profit of Bt198mn, falling by 9% YoY but increasing by 11% QoQ. On a yearly basis, norm. profit fell owing to the decline of the gross profit margin and higher SG&A expenses, partly from MACO (consolidated with MACO starting from 1 June 2016 after stake holding increased to 37.42%, vs. 24.92% previously). Meanwhile, SG&A expenses were higher owing partly to expenses related to business expansion for both VGI and MACO.
Source: SET Smart
FY17
FY18
Consensus EPS (Bt)
0.135
0.163
KT ZMICO vs. consensus Share data
10.4%
‐5.5%
Reuters / Bloomberg
VGI.BK/VGI TB
Paid‐up Shares (m)
6,864.33
Par (Bt)
0.10
Market cap (Bt bn / US$ m)
37.00/1,069.00
Foreign limit / actual (%)
49.00/9.24
52 week High / Low (Bt)
6.95/3.52
Avg. daily T/O (shares 000)
14,971.00
NVDR (%)
2.85
Estimated free float (%)
25.11
Beta
1.20
URL
www.vgi.co.th
CGR
Anti‐corruption
Level 2 (Declared)
Raenoo Bhandasukdi Analyst no. 17989 [email protected] 66 (0) 2695‐5836
Revenue expansion from consolidation with MACO In 2QFY17, VGI posted revenue of Bt712mn, +33% YoY and +29% QoQ, owing to the full‐quarter consolidation with MACO. The major source of income still came from BTS‐related revenue at Bt481mn (68% of total), flat YoY owing to weak ad industry spending but increasing by 12% QoQ owing to the seasonal pattern. Revenue from office buildings and others continued to show the strongest growth (+37% YoY, +18% QoQ) owing mainly to building expansion. In MACO’s separate financial statement, its revenue was flat YoY and declined slightly by 5% QoQ to Bt172mn, also due to the weak ad industry. The gross profit margin (GPM) was lower to 62%, vs. 64% in 2QFY16, due to the revenue contribution from MACO (offers a lower GPM compared with BTS‐related revenue). Downside risk to net profit in FY17E from mourning period Our net profit estimates in FY17E for VGI are under review for a possible downgrade owing to weaker‐than‐expected 1HFY17 normalized profit and the impact of the mourning period. Financials and Valuation FY Ended 31 Mar Revenues (Btmn) Net profit (Btmn) EPS (Bt) Norm. profit (Btmn) Norm. EPS (Bt) Norm. EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Mar PER (x) EV/EBITDA (x) P/BV (x) Dividend yield (%) ROE (%) Net gearing (%)
FY14 3,149 1,146 0.334 1,146 0.334 11.08 0.320 0.569 FY14 16.33 10.86 9.58 5.87 60.71 cash
FY15 2,963 838 0.122 999 0.146 (56.38) 0.176 0.266 FY15 37.43 12.17 20.45 3.23 44.29 18.75
FY16 2,106 941 0.137 852 0.124 (14.73) 0.110 0.327 FY16 43.90 14.41 16.68 2.02 46.20 5.70
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 3
FY17E 2,890 1,023 0.149 888 0.129 4.03 0.134 0.360 FY17E 36.59 10.92 15.12 2.46 43.36 8.55
FY18E 3,756 1,055 0.154 1,055 0.154 19.38 0.138 0.391 FY18E 35.45 10.32 13.93 2.54 40.92 cash
Figure 1: Summary of SOTP‐based valuation for VGI Business
% Holding
VGI
MACO
37.42
SOTP‐based
Valuation Method
Value to VGI (Bt)
DCF (WACC 8%)
5.00
Tendering price of Bt1.10
0.20
5.20
Source: KT ZMICO Research
Figure 2: VGI’s PER band and sensitivity of market prices based on PER at different standard deviation levels FY17E +1.0SD +0.5SD Average ‐0.5SD ‐1.0SD ‐1.5SD ‐2.0SD ‐2.5SD
(X) 70 +2 S.D.
60 +1 S.D.
50 Avg. 40 30
-1 S.D. 20
-2 S.D.
0
Oct-12 Nov-12 Jan-13 Feb-13 Apr-13 May-13 Jul-13 Aug-13 Oct-13 Nov-13 Jan-14 Feb-14 Apr-14 May-14 Jul-14 Aug-14 Oct-14 Dec-14 Jan-15 Mar-15 Apr-15 Jun-15 Jul-15 Sep-15 Oct-15 Dec-15 Jan-16 Mar-16 Apr-16 Jun-16 Jul-16 Sep-16 Oct-16
10
PER (x) 48.0 43.0 38.0 33.0 28.0 23.0 18.0 13.0
Implied market price (Bt) 7.15 6.41 5.66 4.92 4.17 3.43 2.68 1.94
Upside/Downside vs. current market price (%) 31.2 17.6 3.9 (9.8) (23.4) (37.1) (50.8) (64.5)
Source: Bloomberg, KT ZMICO Research
Figure 3: VGI’s 2QFY17 (Jul‐Sep 16) earnings review Profit and Loss (Btmn) Year‐end 31 Mar Revenue Gross profit SG&A EBITDA Interest expense Other income Income tax Other extra items Gn (Ls) from affiliates Net profit (loss) Normalized profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt/equity (x) BVPS (Bt) ROE (%) Revenue structure BTS‐related Office building & others MACO
2QFY16 537 345 (97) 288 (4) 8 (45) 41 11 259 218 0.038
1QFY17 551 338 (106) 281 (2) 7 (58) 135 4 313 178 0.046
2QFY17 712 438 (187) 326 (4) 11 (52) ‐ 2 198 198 0.029
% YoY 32.6 27.1 92.2 13.3 9.8 35.8 14.4 (100.0) (85.6) (23.6) (9.3) (23.6)
% QoQ 29.3 29.5 75.9 15.9 91.8 65.1 (11.3) (100.0) (55.9) (36.8) 11.1 (36.8)
1HFY17 1,262 777 (294) 607 (6) 17 (110) 135 5 511 376 0.074
% YoY 16.2 14.9 52.1 8.4 (16.6) (20.8) 16.0 58.1 (47.2) 2.5 (9.0) 2.5
64.3 54.4 40.6 0.9 69.7 0.2 0.3 41.3
61.5 51.0 32.4 1.2 114.1 0.2 0.4 29.7 430 66 55
61.6 45.8 27.8 1.1 64.4 0.4 0.3 32.3
61.5 48.1 29.8 1.1 81.4 0.4 0.3 32.8
481 78 153
0.2 36.8 n.m.
11.9 18.2 n.m.
480 57 0
FY17E 2,890 1,778 (588) 1,398 (8) 37 (235) 135 17 1,023 888 0.149
YTD (% of 17E) 43.7 43.7 49.9 43.4 77.0 47.2 46.7 100.0 30.4 50.0 42.3 50.0
61.5 48.4 35.4 0.9 154.3 0.0 0.3 43.4
Source: VGI, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 3
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, PACE, TPOLY, M‐CHAI, TFD, SUTHA. KT ZMICO is a co‐underwriter of ALLA.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 3
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th
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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
th
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.
