VGI Global Media
VGI Global Media Buy (FY16E TP Bt5.20)
Company Update
Close Bt3.74
Media & Publishing January 15, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
Still an outperformer Price Performance (%)
Share price still outperforming compared to market Although the media industry and VGI’s earnings are still weak, VGI’s share price in the previous three months (+3%) has still outperformed the SET (‐11%) owing to the bright prospects in the longer term for out‐ of‐home media, its net cash position in the balance sheet, satisfactory dividend yields, and the expected benefit from additional contracts in the future for both BTS‐related and other media. We still believe VGI’s earnings will improve in FY17E owing to improvement of the economy and consumption. We thus maintain our BUY call for VGI with the SOTP‐ based TP of Bt5.20/share. FMCG ad spending portion (to total industry) declined in 4Q15 Nielsen reported 2015 advertising spending of Bt122.3bn, increasing by 3% YoY, owing mainly to the inclusion of ad spending via Cable TV and Digital TV starting from 1Q14 and 2Q14, respectively. In 4Q15 alone, Nielsen reported advertising spending of Bt30.7bn, ‐5% YoY and ‐4% QoQ, owing to the continued sluggishness of the domestic economy and private consumption. Meanwhile, according to VGI, the portion of ad spending from FMCG (Fast‐moving consumer goods) fell to 35% of the total ad industry in 4Q15, vs. 42% in 3Q15.
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.130
0.149
KT ZMICO vs. consensus Share data
8.5%
0.0%
Reuters / Bloomberg
VGI.BK/VGI TB
Paid‐up Shares (m)
6,864.32
Par (Bt)
0.10
Market cap (Bt bn / US$ m) Foreign limit / actual (%)
26.00/707.00 49.00/6.49
52 week High / Low (Bt)
6.65/3.44
Avg. daily T/O (shares 000)
15,198.00
NVDR (%)
2.12
Estimated free float (%)
29.47
Beta
0.96
URL
www.vgi.co.th
CGR
Anti‐corruption
Level 3A (Established)
Raenoo Bhandasukdi Analyst no. 17989 [email protected] 66 (0) 2695‐5836
Expect norm. profit in 3QFY16E to continue declining YoY According to Nielsen, ad spending via transit grew by 4% YoY to Bt1.1bn in 4Q15. However, as the major source of VGI’s BTS‐related ad revenue came from FMCG, we expect this revenue to decline (expect ‐4% YoY) in 3QFY16E (Oct‐Dec 15). Nevertheless, revenue from office buildings and other media is likely to jump (expect +32% YoY) owing mainly to the increase in the number of buildings (to 118 vs. 103 in 3QFY15). In all, we expect VGI to report revenue of Bt538mn in the quarter, falling by 32% YoY (mainly from the absence of modern trade revenue). As such, VGI’s norm. profit is still likely to decline to Bt221mn in 3QFY16E, ‐11% YoY and flat QoQ. Retain earnings projections in FY16‐17E Our norm. profit estimates in 9MFY16E are likely to contribute around 72% of our full‐year projection. We thus maintain our norm. profit estimates in FY16‐17E for VGI. 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 (%)
FY13 2,838 902 0.301 902 0.301 8.01 0.270 0.607 FY13 12.44 7.97 6.16 7.22 85.30 cash
FY14 3,149 1,146 0.334 1,146 0.334 11.08 0.320 0.569 FY14 11.20 7.34 6.57 8.56 60.71 cash
FY15 2,963 999 0.122 838 0.146 (56.38) 0.176 0.266 FY15 30.65 8.43 14.04 4.71 44.29 18.75
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
FY16E 2,191 970 0.141 885 0.129 (11.44) 0.116 0.262 FY16E 26.45 9.42 14.29 3.10 53.53 16.14
FY17E 2,378 1,023 0.149 1,023 0.149 15.64 0.134 0.292 FY17E 25.08 8.11 12.83 3.59 53.88 3.38
Figure 1: Summary of SOTP‐based valuation for VGI Business
% Holding
VGI
MACO
24.96
SOTP‐based
Valuation Method
Value to VGI (Bt)*
DCF (WACC 8%)
5.00
Consensus target price of Bt1.60
0.20
5.20
Source: KT ZMICO Research, Note: *not including shares reserved for VGI‐W1
Figure 2: VGI’s PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 70 +2 S.D.
60 +1 S.D.
50 Avg. 40 30
-1 S.D. 20
-2 S.D.
Oct-15
Sep-15
Jun-15
Aug-15
Mar-15
May-15
Jan-15
Feb-15
Oct-14
Nov-14
Jul-14
Sep-14
Jun-14
Mar-14
May-14
Jan-14
Feb-14
Nov-13
Jul-13
Oct-13
Sep-13
Jun-13
Mar-13
May-13
Feb-13
Dec-12
Oct-12
0
Nov-12
10
FY16E +1.0SD +0.5SD Average ‐0.5SD ‐1.0SD ‐1.5SD ‐2.0SD ‐2.5SD
PER (x) 48.0 43.0 38.0 33.0 28.0 23.0 18.0 13.0
Implied market price (Bt) 6.77 6.06 5.36 4.65 3.95 3.24 2.54 1.83
Upside/Downside vs. current market price (%) 81.0 62.1 43.3 24.4 5.6 (13.3) (32.1) (51.0)
Source: Bloomberg, KT ZMICO Research
Figure 3: VGI’s 3QFY16E (Oct‐Dec 15) earnings preview 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 Modern Trade Office building & others
3QFY15 789 422 (119) 346 (2) 15 (73) 53 4 301 248 0.088
2QFY16 537 345 (97) 288 (4) 8 (45) 41 11 259 218 0.038
3QFY16E 538 346 (81) 310 (4) 7 (55) ‐ 8 221 221 0.032
% YoY (31.9) (18.1) (32.2) (10.5) 130.1 (49.6) (23.8) (100.0) 80.6 (26.5) (10.8) (63.3)
% QoQ 0.2 0.2 (17.2) 7.8 12.5 (8.2) 22.6 (100.0) (28.7) (14.7) 1.3 (14.7)
9MFY16E 1,624 1,019 (271) 870 (11) 29 (150) 86 18 720 634 0.105
53.5 43.9 31.4 1.3 174.3 0.1 0.7 45.5
64.3 53.6 40.6 0.9 69.7 0.2 0.3 41.3 480 0 57
64.3 57.6 41.1
62.8 53.6 39.1
474 0 64
(4.0) 32.3
(1.3) 12.1
494 247 48
% YoY (30.8) (20.2) (22.9) (16.1) 77.5 (25.6) (24.9) 60.8 69.2 (12.5) (17.5) (56.2)
FY16E 2,191 1,407 (357) 1,222 (14) 37 (214) 86 26 970 885 0.141 64.2 55.8 44.3 0.7 75.0 0.3 0.3 48.8
Source: VGI, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
YTD (% of FY16E) 74.1 72.4 75.9 71.2 79.4 78.9 69.9 100.0 69.1 74.2 71.7 74.2
Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Equity earnings Other income / exp. EBT Corporate tax 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 Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) Core EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%) FINANCIAL QUALITY Total debt to capital employed (x) Net debt to equity (x) Interest coverage (x)
FY12 1,977 (1,295) 682 (282) 495 (95) 400 (1) 0 27 427 (148) (0) 278 0.28 0.28 278 0.28 0.40
FY13 2,838 (1,289) 1,548 (394) 1,250 (95) 1,155 (2) 0 34 1,187 (285) 0 902 0.301 0.301 902 0.301 0.270
FY14 3,149 (1,342) 1,807 (434) 1,459 (86) 1,374 (1) (1) 47 1,419 (273) 0 1,146 0.334 0.334 1,146 0.334 0.320
FY15 2,963 (1,325) 1,638 (419) 1,372 (153) 1,219 (10) 15 (115) 1,109 (272) 0 838 0.122 0.122 999 0.146 0.176
FY12 381 0 228 705 1,314 0 0 1,021 0 293 1,314
FY13 1,254 0 473 852 2,579 0 0 758 0 1,821 2,579
FY14 503 0 923 1,315 2,741 0 0 788 0 1,953 2,741
FY15 187 4 1,262 1,833 3,286 530 0 1,457 0 1,829 3,286
FY12 278 95 (47) 16 343 (69) 11 (59) (1) 0 (400) 0 (401) (117) 284 0.28
FY13 902 95 (437) 0 560 (321) 17 (304) 0 1,058 (440) 0 618 873 255 0.09
FY14 1,146 86 60 0 1,292 (570) (459) (1,029) 1 0 (1,014) 0 (1,013) (750) 262 0.08
FY15 838 153 79 0 1,070 (600) (354) (954) 189 344 (965) 0 (432) (316) 116 0.02
FY12 41.1 47.0 60.7 34.5 25.0 20.2 14.1 14.1 34.7
FY13 43.5 152.6 8.0 54.6 44.0 40.7 31.8 31.8 24.0
FY14 11.0 16.7 11.1 57.4 46.3 43.6 36.4 36.4 19.2
FY15 (5.9) (6.0) (56.4) 55.3 46.3 41.1 28.3 33.7 24.5
FY12 0.00 cash cash
FY13 0.00 cash cash
FY14 0.00 cash cash
FY15 0.22 cash cash
FY16E 2,191 (783) 1,407 (357) 1,222 (172) 1,050 (14) 26 123 1,185 (214) 0 970 0.141 0.141 885 0.129 0.116
FY17E 2,378 (806) 1,571 (364) 1,391 (184) 1,208 0 31 40 1,279 (256) 0 1,023 0.149 0.149 1,023 0.149 0.134
FY16E 240 4 1,337 1,724 3,305 530 0 1,507 0 1,797 3,304
FY17E 462 4 1,303 1,760 3,529 530 0 1,528 0 2,002 3,529
FY16E 970 172 181 0 1,324 (268) 0 (268) 0 0 (1,003) 0 (1,003) 53 1,056 0.15
FY17E 1,023 184 86 0 1,293 (150) 0 (150) 0 0 (921) 0 (921) 222 1,143 0.17
FY16E (26.1) (10.9) (11.5) 64.2 55.8 47.9 44.3 40.4 18.1
FY17E 8.5 13.8 15.6 66.1 58.5 50.8 43.0 43.0 20.0
FY16E 0.23 cash cash
FY17E 0.21 cash cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO is a partnership between KTB and ZMICO. 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. 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, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, TFG. KT ZMICO is a co‐underwriter of TKN.
Anti‐corruption Progress Indicator
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
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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
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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
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.
Company Update
Close Bt3.74
Media & Publishing January 15, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
Still an outperformer Price Performance (%)
Share price still outperforming compared to market Although the media industry and VGI’s earnings are still weak, VGI’s share price in the previous three months (+3%) has still outperformed the SET (‐11%) owing to the bright prospects in the longer term for out‐ of‐home media, its net cash position in the balance sheet, satisfactory dividend yields, and the expected benefit from additional contracts in the future for both BTS‐related and other media. We still believe VGI’s earnings will improve in FY17E owing to improvement of the economy and consumption. We thus maintain our BUY call for VGI with the SOTP‐ based TP of Bt5.20/share. FMCG ad spending portion (to total industry) declined in 4Q15 Nielsen reported 2015 advertising spending of Bt122.3bn, increasing by 3% YoY, owing mainly to the inclusion of ad spending via Cable TV and Digital TV starting from 1Q14 and 2Q14, respectively. In 4Q15 alone, Nielsen reported advertising spending of Bt30.7bn, ‐5% YoY and ‐4% QoQ, owing to the continued sluggishness of the domestic economy and private consumption. Meanwhile, according to VGI, the portion of ad spending from FMCG (Fast‐moving consumer goods) fell to 35% of the total ad industry in 4Q15, vs. 42% in 3Q15.
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
0.130
0.149
KT ZMICO vs. consensus Share data
8.5%
0.0%
Reuters / Bloomberg
VGI.BK/VGI TB
Paid‐up Shares (m)
6,864.32
Par (Bt)
0.10
Market cap (Bt bn / US$ m) Foreign limit / actual (%)
26.00/707.00 49.00/6.49
52 week High / Low (Bt)
6.65/3.44
Avg. daily T/O (shares 000)
15,198.00
NVDR (%)
2.12
Estimated free float (%)
29.47
Beta
0.96
URL
www.vgi.co.th
CGR
Anti‐corruption
Level 3A (Established)
Raenoo Bhandasukdi Analyst no. 17989 [email protected] 66 (0) 2695‐5836
Expect norm. profit in 3QFY16E to continue declining YoY According to Nielsen, ad spending via transit grew by 4% YoY to Bt1.1bn in 4Q15. However, as the major source of VGI’s BTS‐related ad revenue came from FMCG, we expect this revenue to decline (expect ‐4% YoY) in 3QFY16E (Oct‐Dec 15). Nevertheless, revenue from office buildings and other media is likely to jump (expect +32% YoY) owing mainly to the increase in the number of buildings (to 118 vs. 103 in 3QFY15). In all, we expect VGI to report revenue of Bt538mn in the quarter, falling by 32% YoY (mainly from the absence of modern trade revenue). As such, VGI’s norm. profit is still likely to decline to Bt221mn in 3QFY16E, ‐11% YoY and flat QoQ. Retain earnings projections in FY16‐17E Our norm. profit estimates in 9MFY16E are likely to contribute around 72% of our full‐year projection. We thus maintain our norm. profit estimates in FY16‐17E for VGI. 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 (%)
FY13 2,838 902 0.301 902 0.301 8.01 0.270 0.607 FY13 12.44 7.97 6.16 7.22 85.30 cash
FY14 3,149 1,146 0.334 1,146 0.334 11.08 0.320 0.569 FY14 11.20 7.34 6.57 8.56 60.71 cash
FY15 2,963 999 0.122 838 0.146 (56.38) 0.176 0.266 FY15 30.65 8.43 14.04 4.71 44.29 18.75
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
FY16E 2,191 970 0.141 885 0.129 (11.44) 0.116 0.262 FY16E 26.45 9.42 14.29 3.10 53.53 16.14
FY17E 2,378 1,023 0.149 1,023 0.149 15.64 0.134 0.292 FY17E 25.08 8.11 12.83 3.59 53.88 3.38
Figure 1: Summary of SOTP‐based valuation for VGI Business
% Holding
VGI
MACO
24.96
SOTP‐based
Valuation Method
Value to VGI (Bt)*
DCF (WACC 8%)
5.00
Consensus target price of Bt1.60
0.20
5.20
Source: KT ZMICO Research, Note: *not including shares reserved for VGI‐W1
Figure 2: VGI’s PER band and sensitivity of market prices based on PER at different standard deviation levels (X) 70 +2 S.D.
60 +1 S.D.
50 Avg. 40 30
-1 S.D. 20
-2 S.D.
Oct-15
Sep-15
Jun-15
Aug-15
Mar-15
May-15
Jan-15
Feb-15
Oct-14
Nov-14
Jul-14
Sep-14
Jun-14
Mar-14
May-14
Jan-14
Feb-14
Nov-13
Jul-13
Oct-13
Sep-13
Jun-13
Mar-13
May-13
Feb-13
Dec-12
Oct-12
0
Nov-12
10
FY16E +1.0SD +0.5SD Average ‐0.5SD ‐1.0SD ‐1.5SD ‐2.0SD ‐2.5SD
PER (x) 48.0 43.0 38.0 33.0 28.0 23.0 18.0 13.0
Implied market price (Bt) 6.77 6.06 5.36 4.65 3.95 3.24 2.54 1.83
Upside/Downside vs. current market price (%) 81.0 62.1 43.3 24.4 5.6 (13.3) (32.1) (51.0)
Source: Bloomberg, KT ZMICO Research
Figure 3: VGI’s 3QFY16E (Oct‐Dec 15) earnings preview 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 Modern Trade Office building & others
3QFY15 789 422 (119) 346 (2) 15 (73) 53 4 301 248 0.088
2QFY16 537 345 (97) 288 (4) 8 (45) 41 11 259 218 0.038
3QFY16E 538 346 (81) 310 (4) 7 (55) ‐ 8 221 221 0.032
% YoY (31.9) (18.1) (32.2) (10.5) 130.1 (49.6) (23.8) (100.0) 80.6 (26.5) (10.8) (63.3)
% QoQ 0.2 0.2 (17.2) 7.8 12.5 (8.2) 22.6 (100.0) (28.7) (14.7) 1.3 (14.7)
9MFY16E 1,624 1,019 (271) 870 (11) 29 (150) 86 18 720 634 0.105
53.5 43.9 31.4 1.3 174.3 0.1 0.7 45.5
64.3 53.6 40.6 0.9 69.7 0.2 0.3 41.3 480 0 57
64.3 57.6 41.1
62.8 53.6 39.1
474 0 64
(4.0) 32.3
(1.3) 12.1
494 247 48
% YoY (30.8) (20.2) (22.9) (16.1) 77.5 (25.6) (24.9) 60.8 69.2 (12.5) (17.5) (56.2)
FY16E 2,191 1,407 (357) 1,222 (14) 37 (214) 86 26 970 885 0.141 64.2 55.8 44.3 0.7 75.0 0.3 0.3 48.8
Source: VGI, KT ZMICO Research
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YTD (% of FY16E) 74.1 72.4 75.9 71.2 79.4 78.9 69.9 100.0 69.1 74.2 71.7 74.2
Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Equity earnings Other income / exp. EBT Corporate tax 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 Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) Core EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%) FINANCIAL QUALITY Total debt to capital employed (x) Net debt to equity (x) Interest coverage (x)
FY12 1,977 (1,295) 682 (282) 495 (95) 400 (1) 0 27 427 (148) (0) 278 0.28 0.28 278 0.28 0.40
FY13 2,838 (1,289) 1,548 (394) 1,250 (95) 1,155 (2) 0 34 1,187 (285) 0 902 0.301 0.301 902 0.301 0.270
FY14 3,149 (1,342) 1,807 (434) 1,459 (86) 1,374 (1) (1) 47 1,419 (273) 0 1,146 0.334 0.334 1,146 0.334 0.320
FY15 2,963 (1,325) 1,638 (419) 1,372 (153) 1,219 (10) 15 (115) 1,109 (272) 0 838 0.122 0.122 999 0.146 0.176
FY12 381 0 228 705 1,314 0 0 1,021 0 293 1,314
FY13 1,254 0 473 852 2,579 0 0 758 0 1,821 2,579
FY14 503 0 923 1,315 2,741 0 0 788 0 1,953 2,741
FY15 187 4 1,262 1,833 3,286 530 0 1,457 0 1,829 3,286
FY12 278 95 (47) 16 343 (69) 11 (59) (1) 0 (400) 0 (401) (117) 284 0.28
FY13 902 95 (437) 0 560 (321) 17 (304) 0 1,058 (440) 0 618 873 255 0.09
FY14 1,146 86 60 0 1,292 (570) (459) (1,029) 1 0 (1,014) 0 (1,013) (750) 262 0.08
FY15 838 153 79 0 1,070 (600) (354) (954) 189 344 (965) 0 (432) (316) 116 0.02
FY12 41.1 47.0 60.7 34.5 25.0 20.2 14.1 14.1 34.7
FY13 43.5 152.6 8.0 54.6 44.0 40.7 31.8 31.8 24.0
FY14 11.0 16.7 11.1 57.4 46.3 43.6 36.4 36.4 19.2
FY15 (5.9) (6.0) (56.4) 55.3 46.3 41.1 28.3 33.7 24.5
FY12 0.00 cash cash
FY13 0.00 cash cash
FY14 0.00 cash cash
FY15 0.22 cash cash
FY16E 2,191 (783) 1,407 (357) 1,222 (172) 1,050 (14) 26 123 1,185 (214) 0 970 0.141 0.141 885 0.129 0.116
FY17E 2,378 (806) 1,571 (364) 1,391 (184) 1,208 0 31 40 1,279 (256) 0 1,023 0.149 0.149 1,023 0.149 0.134
FY16E 240 4 1,337 1,724 3,305 530 0 1,507 0 1,797 3,304
FY17E 462 4 1,303 1,760 3,529 530 0 1,528 0 2,002 3,529
FY16E 970 172 181 0 1,324 (268) 0 (268) 0 0 (1,003) 0 (1,003) 53 1,056 0.15
FY17E 1,023 184 86 0 1,293 (150) 0 (150) 0 0 (921) 0 (921) 222 1,143 0.17
FY16E (26.1) (10.9) (11.5) 64.2 55.8 47.9 44.3 40.4 18.1
FY17E 8.5 13.8 15.6 66.1 58.5 50.8 43.0 43.0 20.0
FY16E 0.23 cash cash
FY17E 0.21 cash cash
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
Note: KT ZMICO is a partnership between KTB and ZMICO. 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. 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, SUTHA, ZMICO, MAKRO, CPALL, SAFARI, PACE, PLE, TPOLY, TFG. KT ZMICO is a co‐underwriter of TKN.
Anti‐corruption Progress Indicator
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 BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market returns over a six‐month period due to specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to be below market returns over a six‐month period due to specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
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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.
