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THAILAND EQUITY RESEARCH
Page | 1 | PHILLIP SECURITIES (THAILAND)
Closing Price(Bt) 29.50
Target Price(Bt) 31.00 (+9.93%)
COMPANY DATA
O/S Shares (mn) : 2,000
Market Cap. (Btmn) :
Market Cap. (USDmn) :
52‐WK Hi/Lo (Bt) : 55.75/28
3M Average Daily T/O (mn) : 1.56
Par Value (Bt) : 1.00
MAJOR SHAREHOLDERS (%)
1. Maleenon Family 47.0
2. Chase Nominees Ltd. 42 12.2
3. Thai NVDR Co., Ltd. 5.3
PRICE PERFORMANCE (%)
1MTH 3MTH 1YR
ABS ‐3% ‐12% ‐39%
REL TO SET INDEX ‐2% ‐1% ‐24%
PRICE VS SET INDEX
Source: Bloomberg, PSR
KEY FINANCIALS
FYE Dec FY13 FY14 FY15E FY16E
Sales(Btmn) 16,429 16,167 15,990 16,420
Net Profit(Btmn) 5,590 4,415 3,019 3,171
EPS (Bt) 2.79 2.21 1.51 1.59
P/E (X) 10.6 13.3 19.5 18.6
BVPS (Bt) 4.56 4.32 4.14 4.33
P/B (X) 6.5 6.8 7.1 6.8
DPS (Bt) 2.60 2.10 1.40 1.43
Dividend Yield (%) 8.8 7.1 4.7 4.8
ROE (%) 64.40 49.71 35.66 37.41
Source: Company, PSR Est.
**Multiples and yields are based on latest closing price
VALUATION METHOD
DCF (WACC: 9.75%, terminal g: 2%)
Siam Tiyanont
Securities Investment Analyst #17970
Tel: 66 2 635 1700 # 483
59,000
1,638
21 August 2015
Accumulate (Upgraded from Sell)
26 January 2016
0
20
40
60
80
Jan‐13 Jan‐14 Jan‐15 Jan‐16
BEC TB EQUITY SETI (rebased)
BEC World
4QFY15 net profit seen down 29.4% y‐y
THAILAND | SET | MEDIA | COMPANY PREVIEW BLOOMBERG BEC TB l REUTERS BEC.BK
4QFY15 net profit to fall 29.4% y‐y on lower ad revenue and high expense Nielsen Thailand reported domestic economic sluggishness was a major drag on the country’s ad expenditure with ad spending through Channel 3 falling 12.3% y‐y and 2.4% q‐q in the fourth quarter. Its viewership deceased from 26.6% around early 2015 to 25.2% in December but audience rating was on par with the early year level at 1.88. We expect 4QFY15 net profit to decline 29.4% y‐y to Bt709mn, assuming sales and service revenue will fall 6.1% y‐y but remain flat q‐q to Bt3,881mn, other revenue (including interest income which seemingly declined along with lower cash) will drop 56.5% y‐y, and total cost and SG&A expense will stay level y‐y. Breaking down sales and service revenue, ad revenue would stay flay y‐y but fall 7.2% q‐q; show/concert revenue would fall y‐y despite nine concerts were held in the quarter, as BEC will have recorded the share of profit, instead of consolidated income basis, after a structural change in international show/concert organizing since 3QFY15; and revenue from its copyrights and sales are expected to grow. For full‐year basis, we expect FY15 net profit of Bt3,019mn (better than our previously estimated Bt2,838mn) on estimated revenue of Bt15,990mn, which would be in line with our forecast. We expect BEC to pay an interim dividend of Bt0.70 for 2HFY15 performance (FY15 DPS of Bt1.40). FY16 ad expenditure likely to recover; the pace seems modest on intense competition in digital TV, NBTC move to resolve digital TV headwinds would be positive for digital TV business Chairman of Advertising Association of Thailand (AAT) has forecast a 5% growth in the country’s 2016 ad expenditure, based on projected GDP growth of 3.5%‐4%. The modest growth outlook can blame the world’s economic growth slowdown that could put a dent on domestic GDP growth, likewise 2015. Furthermore, an intensifying competition among digital TV broadcasters with many of which have earmarked high capex to build up contents to raise their audience rating, thereby grabbing more share of advertising cake. NBTC has set up a working committee to figure out the 10 issues proposed by digital TV broadcasters, such as a delay of the third installment of auction fees (due in May 2016), an extension of the digital TV channel license from 15 years, a termination of digital TV business with no obligations to pay the remaining auction fees, a reduction for USO fee from 2% of total revenue per annum, financial assistance to support audience rating expense. Positive responses to those requests will likely benefit Thailand’s digital TV industry, which is expected to conclude by end‐February. Business termination by some digital TV broadcaster would be a boon to the industry, in terms of fewer players. FY16 earnings projection unchanged with target price of Bt31, ‘ACCUMULATE’ rating upgraded as a drastic drop in share prices offers decent upside We keep our FY16 revenue and net profit forecast unchanged at Bt16,420mn and Bt3,171mn. There is scope for projection revision if we learn more information and 2016 business plan at the analyst meeting. Using DCF (WACC of 9.75% and terminal growth rate of 2%), our FY16 target price is Bt31. Overly concern over weak earnings performance pushed BEC shares significantly lower, which in turn provides a decent upside to target price. We thus upgrade our rating from ‘SELL’ to ‘ACCUMULATE’ stance.
Ref. No.: CO2016_0066
THAILAND EQUITY RESEARCH
PHILLIP SECURITIESS (THAILAND) | 2 | P a g e
Corporate Governance ‐2015
ADVANC BAFS BCP BIGC BTS CK CPN DRT DTAC DTC
EASTW EGCO GRAMMY HANA HMPRO INTUCH IRPC IVL KBANK KCE
KKP KTB LHBANK LPN MCOT MINT MONO NKI PHOL PPS
PS PSL PTT PTTEP PTTGC QTC RATCH ROBINS SAMART SAMTEL
SAT SC SCB SCC SE‐ED SIM SNC SPALI THCOM TISCO
TKT TMB TOP VGI WACOAL
AAV ACAP AGE AHC AKP AMATA ANAN AOT APCS ARIP
ASIMAR ASK ASP BANPU BAY BBL BDMS BECL BKI BLA
BMCL BOL BROOK BWG CENTEL CFRESH CHO CIMBT CM CNT
COL CPF CPI CSL DCC DELTA DEMCO ECF EE ERW
GBX GC GFPT GLOBAL GUNKUL HEMRAJ HOTPOT HYDRO ICC ICHI
INET IRC KSL KTC LANNA LH LOXLEY LRH MACO MBK
MC MEGA MFEC NBC NCH NINE NSI NTV OCC OGC
OISHI OTO PAP PDI PE PG PJW PM PPP PR
PRANDA PREB PT PTG Q‐CON QH RS S & J SABINA SAMCO
SCG SEAFCO SFP SIAM SINGER SIS SITHAI SMK SMPC SMT
SNP SPI SSF SSI SSSC SST STA STEC SVI SWC
SYMC SYNTEC TASCO TBSP TCAP TF TGCI THAI THANA THANI
THIP THRE THREL TICON TIP TIPCO TK TKS TMI TMILL
TMT TNDT TNITY TNL TOG TPC TPCORP TRC TRU TRUE
TSC TSTE TSTH TTA TTCL TTW TU TVD TVO TWFP
TWS UAC UT UV VNT WAVE WINNER YUASA ZMICO
2S AEC AEONTS AF AH AIRA AIT AJ AKR AMANAH
AMARIN AP APCO AQUA AS ASIA AUCT AYUD BA BEAUTY
BEC BFIT BH BIG BJC BJCHI BKD BTNC CBG CGD
CHG CHOW CI CITY CKP CNS CPALL CPL CSC CSP
CSS CTW DNA EARTH EASON ECL EFORL ESSO FE FIRE
FOCUS FORTH FPI FSMART FSS FVC GCAP GENCO GL GLAND
GLOW GOLD GYT HTC HTECH IEC IFEC IFS IHL IRCP
ITD JSP JTS JUBILE KASET KBS KCAR KGI KKC KTIS
KWC KYE L&E LALIN LHK LIT LIVE LST M MAJOR
MAKRO MATCH MATI MBKET M‐CHAI MFC MILL MJD MK MODERN
MOONG MPG MSC MTI MTLS NC NOK NUSA NWR NYT
OCEAN PACE PATO PB PCA PCSGH PDG PF PICO PL
PLANB PLAT PPM PRG PRIN PSTC PTL PYLON QLT RCI
RCL RICHY RML RPC S SALEE SAPPE SAWAD SCCC SCN
SCP SEAOIL SIRI SKR SMG SOLAR SORKON SPA SPC SPCG
SPPT SPVI SRICHA SSC STANLY STPI SUC SUSCO SUTHA SYNEX
TAE TAKUNI TCC TCCC TCJ TEAM TFD TFI TIC TIW
TLUXE TMC TMD TOPP TPCH TPIPL TRT TSE TSR UMI
UP UPF UPOIC UREKA UWC VIBHA VIH VPO WHA WIN
XO
Score Range
< 50%
50‐59%
60‐69%
70‐79%
80‐89%
90‐100%
The disclosure of the survey result of the Thai Institute of Directors Association (IOD)
regarding corporate governance is made pursuant to the Office of the Securities and
Exchange Commission. The survey of the IOD is based on the information of a company
l isted on the Stock Exchange of Thailand and the Market for Alternative disclosure to the
public and able to be accessed by a general public investor. The results, therefore, is from
the perspective of a third party. It is not an evaluation of operation and is not based on
inside information.
The survey result is as of the date appearing in the Corporate Governance Report of Thai
Listed Companies. As a result, the survey result may be changed after that data. Phil l ip
Securities (Thailand) of securities company does not confirm nor certify the accuracy of
such survey result.
No logo given
Number of Logo
Results Presentation
THAILAND EQUITY RESEARCH
PHILLIP SECURITIESS (THAILAND) | 3 | P a g e
Industry Group Name Sector Name Sector Index
Agro & Food Industry[AGRO] Agribusiness AGRI
Food & Beverage FOOD
Consumer Products[CONSUMP] Fashion FASHION
Home & Office Products HOME
Personal Products & Pharmaceuticals PERSON
Financials [FINCIAL] Banking BANK
Finance & Securities FIN
Insurance INSUR
Industrials [INDUS] Automotive AUTO
Industrial Materials & Machinery IMM
Packaging PKG
Paper & Printing Materials PAPER
Petrochemicals & Chemicals PETRO
Steel STEEL
Property & Construction[PROPCON] Construction Materials CONMAT
Construction Services CONS
Property Development PROP
Property Fund & REITs PF&REIT
Resources [RESOURC] Energy & Util ities ENERG
Mining MINE
Services [SERVICE] Commerce COMM
Media & Publishing MEDIA
Health Care Services HELTH
Tourism & Leisure TOURISM
Professional Services PROF
Transportation & Logistics TRANS
Technology [TECH] Electronic Components ETRON
Information & Communication Technology ICT
PSR Rating SystemCapital Gain Recommendation
> 15% BUY
> 5% ‐ 15% ACCUMULATE / TRADING BUY
> 0% ‐ 5% NEUTRAL
0 <= SELL
Remarks
We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors l ike (but
not l imited to) a stock's risk reward profi le, market sentiment, recent rate of share price appreciation, presence or absence of
stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation
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