Securities house: DBS Vickers Securities (Thailand)

Advanced Info Service's 2006 capital expenditure estimate has been raised from between US$350 million (Bt13.3 billion) and $400 million to between $400 million and $450 million, to support an expected rise in traffic because of tariff reductions.

Thailand's largest mobile-phone service provider saw softer net subscriber additions from February to April due to aggressive packages launched by Total Access Communication Plc (DTAC) and True Move, and the boycott campaign against caretaker Prime Minister Thaksin Shinawatra.

However, it has maintained its target of 1.2 million net additional subscribers, implying that it may launch aggressive pricing packages later this year.

Due to the currently aggressive marketing packages and expectations of more later this year, post-paid average revenue per user (ARPU) may soften slightly, while prepaid ARPU should remain flat. As a result, AIS has lowered its post-paid and prepaid ARPU growth expectations from flat year on year and a 2 per cent rise, to a 5 per cent fall and flat this year, respectively.

The broker has lowered its earnings forecasts by 8 per cent this year and by 10 per cent next year and has also lowered its target price for the stock from Bt130 to Bt125.

Stock: Siam Cement Plc (SCC)

Recommendation: Buy

Securities house: Seamico Securities

The brokerage expects Siam Cements' first quarter performance will improve slightly quarter on quarter due to the performance of the petrochemical unit, Rayong Olefins, which began operating at full capacity after a 40-day plant shutdown. It forecasts an increase in Siam Cement's sales and earnings before interest, tax, depreciation and amortisation by 11 per cent quarter the quarter and 26 per cent quarter on quarter, to Bt56.4 billion and Bt10.7 billion, respectively.

As a result of Siam Cement's increased holding in Thai Plastic and Chemicals Plc (TPC) (from 40 per cent in 2004 to 43 per cent in 2005) and Thai British Security Printing Plc (TBSP) (from 49 per cent to 50 per cent), it began to fully consolidate the firms in the first quarter. As a consequence Siam Cement's consolidated assets increased by 11 per cent, or Bt21 billion.

It also increased its holding in Bangkok Synthetics (BST) from 17.5 per cent to 21 per cent, and as a result will realise equity income from the first quarter onward.

The broker has raised its fair value estimate for the stock to Bt285.

Stock: MK Real Estate Plc (MK)

Recommendation: Buy

Securities house: Kim Eng Securities (Thailand)

The broker is more positive about MK Real Estate after meeting with management, given resilient presales and the firm's ability to maintain high gross margins.

It has raised its fair value estimate for the stock to Bt3.50.

Despite weaker market sentiment arising from the political turmoil, as well as this being the low sales season, MK's performance remains resilient with total presales of Bt600 million in the first quarter.

The strong sales performance came from the firm's position in the low-end to medium segments of the market, which still show strong demand. Meanwhile, the company should be able to adjust its prices to reflect rising construction costs and thus retain its gross profit margin at more than 40 per cent.

The broker expects MK to post weak first quarter normalised earnings of Bt28 million, a fall of 92 per cent year on year and 69 per cent quarter on quarter, due to low revenue. This quarter, the company expects revenue of between Bt500 million and Bt600 million.

The broker has maintained its full-year revenue and earnings forecasts at Bt2.51 billion and Bt508 million, respectively.