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CS Loxinfo

4Q13: Growth steady, 3.4% 2H13 yield BUY

CS Loxinfo Plc

- 4Q13: EPS Bt0.16, +6% YoY, migration temporarily cut content sales. 4Q13 profit of Bt97mn came primarily from corporate clients for its ICT business (leased-line service, internet data center and ICT solutions). This represents a 7% miss to SCBS because of a temporary blip in its content subscription services as clients migrated to 3G from 2G. The 8% QoQ slip was from seasonally high SG&A. 2H13 DPS of Bt0.35 (3.4% yield, XD 1 Apr and payment 22 Apr) met estimates. Its internet data center, cloud computing and content businesses are expected to grow moderately in 2014F, though yellow pages business continues to drag. We see the dividend yield of 6.86percent for 2013 and 7.06percent for 2014F as attractive and Buy. We do not change our DCF-derived TP of Bt13.

Highlights:

- ICT business (2013 revenue +5.3% YoY): This has been broadened from a narrow focus as an ISP (Internet Service Provider) to offer a wider range of services such as internet data center, cloud computing and ICT solutions service. These non-ISP businesses have been and will continue to grow well.

- Directory business (revenue +23% YoY in 2013): A drag for some years, the company has branched out into more products - "Aroi for Bangkok area", "Aroi for Thailand", "Factory & Builder Guide", "Fashion & Accessories Guide", etc., and this led to some recovery in 2013.

- Content business (revenue +7.5% in 2013): Though this continued to grow, particularly the horoscope/news content and subscription service with ADVANC clients as the major client base, there was a technical and temporary reduction in revenue as ADVANC subscribers migrated to 3G; the drop in consumer spending was also a factor.

- 2013 core profit grew 10% to Bt439mn (EPS Bt0.75) and net profit rose 19% to Bt462mn.




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