Shin Corporation

Free float increases like before 2006. Fair valued revised up to B97 BUY

Shin Corporation Plc (INTUCH)

Cedar makes big-lot sale yesterday's evening at B62.75-63.75 with 6.3%

discount of market

According to Reuters' report, Cedar Holdings Limited which is the 2nd major

shareholder with 23.6percent stake in paid-up share capital of B3,026.42m (par value

at B1), has unloaded 330 million shares or 10.29% of the paid up capital for sale

to both Thai and foreigner investors. While Cedar Holdings is still the 2nd major

shareholder (holding 13.3percent stake), INTUCH's number of free float shares has

increased from 34.8% to 45.1%, thus alleviating the illiquidity problem. The

company's recent liquidity is close the one in the past with high free float of

around 50% before a change in shareholding structure during 2006, therefore

INTUCH has become one of stocks with substantially high liquidity, arousing

attention of institutional investors for both local and foreign ones.

INTUCH's Profit thrives on ADVANC's strength and THCOM's recovery

INTUCH is a holding company mainly investing through ADVANC and THCOM with

40.45% and 41.14% respectively of the total shares. In the past, most part of the

profit was from profit sharing of ADVANC because THCOM had faced continuous

loss. However, THCOM's earnings result has flipped back to profit since 2012 and

is likely to increase gradually due to a sale of the subsidiary MFone (a phone

business in Cambodia) of which THCOM used to face B500m of loss per year. For

iPSTAR sale, it tends to improve especially the deals in China and India which are

projected to be made clear in late-March of 2013. In term of Thaicom 6, it is

about to be launched in mid-2013, generating revenue 2 months afterward.

ADVANC, which is the main source of INTUCH's revenue, is projected to

constantly bring about profit due to the non-voice service that has grown in

keeping with smart phone technology and benefits from the new 3G license (2.1

GHZ) from the NBTC. Accordingly, 3G service would begin in 2Q13 to improve the

service efficiency and to boost customers' usage. Moreover, the company's cost is

likely to decrease continually after migration of customers from the concession to

3G service under the new license because the license fee stands at only 5.75% of

the revenue. In addition, 3G license (lasting for 15 years) fee of around B14.7bn

is considered a lot lower than the current 25% concession of the company's

revenue for TOT. Accordingly, INTUCH's 2013 norm profit is projected to grow by

15%.increasing 54.6%, with the continued growth of 15.5% in 2013.



INTUCH's appeal beats ADVANC for its dividend yield, FV and price ratio

Considering momentums of INTUCH and ADVANC share prices since 2001-

present, ADVANC's share price is higher than INTUCH's. ADVANC/INTUCH price

ratio in 2001-2005 was at 2.7x (the lowest level was 1.95x), while since 2006

until present the price ratio has increased to 3.4x due to effects from lower free

float shares, the government's seizure of INTUCH's subsidiary ITV, and a

continual loss of another subsidiary THCOM. From now on we believe that these

issues would return to normal, so INTUCH's share price might be able to increase

by 2-3x of ADVANC's. Accordingly, the share price would move within a frame of

B67-100/share with 0-49% upside from the market's price. Accordingly, we revise

up fair value of INTUCH from B87 (implying 29.9% upside) with 10% discount to

B97 with (implying 44.8% upside) with 0% discount. Today, the share price

might weaken which would be a good chance for accumulation.