Thaicom

2012A: Mfone sliced off, back to profit BUY

Thaicom Plc

2012A: Bt838mn after separating discontinued operations and other extras. THCOM announced its 2012A results, in which it has excluded Mfone, the loss making telephony business in Cambodia that has filed for bankruptcy. Excluding the net loss contribution from Mfone and other extras, THCOM's core earnings turn up into the black at Bt838mn in 2012A after six years of losses. However, this adjustment in 2012A makes it impossible to compare 4Q12A with other quarters. Providing growth was both its conventional satellites (via Thaicom 5) and iPSTAR. The picture for THCOM has turned rosy, and we expect 2013F to be THCOM's year with strong earnings growth to Bt1.24bn, bolstered by the absence of loss-making Mfone, strong growth in iPSTAR (with a Framework Agreement to sell all bandwidth in China) and the launch of Thaicom 6 in mid-2013. We Buy with an unchanged SOTP of Bt29.

Highlights

Conventional satellite service (on Thaicom 5) continued to grow, reaching 465 TV channels as of 2012A from 427 at the end of 2011. Revenue from this segment rose 11% YoY to Bt6.3bn.

iPSTAR service revenue rose 17% YoY to Bt3.4bn, with growth in Australia, Japan, Malaysia, India, Myanmar and New Zealand.

THCOM separated out the net loss of Bt508mn from Mfone, now classified as "discontinued operations" after filing for bankruptcy last month.

It announced a Bt0.40 DPS for 2012A, XD on Apr 2, the first dividend for eight years