4Q13F: Core +50% YoY but Bt190mn unrealized loss from FX. Backed by the growth of iPSTAR in China, Thailand, Australia and Malaysia and by Thaicom 5, enjoying high
demand for satellite TV, plus benefit from the baht weakness as most of its revenue is
in dollars, THCOM’s core profit is expected to jump 50% YoY to Bt372mn. However, the
weaker baht is not good for its US$130mn loan and we thus estimate Bt191mn
unrealized FX loss that will slash 4Q13F net profit to Bt181mn.
Trim 2013F by 6%, 2014F by 13% on slower Thaicom 6 earnings. Thaicom 6 was
successfully launched on Jan 6 and is expected to be operation within 3-4 weeks.
According to THCOM IR, the company needs 4-5 months to ramp up all transponders
that were pre-booked (66% utilization). We also adjust our profit breakeven level to
50% utilization from 30% in response to the company’s adjustment in its depreciation
to ~8 years (based on concession life) from 15 years (based on satellite useful life). The
changed ramp up speed and higher annual depreciation from the shorter period lead
us to revise down our 2013F by 6% and 2014 by 13%. Material earnings contribution
from Thaicom 6 is moved to 3Q14F from the previous expectation of late-2013.
… but growth still outstanding at 63% in 2013 and 40% in 2014F. Despite the
adjustment in our forecast, growth is still expected to be a very strong 63% in 2013F
and 40% in 2014F, underwritten by growth in iPSTAR – where revenue from China
started in Nov 2013 plus the minimum guaranteed revenue of US$8mn in 2014F – plus
its conventional satellite businesses (Thaicom 5 and Thaicom 6).
2013F DPS of Bt0.6, 1.67% yield. After resuming dividend payment in 2012, we expect
THCOM to pay a DPS of Bt0.60 on 2013F, implying 1.67% yield. Dividend is expected to be
announced on Feb 13 (with the earnings announcement) with XD in early April and
payment in late April.
Maintain Buy despite TP trimmed to Bt42 (from Bt44). The combination of a
reduction in earnings forecast and rolling TP to yearend 2014 from mid-2014 leads to a
cut in TP to Bt42 from Bt44 based on SOTP, consisting of Bt39 per share for satellite
and telephony (based on DCF, 9.5% and 1% terminal growth) and Bt3 per share for its
42% in CSL.