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ICT

Thailand: Sector Focus


8 October 2009

Preview 3Q52:
6.01 3Q52 13.9% QoQ
0.9% YoY 9M52 2.24 78%
-34% YoY
QoQ
non-voice
( 2G )
DTAC TRUE

Overweight
(Maintain)

SET and SETICT relative


1000

SET Index (LHS)

140

SET ICT Index (RHS)

900

120

800

100

700

ADVANC:

600

ADVANC 4.44 3Q52 6% QoQ


2% YoY QoQ
(OPEX)
ADVANC
1.8% QoQ

80

500
60

400
300

40

200

20

100
0
2005

0
2006

2007

2008

2009

Source: KS

DTAC: conservative

DTAC 1.53 3Q52 12% QoQ


17% YoY DTAC
(MOU) conservative
9M52 4.36 70%
2552 (6.23 )

Kusumaporn Sookmongkol
Kusumaporn.s@kasikornsecurities .com; Tel: +662 696-0053

TRUE:

TRUE 102
QoQ True Move, True Vision

3Q52 Neutral
TRUE
TRUE
3G

3G

(.)

TOT
CAT 3G .
.

Code

REC

Price

Fair price

+/-

Mkt cap

Core profit (Btmn)

Core EPS gr (%)

PER (x)

ROE (%)

(Bt)

(Bt)

(%)

(Btmn)

2009E

2010E

2009E

2010E

2009E

2010E

2009E

2010E

Outperform

93.75

101.00

7.7

277,719

17,477

17,918

-7.1

2.5

15.9

15.5

24.2

25.1

DTAC

Neutral

42.00

32.00

-23.8

99,448

6,230

6,365

-17.5

2.2

16.0

15.6

10.2

10.0

TRUE

Neutral

3.34

2.20

-34.1

23,635

-1,315

-1,787

-381.3

35.9

n.a

n.a

n.a

n.a

ADVANC

The information, statements, forecasts and projections contained herein, including any expression of opinion, are based upon sources believed to be reliable, but their accuracy,
completeness or correctness are not guaranteed. Expressions of opinion herein were arrived at after due and careful consideration and they were based upon the best information
known to us then, and in our opinion are fair and reasonable in the circumstances prevailing at the time. Expressions of opinion contained herein are subject to change without notice.

8 October 2009

www.kasikornsecurities.com

Figure 1: ICT 3Q09 earnings preview ADVANC, DTAC, TRUE


Financials
Sales (Btmn)
COGS (Btmn)
EBITDA (Btmn)
Operating Profit (Btmn)
Core Profit (Btmn)
Net Profit(Btmn)
Core EPS (Bt)
Performance Drivers
% YoY organic revenue growth
% QoQ organic revenue growth
Ratios
Gross Margin (%)
EBITDA Margin (%)
Optg. Margin (%)
ROCE (%)

3Q08

4Q08

1Q09

2Q09

3Q09E

%YoY

%QoQ

%YTD2009E

2009E

58,987
39,899
21,015
11,056
5,953
5,140
2.22

57,594
39,588
19,684
9,275
5,872
466
2.03

58,116
38,841
21,664
11,991
6,276
5,906
2.19

56,147
37,359
21,274
10,852
5,275
6,784
1.95

58,547
38,777
22,364
11,407
6,010
6,350
2.14

-0.7%
-2.8%
6.4%
3.2%
0.9%
23.5%
-3.7%

4.3%
3.8%
5.1%
5.1%
13.9%
-6.4%
9.8%

73%
72%
76%
80%
78%
80%
75%

236,690
159,841
85,770
42,959
22,392
23,747
8.35

2.72
-0.52

-1.50
-0.55

-3.35
2.03

-1.97
-2.73

-0.70
4.30
Avg YTD

2009E

32.4%
34.1%
17.0%
18.4%

31.3%
32.5%
14.9%
8.7%

33.2%
35.8%
19.3%
12.3%

33.5%
36.6%
18.0%
11.5%

33.8%
36.9%
18.2%
12.4%

33.5%
36.4%
18.5%
12.1%

32.5%
34.7%
16.6%
8.9%

Change
1.4%
2.8%
1.2%
-6.0%

0.3%
0.4%
0.2%
0.9%

Source: KS

5.85
4.3% QoQ 0.7% YoY -
QoQ
2Q ()
TRUE QoQ (+6%)

iPhone 3Gs
Blackberry ADVANC QoQ
(+1.8%) DTAC

Blackberry DTAC

Figure 4: ICT: estimated net adds


Subs and net adds ('000)

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09E

982

877

810

536

272

320

500

25,087

25,965

26,775

27,310

27,582

27,902

28,402

884

777

780

469

263

255

200

16,656

17,433

18,213

18,682

18,945

19,200

19,400

49

507

720

1,081

247

243

250

12,448

12,956

13,675

14,757

15,004

15,247

15,497

ADVANC
Total net additions
Total subs
DTAC
Total net additions
Total subs
TRUE
Total net additions
Total subs
Source: KS

8 October 2009

ICT

IR

voice
(International Roaming: IR)
(International Direct Dialing: IDD) 7-9%
( IC) IR
85% 1Q48-2Q52 (.)
.. 52
IR TRUE
IR IR IDD TRUE
IR ID 10-20% QoQ 3Q52
Vodafone DTAC
Figure 2: Improving GDP guides increasing service revenue

Million
5000

Btmn

1.2

24,000

4500

1.1

22,000

4000

20,000

3500
2500

16,000

500

Source: BOT, KS

3Q09

2Q09

1Q09

4Q08

3Q08

2Q08

1Q08

4Q07

3Q07

2Q07

1Q07

4Q06

1Q05

1Q10E

1Q09

3Q09E

3Q08

1Q08

3Q07

1Q07

3Q06

1Q06

3Q05

1Q05

500

3Q04

1000

10,000
1Q04

12,000

0.4
3Q03

0.5
1Q03

1500

3Q02

14,000

1Q02

1000

2000

0.6

3Q06

0.7

1500

3000

18,000

0.8

2Q06

0.9

Btmn
2500

IR (RHS)

2000

1Q06

1.0

Number of Tourists (LHS)

4Q05

Service revenue excl. IC (RHS)

3Q05

GDP (LHS)

2Q05

Bttn

Figure 3: Increasing no. of tourist encourage IR revenue

Source: TAT, BOT, KS

EBITDA margin 36.9% ( 33.5%


2Q52 34.1% 3Q51) ADVANC
OPEX ()
ADVANC
DTAC TRUE
(below-the-line)

Figure 4: EBITDA margin


3Q08

4Q08

1Q09

2Q09

3Q09E

ADVANC

41.7%

41.8%

44.4%

44.4%

44.8%

AVERAGE

34.1%

32.5%

35.8%

36.6%

36.9%

DTAC

31.4%

25.9%

29.6%

30.0%

30.1%

TRUE

29.1%

29.8%

33.3%

35.2%

35.9%

Source: KS

8 October 2009

ICT

2G
3G
DTAC
28 .. ..
( )
ADVANC ( 101
) top pick 3G
Figure 5: PER and earnings growth

Figure 6: RoE and PBV

PE(X)
60

ROE(%)
30

TRUE
50

25

40

20

30

ADVANC
SETICT

15

ICTregional
20
SETICT
ADVANC
DTAC
10
SET

SET
ICTregional

10
DTAC
5

Earning
growth(%)

TRUE

0
0

50

100

150

200

250

300

Source: KS

8 October 2009

PBV(X)
0

Source: KS

ICT

Advanced Info Service (ADVANC, Outperform, FP 101)

ADVANC 4.44 +6% QoQ -2% YoY


QoQ

ADVANC 3% QoQ 6% YoY QoQ


ADVANC

80% 74% 8
ADVANC 1.8% QoQ
ADVANC ()
EBITDA margin ADVANC 44.8% ( 44.4%
2Q52) ADVANC
ADVANC
1H52 ( 1%
4%) 2H52
9M52 1.31 12% YoY 75%
2552 (1.75 ) 9M52

Figure 7: 3Q09 earnings preview ADVANC


Financials
Sales (Btmn)
EBITDA (Btmn)
Operating Profit (Btmn)
Core Profit (Btmn)
Net Profit(Btmn)
Core EPS (Bt)
Performance Drivers
% YoY organic revenue gr
% QoQ organic revenue gr
Net IC (Btmn)
Ratios
Gross Margin (%)
EBITDA Margin (%)
Optg. Margin (%)
ROCE (%)

3Q08

4Q08

1Q09

2Q09

3Q09E

%YoY

%QoQ

%YTD2009E

2009E

27,528
11,488
6,908
4,555
4,533
1.54

26,270
10,980
5,666
3,933
420
1.33

26,300
11,672
7,016
4,546
4,567
1.54

25,198
11,191
6,462
4,155
4,196
1.40

25,977
11,641
6,702
4,397
4,447
1.48

-6%
1%
-3%
-3%
-2%
-4%

3%
4%
4%
6%
6%
6%

0.71
0.74
0.75
0.75
0.76
0.75

108,479

8.3
-1.9
209

0.5
-2.1
347

-4.1
1.6
274

-5.4
-3.0
319

-3.5
0.0
321

34.4%
41.7%
25.1%
27.9%

36.7%
41.8%
21.6%
22.0%

35.2%
44.4%
26.7%
24.4%

34.6%
44.4%
25.6%
23.7%

36.3%
44.8%
25.8%
24.5%

53%
Change
2.0%
3.1%
0.7%
-3.3%

Avg YTD

2.3
n.a
441
2009E

35.4%
44.5%
26.0%
24.2%

36.5%
42.8%
24.8%
17.7%

1%
1.7%
0.4%
0.2%
0.9%

46,414
26,892
17,477
17,477
5.90

Source: KS

8 October 2009

ICT

ADVANC 3Q52 2552


1.747 ( 5.90 ) ADVANC
DPC 3.7
4Q52 (ADVANC 3.7 4Q51)
3.30
ADVANC upside 6.5% 101 (
2G ) Outperform ADVANC
3G

Figure 8: ADVANC-EV/EBITDA BAND

Figure 9: ADVANC-PBV BAND

ADVANC EV/EBITDA (x)

EV (Btmn.)
500,000

P/BV Band - ADVANC

160

450,000

9x

400,000

140

8x

350,000

7x

120

300,000

6x

100

250,000

5x

80

200,000

4x

150,000

3x

100,000

2x

5.5x
5x
4.5x
4x
3.5x
3x
2.5x

60
40
20

50,000
-

8 October 2009

Sep-09

Jan-09

May-09

Sep-08

Jan-08

May-08

Sep-07

Jan-07

May-07

Sep-06

Jan-06

May-06

Sep-05

Jan-05

May-05

Sep-04

Jan-04

Source: KS

May-04

Jul-10

Jul-09

Jan-10

Jul-08

Jan-09

Jul-07

Jan-08

Jul-06

Jan-07

Jul-05

Jan-06

Jul-04

Jan-05

Jul-03

Jan-04

Jul-02

Jan-03

Jul-01

Jan-02

Jul-00

Jan-01

Jan-00

Source: KS

ICT

Total Access Communication (DTAC, Neutral, TP Bt32.0)

DTAC 1.53 12% QoQ 18% YoY


QoQ

4% QoQ 1% YoY DTAC


3Q52
DTAC 3Q52 ( 1.22 )
DTAC 1% 3Q52 +200K

DTAC
92,000
3Q52 DTAC
Blackberry iPhone-3Gs TRUE
DTAC DTAC
Blackberry
DTAC
IR Vodafone DTAC Vodafone
Vodafone
DTAC Vodafone
300 IR
DTAC 3%
9M52 4.36 46% YoY 70% 2552
(6.23 )
DTAC 3Q52 28
29

Figure 10: 3Q09 earnings preview DTAC


Financials
Sales (Btmn)
EBITDA (Btmn)
Operating Profit (Btmn)
Core Profit (Btmn)
Net Profit(Btmn)
Core EPS (Bt)
Performance Drivers
% YoY organic revenue growth
% QoQ organic revenue growth
Net IC (Btmn)
Ratios
Gross Margin (%)
EBITDA Margin (%)
Optg. Margin (%)
ROCE (%)

3Q08

4Q08

1Q09

2Q09

3Q09E

%YoY

%QoQ

%YTD2009E

2009E

16,415
5,146
2,780
1,838
1,836
0.78

16,125
4,172
1,991
1,340
1,239
0.57

16,247
4,809
2,380
1,482
1,470
0.63

15,823
4,752
2,161
1,360
1,364
0.57

16,535
4,973
2,323
1,511
1,531
0.64

1%
-3%
-16%
-18%
-17%
-18%

4%
5%
8%
11%
12%
11%

0.75
0.71
0.68
0.70
0.70
0.70

65,122
20,564
10,036
6,230
6,230
2.63

2.6
0.3
-8

-0.7
-0.5
-203

-3.6
2.1
-272

-0.6
-2.4
-320

-0.9
0.0
-161

33.3%
31.4%
16.9%
13.7%

30.1%
25.9%
12.3%
10.4%

32.5%
29.6%
14.6%
12.3%

32.5%
30.0%
13.7%
11.6%

32.1%
30.1%
14.0%
12.5%

1832%
-50%
Change
-0.0
-0.0
-0.0
0.0
-0.0
0.0
-0.0
0.0

Avg YTD
32.4%
29.9%
14.1%
12.1%

-3
n.a
-873
2009E
32%
32%
15%
8%

Source: KS

8 October 2009

ICT

DTAC 2552 6.23 ( 2.63 )


-33% YoY DTAC 3G

Neutral DTAC (32.0
2G ) DTAC
3G
conservative DTAC EV/EBITDA
5.8 6.2 2552
3G EV/EBITDA
Figure 11: DTAC-EV/EBITDA BAND
EV (Btmn.)
300,000

Figure 12: DTAC-P/BV BAND

DTAC - EV/EBITDA (x)

250,000

150,000
100,000

2.4x

60

11x
10x
9x
8x
7x
6x
5x
4x

200,000

P/BV Band - DTAC

70

2.1x
50

1.8x

40

1.5x

30

1.2x
0.9x

20

0.6x

50,000

10

Source: KS

8 October 2009

Sep-09

May-09

Jan-09

Sep-08

May-08

Jan-08

Sep-07

May-07

Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10

Source: KS

ICT

True Corporation (TRUE, Neutral, TP Bt2.20)

TRUE 372
102 ADVANC DTAC QoQ
IR IDD

TRUE 6% QoQ 6.6% YoY


ADVANC
88 20%
True Move SIM
IR IDD
TRUE 1) True Visions
AF6 ( )
Premier League 2) (leased-line)
TRUE
(Bullet Payment)
2553-2554
preview
TRUE
3Q52

Figure 13: 3Q09 earnings preview TRUE


3Q08

4Q08

1Q09

2Q09

3Q09E

%YoY

%QoQ %YTD09E

2009E

Financials
Sales (Btmn)

15,044

15,198

15,569

15,127

16,035

6.6%

6.0%

74%

63,089

EBITDA (Btmn)

4,381

4,532

5,183

5,331

5,749

31.2%

7.8%

87%

18,792

Operating Profit (Btmn)

1,367

1,618

2,595

2,229

2,382

74.3%

6.8%

119%

6,032

-440

599

248

-240

102

n.a

n.a

n.a

-1,315

-1,228

-1,193

-131

1,224

372

n.a

n.a

3687%

-0.10

0.13

0.03

-0.03

0.01

n.a

n.a

-7%

% YoY organic revenue growth

-2.8%

-4.4%

-2.3%

0.3%

6.6%

1.8%

% QoQ organic revenue growth

-0.3%

1.0%

2.4%

-2.8%

6.0%

1,355

Net IC (Btmn)

-209

-162

-28

-20

-117

Core Profit (Btmn)


Net Profit(Btmn)
Core EPS (Bt)

40
-0.19

Performance Drivers

Ratios

n.a
Change

n.a
Avg YTD

-218
2009E

Gross Margin (%)

29.4%

27.1%

31.8%

33.3%

32.9%

3.5%

-0.4%

32.6%

29.1%

EBITDA Margin (%)

29.1%

29.8%

33.3%

35.2%

35.9%

6.7%

0.6%

34.8%

29.8%

9.1%

10.6%

16.7%

14.7%

14.9%

5.8%

0.1%

15.4%

9.6%

13.7%

-6.1%

0.3%

-0.9%

0.1%

-13.6%

1.0%

-0.2%

0.6%

Optg. Margin (%)


ROCE (%)
Source: KS

8 October 2009

ICT

TRUE
TRUE
True Vision

3G TRUE PBV 2 ()
2.20 Neutral TRUE
TRUE

3G
Figure 14: TRUE EV/EBITDA BAND

Figure 15:TRUE-PBV BAND

TRUE - EV/EBITDA (x)

EV(Btmn.)
250,000

Bt

P/BV Band - TRUE

16
14

11x
10x
9x
8x
7x
6x
5x
4x

200,000

150,000

100,000

12
6.5x

10

5.5x
8
4.5x
6

3.5x

50,000

2.5x
1.5x

0.5x

Source: KS

8 October 2009

Sep-09

Jan-09

May-09

Sep-08

Jan-08

May-08

Sep-07

May-07

Jan-07

Sep-06

Jan-06

May-06

Sep-05

Jan-05

May-05

Sep-04

May-04

Jan-04

Jul-10

Jul-09

Jan-10

Jul-08

Jan-09

Jul-07

Jan-08

Jul-06

Jan-07

Jul-05

Jan-06

Jul-04

Jan-05

Jul-03

Jan-04

Jul-02

Jan-03

Jul-01

Jan-02

Jul-00

Jan-01

Jan-00

Source: KS

10

ICT

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