A sharp share price correction, down 15% in two months (from high at Bt60.25 on March 10, 2021), is fully priced into unexciting 1Q21 result and QoQ hiccup in 2Q21 outlook. We recommend accumulating M, BUY rating at new YE21 DCF-derived target price of Bt65 (down from Bt70 based on 7.4% WACC, 2% terminal growth). At a conservative assumption of zero long-term rate under Dividend Discount Model, it offers 16% capital gain to fair value estimate of Bt60.57 (in Figure 3).
Below our estimate but ahead of the consensus forecast
M reported a net (core) profit of Bt89m in 1Q21, down 74% YoY and 75% QoQ. The result was far below our estimate of Bt268m due to 8% disappointing sales and missing GM (lower than our forecast by 230bps). However, 1Q21 profit was 65% ahead of the street forecast.