Strong 2Q20 resilient result, interim dividend payment and promising outlook in 3Q20-4Q20 will entail positive catalyst toward the share price. We prefer OSP on high visibility of earnings growth over the next three years (13% CAGR in 2021-2023). Valuations are at a bargain at 2021 PER of 29.0x, 3% below its mean and far below a bullish PER of 36.1x. Our BUY rating stands at a YE21 DCF-derived target price of Bt48 (7.3% WACC, 2.0% terminal growth rate).
In line with our estimate but above the consensus forecast
OSP reported a net profit of Bt804m for 2Q20, up 13% YoY but down 13% QoQ. Core profit rose 2% YoY due to one-time employee benefit expenses in 2Q19 (none in 2Q20). The result was in line with our estimate and 5% ahead of the street forecast. OSP announced interim DPS of Bt0.45 for 1H20 (beating our estimate of Bt0.35) implying to 1.1% simple yield, XD on August 27, and payment on September 11.