Earnings Report /
Thailand

Thaicom PCL: Beat estimates; rating upgrade on regulatory progress

  • Exceeded our model robustly

  • THCOM posted a Bt498m net profit for 2Q20

  • Sales were 5% below our model but the GM of 24.1% in 2Q20

Bualuang Securities
6 August 2020

We upgraded our rating from HOLD to TRADING BUY, premised on the regulatory progress including the NBTC’s satellite orbital slot licenses expected by YE20 and the partnership with CAT Telecom to launch the low-earth orbit (LEO) satellites in the next few years.

Exceeded our model robustly

THCOM posted a Bt498m net profit for 2Q20, a reversal from net loss of Bt135m in 2Q19 and up 152% QoQ. Excluding extra items in 2Q20—1) Bt223m FX loss, 2) Bt719m in compensation income from insurance claims and 3) Bt7m in loss on asset impairment (due to the adoption of TFRS9 accounting)—it posted a Bt9m core profit for the quarter, up 421% YoY but down 84% QoQ. The reported black ink beat our Bt220m net loss estimate, mainly due to the one-time recognition of huge insurance claims while the core black ink beat our Bt50m core loss estimate, mainly due to higher GM, lower tax expense and greater equity income from LTC than modeled. Sales were 5% below our model but the GM of 24.1% in 2Q20 also exceeded our estimate of 19%.