Our TRADING BUY stands based on the anticipated shallower core loss in 2H21 on further cost-cutting initiatives and the improved service revenue in 2022 on the domestic consumption recovery.
Surprisingly shallower core loss than modeled from OPEX control
TRUE posted a 2Q21 net loss of Bt299m, a reversal from a Bt1.26bn net profit in 2Q20 while shallower by 49% QoQ. Excluding extra items in 2Q21—Bt205m FX loss and Bt195m in other extra gains—and one big extra item in 2Q20—Bt1.89bn gain from the 2.82% sell-off of TRUE’s stake in DIF—it posted a Bt289m core loss for the quarter, shallower by 66% YoY and 53% QoQ. Net and core losses were shallower than our model by 50% and 56%, respectively, thanks to the Group’s higher service revenue and lower OPEX (service costs and SG&A expenses) than modeled. Group’s service revenue, gross profit, EBIT and after-tax loss beat our model by 0.6%, 4%, 16% and 26%, respectively.