We reiterate our TRADING BUY on DTAC and expect the TRUE-DTAC amalgamation to make progress going forward. We assign a 70% probability that this deal will be approved by the NBTC eventually.
Net and core profits exceeded our model
DTAC posted a Bt726m net profit for 1Q22, down 12% YoY but up 325% QoQ. Excluding three extra items in 1Q22—Bt10m FX loss, Bt2m loss on the fair value hedge and Bt110m in one-time amalgamation related costs—core profit was Bt848m, down 20% YoY but up 46% QoQ. Net and core profits beat our model by 20% and 37%, respectively, due to lower regulatory, depreciation and amortization, marketing and general administrative expenses than modeled. Service revenues (excl. IC) was 2% below our model due to the slower macroeconomic recovery from the wider Omicron spread. Regulatory, depreciation and amortization, marketing and general administrative expenses were short of model by 11%, 5%, 8% and 9%, respectively.