Earnings Report /
Thailand

Thaicom PCL: Beat our estimates; YoY reversal to a core loss expected for 2Q21

  • Surprisingly shallower core loss than modeled

  • THCOM posted a Bt111m net profit for 1Q21

  • We model a Bt50m 2Q21 core loss

Bualuang Securities
30 April 2021

Our TRADING BUY stands, pending the progress of the talk on the partnership deal between THCOM and NT before Sep 2021 and the auctions of NBTC’s satellite orbital slot licenses in 2H21. We still suggest that investors ignore its 1Q21 through 4Q21 earnings which are likely to weaken due to the revenue drop ahead of concession expiry and focus on the above two issues which will add the incremental values to THCOM in the longer term.       

Surprisingly shallower core loss than modeled

THCOM posted a Bt111m net profit for 1Q21, down 44% YoY and a reversal from a Bt258m 4Q20 net loss. Excluding extra items in 1Q21—1) Bt151m FX gain and 2) Bt1m in a reversal of asset impairment—it posted a Bt41m core loss, a reversal from Bt52m 1Q20 core profit but shallower by 55% QoQ. Net profit beat estimate by 153%, largely due to higher-than-modeled FX gain (above our FX gain estimate of Bt94m). Core loss was 19% shallower than model due to higher other income and lower tax expense than estimated. Sales beat our estimate by 5% led by IPSTAR sales. Gross profit missed our model by 23% due to higher conventional satellite cost than modeled. After-tax loss was 53% shallower than modeled due to lower tax expense than assumed.