Our TRADING BUY stands in anticipation of shallower core loss in 2023 and the expected long-term synergy from amalgamation after the MergeCo is established in 1Q23.
Deeper net and core losses than our model
TRUE posted a 3Q22 net loss of Bt2.76bn, deeper in the red by 357% YoY and 262% QoQ. Excluding extra items in 3Q22—Bt366m FX loss and Bt286m in other extra gains—it posted a Bt2.68bn core loss, deeper in the red by 172% YoY and 19% QoQ. Net and core losses missed our expectations by 112% and 79%, respectively, mainly due to much higher SG&A expenses than modeled. Group’s service revenue beat our model by 0.8% while service costs were 2.4% below our estimate. SG&A expenses exceeded our model by 17% related to increased marketing and promotional expenses. Operating profit, EBITDA and after-tax loss missed our estimates by 35%, 4% and 28%, respectively.