Our BUY rating stands, based on an attractive valuation with its current 3% holding premium and the expected 2023 core earnings recovery.
In-line net profit but core profit slightly below our estimate
INTUCH posted a 3Q22 net profit of Bt2.46bn, down 7% both YoY and QoQ. Excluding extra items in 3Q22—1) Bt129m in THCOM’s proportionate FX gain, 2) Bt3m in THCOM’s proportionate impairment loss on bad debts, 3) Bt107m in THCOM’s proportionate impairment of Thaicom 8 satellite, 4) Bt25m in ADVANC’s proportionate tax benefits from investment and 5) Bt94m in ADVANC’s proportionate net FX loss—its core profit was Bt2.51bn, down 7% YoY and 5% QoQ. Its net profit was in line with our model but its core profit was 3% below our estimate led by ADVANC’s lower-than-estimated core profit (from lower core service revenue and higher network OPEX). THCOM’s core profit beat our estimate by 46% due to higher sales and GM and shallower LTC equity loss than modeled.