Our TRADING BUY stands, based on solid 4Q22-1H23 earnings (driven by ITC) and the TU’s valuation unlocking from listing ITC in the SET.
Net and core profits beat our estimates
TU posted a 3Q22 net profit of Bt2.53bn, up 31% YoY and 56% QoQ. Excluding extra items in 3Q22—Bt792m FX gain and the assumed Bt300m in expenses related to the fair value adjustment on Red Lobster (RL)’s preferred shares—core profit was Bt2.04bn, up 34% YoY and 17% QoQ. Net profit beat our model by 10% thanks to bigger than estimated FX gain while core profit exceeded our estimate by 7% due to higher sales and GM than modeled. Sales beat the model by 2%, while GM was slightly higher than our forecast. GM of 18.2% was slightly higher than our 18% estimate. RL’s equity loss was 21% deeper than modeled.