Equity Analysis /
Thailand

Ditto Thailand PCL: From DITTO to Mewtwo, 2H21 onward

  • Strong 2H21 earnings growth outlook

  • Clear revenue visibility

  • Riding the digital transformation wave

Napon Jaisan
Napon Jaisan

Equity Research Analyst

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Bualuang Securities
28 September 2021

Although Ditto looks like a purple blob, this Pokémon can change into any shape it desires. We believe that DITTO will transform to Mewtwo—one of the strongest Pokémon—in 2H21-2022. Our model points to strong earnings growth for 2H21, despite the impact of COVID-19 in 3Q21. And there’s a lot of scope for the firm to expand its customer base further. BUY!

Strong 2H21 earnings growth outlook

Historical data show that the third-quarter is typically the strongest earn-ings period of the year for DITTO. Although business was squeezed this year by Thailand’s third COVID-19 outbreak (staff were unable to work on-site on some projects), 3Q21 earnings should still be the strongest of 2021. We expect a profit of Bt44m for 3Q21, up by 19% YoY and 16% QoQ and a record high. DITTO signed two big projects during 2Q21—a Hybrid Cyber Security Operations Center for KTB Computer Services (Bt351m) and a planetarium in Phitsanulok Province (Bt163m). It will recognize revenue from the two contracts in 3Q21 onward. Moreover, recurring revenue should rise further in 3Q21, due to the snowballing effect of the data & document management biz (DMS).

For 4Q21, we expect a profit of Bt30m, up 60% YoY. Our model points to 2H21 earnings jumping 34% YoY.