Equity Analysis /

Thailand: System Integrators - Peak in 4Q22 …slow in 1Q23

  • 4Q22 was peak of year for results

  • 1Q23 will be seasonally weak

  • MFEC to lead 2023 growth

Napon Jaisan
Napon Jaisan

Equity Research Analyst

Bualuang Securities
13 March 2023

4Q22 was the best quarter of the year. MFEC is our top pick, as it will mark YoY profit growth for 1Q23 and won’t face any stock dilution. For 2023, our top pick is also MFEC, as it will transition from made-to-order projects to recurring managed services.

4Q22 was peak of year for results

The three stocks we cover in System Integrator space reported aggregate net earnings of Bt280m for 4Q22, down 19% YoY but up 14% QoQ. Core profit was Bt395m, down 7% YoY but up 50% QoQ. AIT led the quarter with core earnings of Bt244m, up by 4% YoY and 56% QoQ (the lifting of COVID-related restrictions made for easier access to project sites). ITEL posted a 4Q22 net profit of Bt77m, down 18% YoY but up 43% QoQ. Data service revenue declined by 9% YoY and 9% QoQ, despite recurring income, as ITEL negotiated with the NBTC to end the USO-1 contract early in exchange for receiving an immediate Bt1.6bn in cash payout. The renewal is expected in May 2023. Installation revenue rose by 36% YoY (big projects for EGAT) and 120% QoQ (seasonality).