Equity Analysis /
Thailand

Total Access Communication PCL: TRUE-DTAC amalgamation progress now under spotlight

  • Fairly stable competition but more aggressive postpaid price point

  • Slight QoQ recovery of service revenue expected in 1Q22

  • Insights into 1Q22—core profit to tumble YoY but recover QoQ

Prasit Sujiravorakul
Prasit Sujiravorakul

Equity Research Analyst

Bualuang Securities
1 April 2022

We expect the next agenda of Apr 4 shareholders’ meetings for approvals of TRUE-DTAC amalgamation to be a share price catalyst for DTAC, paving the way for the step of the MergeCo establishment. Although its service revenue and earnings will drop YoY in 1H22, we foresee a positive momentum for a QoQ rise. Our TRADING BUY stands, based on the amalgamation progress and cheap valuation—EV/EBITDA of 6.2x against its recent EV/EBITDA high of 7.2x in Oct 2015. Our YE23 Bt73/share target price includes the DCF-based synergy value estimated at Bt13.7/share of DTAC.

Fairly stable competition but more aggressive postpaid price point

The overall 1Q22 mobile competition has remained fairly stable QoQ or   the same level of intensity as in 4Q21. In particular, the “fixed-speed unlimited” prepaid promotions have persisted in the market. The postpaid segment has been more aggressive in 1Q22, led by postpaid promotions featuring lower price points starting with Bt349/mth to Bt499/mth with some operators offering as low as Bt299/mth. We believe that greater postpaid intensity has emerged following the TRUE-DTAC amalgamation announcement in 4Q21.