After CENTEL marked a surprise loss for 1Q22, we rescheduled our profit turnaround expectation from 1H22 to 2H22 and cut our earnings projections by 73% for 2022 and 9% for 2023 (but our long-term forecasts stand unchanged). Hence, our DCF-derived YE22 target price slips from Bt47 to Bt45.50. We now prefer MINT to CENTEL as we expect a sharp bottom-line turnaround for 2Q22.
Earnings forecast cuts after surprise 1Q22 loss
CENTEL reported a 1Q22 net loss of Bt44m (versus a loss of Bt476m for 1Q21 and a profit of Bt152m for 4Q21). The red ink was a surprise to us and the consensus; we had expected a net profit for the quarter. The loss was due to deeper red ink at the hotel business than modeled and a lower-than-assumed profit at the QSR operation. We see this as only a hiccup in the firm’s turnaround story and still believe in its solid funda-mentals. Our BUY call stands on CENTEL, but we now prefer MINT in anticipation of a sharp profit rebound for 2Q22 (please see our May 23, 2022 report, Minor International: Turnaround in play).