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True Corporation Pcl, (SET:TRUE), a 51.43% stake owned by the Charoen Pokphand Group Co. Ltd. and an 18% stake owned by China Mobile International Holdings Limited, as of March 15, 2016, is a Thailand-based integrated communication solution provider, controlling Thailand's largest cable TV, TrueVisions, and Thailand’s largest ISP, TrueInternet. The company also owns Thailand's third largest mobile operator, TrueMove, which is partnered with London-based Vodafone Group Plc.
The company said on May 13 that its first-quarter 2016 revenues were 29.01 billion baht with a net profit of 1.96 billion baht, or 0.08 baht per share. The wireless unit, which accounted for 71% of the total revenue, posted a net loss of 1 billion baht, due to higher expenses related to network expansion and 4G licenses, according to Reuters. The company saw its share of the cellular market rising to 22% from 20.8% in the previous quarter, while wireless revenue jumped 24%.
Ahead of the National Broadcasting and Telecommunications Commission (NBTC) of Thailand re-auction on May 27 of the 900MHz spectrum, which was previously owned by Jasmine International (SET:JAS), TRUE announced on Tuesday that it will not participate in the re-auction, saying it already had sufficient bandwidth capacity to provide services. This could be the end of the bidding war saga, as Thailand’s largest mobile operator Advanced Info Service Pcl (SET:ADVANC) now becomes the only bidder in the re-auction. The second largest mobile operator Total Access Communication Plc (SET:DTAC) said earlier that it won't join the re-auction.
The bidding war saga began on November 12, when TRUE and ADVANC won the auction held by NBTC for the two 4G spectrum licenses of 15MHz bandwidth each on the 1800MHz frequency, and agreed to pay 39.79 and 40.99 billion baht, respectively. The second auction of the 900MHz spectrum was held on December 15. TRUE and JAS won the bids and were supposed to pay a record 76.3 and 75.67 billion baht, respectively, for the two 4G spectrum licenses. In late March, JAS failed to pay its first installment of the 8.04 billion baht license fee, which resulted in the termination of JAS' right to provide 4G service.
TRUE shares broke down the multi-year trendline support in late 2015 and plunged about 40% to the 5.6 baht support level, on concerns that the company might have overpaid for the 4G spectrum licenses. The shares bounced off the support level and are now bumping into the trendline resistance of the descending broadening wedge chart pattern. TRUE shares could pull back to retest the 5.6 baht support level, if the stock is unable to break out the trendline resistance and the key head resistance at 8.2 baht.
As of May 16, 2016, the consensus forecast amongst 23 investment analysts polled by the Financial Times advises investors that the company will Underperform the market, with the median 12-month price target of 6.20 baht per share.
Disclosure: No position and no recommendation. |
