|
True Corporation PCL (SET:TRUE) is a Thailand-based fully-integrated, nationwide telecommunications provider with three core business segments including: True Mobile Group, Thailand's third largest mobile operator, which operates 3G and 4G LTE as well as 2G mobile businesses under the brands TrueMove H and TrueMove, which is partnered with London-based Vodafone Group PLC.; TrueOnline, the largest fixed-line phone operator in the Bangkok Metropolitan Area (BMA) and the largest broadband and WiFi operator with a comprehensive nationwide network using FTTx, DOCSIS 3.0 and xDSL technologies; and TrueVisions, the largest nationwide pay TV operator and offering HD quality content in the country.
True’s major shareholders include the Charoen Pokphand (CP) Group Co. Ltd. and China Mobile Limited. Between May 18 and July 7, 2016, CP Group increased its stake in True Corporation PCL from 51.43% to 56.2%, while China Mobile, the second largest shareholder, still owns its 18% stake in TRUE.
True Corporation said on August 11 that its second-quarter 2016 revenues were 30.75 billion baht, up 6.7% year-on-year, with a net loss of 367 million baht as the company raised expenses related to the aggressive rollout of the 4G and 2G networks and spectrum license amortization costs. The results were better than expected, since two analysts polled by Reuters had forecasted an average net loss of 870 million baht.
In the company statement, True said its market share in the mobile business rose to 23.6% in the second-quarter, from 22% in the previous quarter, and TrueMove H gained 1.1 million net additions with 21.5 million subscribers at the end of June.
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. In November 2015, TRUE won the auction held by the National Broadcasting and Telecommunications Commission (NBTC) of Thailand for the two 4G spectrum licenses of 15MHz bandwidth each on the 1800MHz frequency, and agreed to pay 39.79 billion baht. The company also won the bids in the second auction of the 900MHz spectrum in December 2015 and was supposed to pay a record 76.3 billion baht for the another two 4G spectrum licenses.
In early July, TRUE skyrocketed almost 30% to the 9 baht level, as new TRUE shares began trading and after CEO Supachai Chearavanont told reporters that the company expected its second-quarter market share in the mobile business to rise. He also said True Corp expected strong growth in the mobile business in the second-half of this year after the network expanded to 98% at the end of the second-quarter.
Since the second-quarter earning reports were released, the stock had pulled back as the company continues posting losses, and is now trading at the low-end of the range between 6.8 and 8.2 baht. The stock is on a slight up-trend but downside risks to the 5.6 baht level remain.
According to the Financial Times, the consensus amongst 21 polled investment analysts covering True Corporation PCL gave the company a HOLD rating, with the median 12-month price target of 6.57 baht a share, as of Sept 26, 2016.
Disclosure: No position in any companies mentioned and no recommendation. |
