Thai Tap Water Supply

Thai Tap Water Supply Plc (TTW) 

Platform for growth in place. At TTW's current share price, shareholders would receive, in our view, value for money from the company's existing water businesses plus a free ticket to further gains from its planned investments for growth. We maintain our OUTPERFORM call on TTW despite trimming our DCF-based target price from THB7.5 to THB7 to reflect a 2-3% downward revision to our FY12-13 profit forecasts for the water operations and a lower probability-adjusted value for potential solar power deals. Nevertheless, we still like TTW for its steady water businesses, attractive dividend yields and ample room to invest for growth. The finalisation of value-accretive investment deals could drive up its share price.