Plan B Media upbeat about institutional interest in its initial public offering

Managing director Pinijsorn Luechaikajohnpan said the company, which grew by more than 40 per cent annually from 2011 to 2013, was scheduled to start trading its shares on the Stock Exchange of Thailand on February 17.

The IPO price will be decided tomorrow, and the share subscription period will run from February 9 to 11. Bualuang Securities is the financial adviser for the offering.

Plan B Media has not yet finalised its share allocation, but local institutional investors are likely to take some 25 per cent of the IPO shares, he said.

The indicative IPO price ranges from Bt1.80 to Bt2 per share, equivalent to about 20 times its projected earnings per share this year.

In comparison, VGI Global Media is trading on the stock market at about 41 times its earnings, and Master Ad at 35 times.

Four stock brokerage houses have evaluated Plan B Media’s appropriate price at between Bt2.80 and Bt3.50 apiece.

Plan B Media claims to have 20 per cent of Thailand’s OHM market, second only to VGI, which has an exclusive right to run its adverts on the BTS Skytrain network.

Pinijsorn said the company had outperformed its competitors with its average annual sales growth rate of 43 per cent from 2011 to 2013, and its average growth in EBITDA (earnings before interest, tax, depreciation and amortisation) of 30-40 per cent during the same period.

It targets sales growth of 20-25 per cent this year, he added.

During the first nine months of last year, Plan B Media booked revenue of a little over Bt1 billion, up just 0.2 per cent from the same period in 2013 because of political unrest and the economic slowdown.

In 2013, it booked a gross profit margin of more than 40 per cent and a net profit margin, before adjustment for depreciation and write-off items, of about 30 per cent, said the managing director.

Pinijsorn said Plan B Media’s strong points included its diversified customer base and innovative capability.

About one-third of its income is derived from transit media, which includes bus-wrap media and MRT media on the subway.

Another third comes from outdoor media, which include billboards, street furniture, roadside platforms and other static media, and the remainder from digital LED (light-emitting diode) advertising and other businesses.

Plan B Media will use funds raised from the IPO to retire nearly all of its debt, which will save the company more than Bt500 million annually in interest costs, as well as to finance new projects.

These include its bus Wi-Fi project, for which it has won a concession from the Bangkok Mass Transit Authority to provide free wireless Internet connections on board its 1,500 new buses.

Sights on media

New media such as bus Wi-Fi and expressway-flyover and digital LED billboards will be the key growth drivers of the company, which is also looking to expand its business to other Asean countries, including Indonesia, Malaysia, the Philippines, Myanmar and Cambodia, Pinijsorn said.

Emtek, an Indonesian media giant with a market capitalisation of more than Bt100 billion, became a strategic partner of Plan B Media about two years ago.

Pinijsorn said all of the company’s IPO allocations would be capital-increase stocks, since none of the existing shareholders would sell their shares, including Emtek, which will hold 11 per cent of the company after the IPO.

Plan B Media currently makes more than 60 per cent of its sales through media agencies, but it plans to increase the proportion accounted for by direct sales, he said.

"The company believes OHM still has a long way to go. It will increasingly become part of people’s daily lives, while TV media has become fragmented," he added.

Plan B Media’s diversified client base helps it to mitigate risks from a discontinuity of concessions from particular customers, and the company sticks to its policy of having a "3+3 years" formula for contract duration, Pinijsorn said.

According to Nielsen (Thailand), the Kingdom’s advertising spending totalled Bt102.3 billion last year, down 9.5 per cent from the 2013 level.

OHM spending showed a smaller drop, with outdoor media decreasing 4.2 per cent to Bt3.99 billion, while ad spending via transit media even went up, by 7.8 per cent to Bt3.8 billion.

In-store media, however, fell by 26.1 per cent to total Bt1.96 billion.