Thaicom

Thaicom Plc
2Q13A: Bt363mn core profit, Bt190mn net profit. 2Q13A was impressive with a ten-year high for core profit of Bt363mn, up 22% YoY and 39% QoQ, on growth in both Thaicom 5 and iPSTAR. A lower tax than estimated pushed it 21% above our forecast. However, a Bt173mn FX loss from baht weakness and its US$ debt pulled net profit down to Bt190mn. In 2H13F we expect further growth from 1) iPSTAR expansion in China and 2) the launch of Thaicom 6 in late 2013, for which bookings have already reached 66% - double profit breakeven level of 30%. Rolling to mid-2014 raises our TP to Bt44 from Bt43 based on SOTP consisting of Bt40.5/sh for satellite and telephony business (WACC 9.3%, 1% terminal growth) and Bt3.4/sh for its 42% in CSL. 
Highlights:
  2Q13A revenue was flat YoY and QoQ at Bt1.8bn, with higher revenue from satellite and telephony businesses offset by lower media revenue (satellite dish, with tiny profit margin).
  Revenue from conventional satellite (Thaicom 5) rose 5% YoY to Bt745mn, thanks to high demand for satellite TV in Thailand. Gross profit grew 14% YoY to Bt705mn.
  Revenue from iPSTAR service rose 4% YoY to Bt797mn upon growth in Australia, Malaysia and Thailand (with TOT’s new contract to take the rest of iPSTAR capacity in Thailand). Operating profit from iPSTAR increased 22% YoY to Bt226mn.
  Operating profit from the telephony business in Laos was stable YoY at Bt71mn. The company restated 2012A to exclude loss from discontinuing Mfone as an extra.