Thaicom

Thaicom Plc (THCOM) 

 

Thaicom 8 to launch in June   

 

We maintain our Outperform rating on THCOM with a target price of Bt37.8. Following a visit to the company, we believe THCOM should be able to launch Thaicom 8 by mid-2016, in line with our previous expectations. While the revenue outlooks for Africa and the NBN contract extension remain uncertain, they should not have an impact on our earnings forecast and valuation. Though THCOM’s satellite service added no new clients in 1Q16 and will likely report a small drop QoQ on seasonal factors, it should report strong YoY growth. We believe the market is overly concerned with regulatory issues and THCOM’s ability to expand its satellite service. Our valuation does not assume any new satellites beyond Thaicom 8. THCOM is trading at PER of 14.4 in 2016 and 13.5x in 2017, between -1SD (17.1x) and -2SD (10.2x) for the 3 year average multiple and an EV/EBITDA of 5.9x in 2016 and 5.1x in 2017, which was close to -2SD (5.3x) for the 3-year average multiple.