Total Access Communication

Total Access Communication Plc (DTAC)

Q1 2013F: core to rise 3% YoY to Bt3.1bn. DTAC is expected to post core profit of
Bt3.1bn in 1Q13F, up 3% YoY and 20% QoQ, thanks to the continued robust growth of
non-voice revenue, which is expected to rise 45% YoY to Bt4.8bn or 28% of core service
revenue excluding IC, mainly from the popularity of smartphones and social media; the
cut in corporate tax rate to 20% from 23% also gives an assist. Core voice revenue is not
expected to grow much, stable YoY and +2% QoQ to Bt11.1bn.
To launch 3G-2.1GHz in late 2Q13. DTAC plans to launch 3G-2.1GHz service in late
2Q13, with start-up costs expected to begin in 2Q13. Earnings for 2Q-3Q13 are likely to
be pressured by 3G start-up costs while the migration of subscribers to 3G-2.1 GHz
license from 2G concession will still be in early stages. Therefore, we expect 2013F
earnings to be similar to last year (up only 1%) before a 24% jump in 2014F.
Maintain Buy and Bt105 TP. DTAC price still lags peers, up 7% YTD vs. ADVANC’s 10%
and TRUE’s 42% while it is likely to get the most benefit in terms of regulatory cost
savings from the 3G-2.1 GHz license since it pays the most in revenue sharing of 30%
compared to ADVANC’s average of 25%. With expected total return of 16% (11% price
upside to 2013 DCF-derived TP of Bt105 and 5% dividend yield), we maintain Buy.