Media Sector

Media Sector
- NBTC schedules Digital-TV auction date, sorting by highest initial price
Yesterday (23 September), Colonel Natee Sukonrat revealed that the conference board
would schedule four consecutive days for Digital-TV channels auction, one channel for
each day. The channels with the highest initial price would be bid first; the orders are as
follow: 1. Variety HD (B1,510m) 2. Variety SD 3. News channels (B220m) 4. Children
channels (B140m). The exact date and location will be announced 15 day prior to the
auction. The document will be informed after purchasing envelopes on 15 October, and
the application dates are 28-29 October. MUX fee would be announced 30 day prior to
the auction. The soonest for the auction to take place is in mid-December 2013, within
mid-January.
- Entrepreneurs with strong capital and content to win auction
Scheduling auction day for the channels with most expensive initial price first would help
small-medium entrepreneurs with strong capital and content win the auction. Large
entrepreneurs would focus on one Variety HD channel, while buying envelopes for
Variety HD channel and Variety SD, so there would be less competition. There are 17
envelopes for Variety SD (7 channels), and news channels can't be bid along with
Variety HD.
Original free analog-signal TV entrepreneurs are likely to face fierce competition, as new
entrepreneurs are seizing advertisement revenue. However, with BEC and MCOT's
capital, they are likely to win the auction for at least 2 channels (Variety HD and Variety
SD). This would boost their service potential, especially for BEC with strong capital and
content. Moreover, BEC's original concession contact has still covered BEC analog-signal
channels until 2020, enabling BEC to reach more audiences than new entrepreneurs.
MCOT's content is not as strong as BEC. Though MCOT provides network system, the
business would take 5 years to make a breakeven.
New entrepreneurs (RS, WORK, GRAMMY, NBC) benefit from increase in advertisement
revenue on Digital TV. However, the network and network receivers need to be
expanded, so the entrepreneurs need to rent for satellite network to broadcast satellite
channels to maintain audience base until digital-TV network covers 50% of household
nationwide. We believe that new entrepreneurs would not make a breakeven in first two
or three years. However, RS and WORK are the most outstanding for their strong
capital, with 0.3x debt-to-equity ratio. RS bids for Variety SD to advance from satellite
TV business. Moreover, RS has right to broadcast 2014 World Cup, implicitly boosting its
profit base. WORK bids for Variety SD, and WORK has strong content for variety channel
from Workpoint TV.
- "NEUTRAL". Media top picks: BEC, RS
We believe that digital-TV channels that would be broadcast on March 2014 might boost
advertisement revenue significantly next year. We recommend "NEUTRAL" and "BUY"
for BEC(FV@B78), as it has the strongest content and audience base, keeping its growth
at 20% and likely to grow further in 2014 from new digital-TV channel. We recommend
"BUY" for RS([email protected]), as its strong content and success in satellite TV channels have
boosted FY2013 net profit growth by 51%, likely to grow by 63% in FY2014 due to
support from right to broadcast 2014 World Cup, implicitly boosting its profit base. We
recommend "BUY" to speculate for WORK(FV@B38), as it has strong content and
experience on entertainment variety, as well as 30% upside, but its FY2013 earnings is
not as blissful as BEC and RS.