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STOCKS NEWS THAILAND-Thaicom falls; brokers upbeat on outlook after Mfone divestment
November 14, 2012 / 8:40 AM / 5 years ago

STOCKS NEWS THAILAND-Thaicom falls; brokers upbeat on outlook after Mfone divestment

Shares in Thaicom Pcl fell 0.87 percent to 22.80 baht despite brokers seeing its weaker third-quarter earnings as only a short-term impact from a subsidiary’s loss provision.

Thaicom posted a net loss of 107 million baht ($3.49 million) for the third quarter, attributed to the loss provision of its subsidiary Mfone, whose divestment it announced on Monday. [ ID :nSETz86MTa]

Several brokers believe the divestment deal will help the company improve its earnings next year.

Broker KGI Securities rated the shares ‘outperform’ with target price at 31 baht, saying that with the departure of Mfone, the share valuation remains attractive.

“While the divestment in loss-making subsidiary Mfone caused a short-term negative impact to Thaicom’s earnings, especially in the third-quarter, this is a non-cash item and won’t adversely affect our target price,” KGI said in a note.

“However, the benefit of Mfone’s departure is that the real value of Thaicom will be unveiled in 2013,” the broker added.

Broker Bualuang Securities rated the shares ‘buy’ with target price at 33.50 baht.

“We have cut our 2012 net profit forecast by 65 percent to factor in the one-time Mfone loss provision. But we have also revised up our 2013 projection by 37 percent (to 1.17 billion baht) to factor out assumed Mfone losses from Thaicom’s consolidated income,” Bualuang said.

The divestment deal is expected to be completed by the end of this year.

The main Thai index lost 0.43 percent.

1530 (0830 GMT)

(Reporting by Sinsiri Tiwutanond in Bangkok; Editing by Jijo Jacob; sinsiri.tiwutanond@thomsonreuters.com)

($1 = 30.69 Baht)

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11:20 STOCKS NEWS THAILAND-Land and Houses hits 19-day high on Q3 profit

Shares in Land and Houses Pcl rose more than 2 percent to 9.10 baht, their highest in more than two weeks, after the company posted strong third-quarter earnings backed by sales growth and commercial estate development plans.

The country’s biggest housing developer on Tuesday reported third-quarter earnings of 1.52 billion baht ($49.54 million), a 68 percent rise over the previous year.

Broker Trinity Securities maintained its ‘buy’ rating on the shares while raising the target price to 10.50 baht from 8.80, citing the company’s plans to expand into commercial estate to back growth.

“Higher investment in condominium developments, especially into market segments outside of Bangkok, along with higher rental income from commercial retail spaces and share profits from Home Product Center, Quality Construction Products, and Quality Houses, helped to boost the company’s profit,” Trinity said in a research note.

“The sector to keep an eye on with growth potential is commercial estate, particularly retail shopping malls in the outer Bangkok area since in the next 5 years we will see several mass transit routes completed,” the broker added.

At 0415 GMT, Land and Houses was up 2.84 percent at 9.05 baht, while the broader Thai index was down 0.02 percent.

(Reporting by Sinsiri Tiwutanond in Bangkok; Editing by Anupama Dwivedi; sinsiri.tiwutanond@thomsonreuters.com)

$1 = 30.69 Baht

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