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DTAC (SELL/TP: 107), Expect 1Q14 normalized earnings to be flat Q-Q, but fall 13% Y-Y




Finansia Syrus Securities Plc


03 Apr 2014





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DTAC (SELL/TP: 107), Expect 1Q14 normalized earnings to be flat Q-Q, but fall 13% Y-Y Our forecasts call for DTAC's 1Q14 normalized earnings to be unexciting (flat Q-Q, -13% Y-Y). Such unimpressive forecasts should be blamed on (1) negative impact from slowing economy and rising competition, and (2) increasing network cost and marketing expenses. With this outlook, we maintain our 2014E normalized earnings (+9% Y-Y). In 1H14, normalized earnings are likely to slow owing to declining growth for service revenue and a rise 3G network installation cost. DTAC has already rallied to reflect 1Q14E DPS. It now trades above our 2014 TP of Bt107 (DCF) and implies a high 2014 PE of 21.3x. Hence, we lower our rating on DTAC to SELL from HOLD. Moreover, we recommend that investors switch to INTUCH (2014 TP Bt102) in the light of larger upside.

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