Is WORK still Working?

In the past three months, the share price of Workpoint Entertainment Public Company Limited (WORK) fell as much as 35.71%, 10.64% in the past month, and 5.97% in the past week.

 

The one who worried the most in this situation would be all 11,973 minor shareholders with the question “what is going on with WORK?”

 

The answer to the question is the disappointment in WORK’s financial statements in 2019. First, the disappointment in 3Q19 financial statement. The company’s profit plunged by 69% to only 44 million baht YoY. The revenue in 3Q19 also declined by 30% to 704 million baht.

For the first nine-month period, WORK reported a net profit of only 190 million baht, declined from a net profit of 423 million baht from the same period of last year.

The figure was lower than what the market had anticipated, and when the target was missed, a selloff out of panic occurred.

Meanwhile, there were no signs of recovery in 4Q19. The analyst expected WORK’s net profit for the quarter to be 28 million baht, decreased 36% QoQ.

 

Nevertheless, there are also three positive factors that could get WORK out of this slump;

1) The program schedule adjustment. It is inevitable that after “10 Fight 10” ended, there has yet to be any other programs with popularity as much as 10 Fight 10. If the upcoming program in February has a better response, it would increase WORK’s rating and earnings from advertising.

2) Lower cost from license and MUX returning to NBTC in the previous year.

3) Recognizing profit sharing from allowing RS Mall to display its items through Channel 23, started late 2019.

The analyst expected that WORK’s net profit would increase by 15% to 252 million baht YoY.

If everything goes according to the plan, investors would get a chance to see the mighty WORK again.

 

However, there are also risks in the business of digital TV. The business field has been very competitive even when seven channels decided to return the licenses last year. The change in consumer behavior that starts to turn to social media would result in lower views for digital TV, which would lead to less advertising money to the channel as advertisers prefer to spend their money on social media advertisements.

In this regard, the battle between digital TV operators has become even fiercer!

Will WORK work? The result would rely on WORK’s Chairman “Mr. Phanya Nirunkul”