Analyst Keeps PLANB’s TP at ฿5, Expecting Smart Bus Shelter to Strengthen OOH Business

KTB Securities (Thailand) (KTB) has made an analysis on Plan B Media Public Company Limited (PLANB), maintaining the “BUY” recommendation with a target price at ฿5.00/share.

 

KTB expects the “smart bus shelter” project that PLANB had signed the 10-year contract with the Traffic and Transportation Department, to generate revenue of 98 million baht and profit of 20 million baht in 2020E, while revenue and profit would reach 210 million baht and 53 million baht in 2021E. KTB as well expects the ad media utilization to improve from June, a period the lockdown policy for Bangkok is set to end, and thus net profit would rebound sharply in 2021E (+63% YoY) on the back of the full-year revenue recognition from 7-Eleven and Tokyo Olympics 2020. The stock currently trades at 2020E PER of 33.2x, which is -1.5 SD below its average level of 46.2x.

 

KTB has positive view for PLANB’s earnings outlook by giving an upside to 2020-21E earnings forecast. KTB’s estimations are based on the following assumptions:

 

1) PLANB will earmark 313.6 million baht capex for the installation of 1,120 static traffic signs, 50 digital screens. This will increase media capacity by 300 million baht from 6.8 billion baht currently.

2) The project will begin from late 2Q20 and KTB estimates the smart bus shelter’s utilization at 65-70% in 2020-21, which will provide net profit margin of 20.4-25.2%.

 

KTB has yet incorporated the project while forecast net profit to fall -29% YoY to 529 million baht in 2020 but to jump +63% YoY to 863 million baht in 2021.