RS: Is It Just a Dream?

Not long ago, RS was one of the interesting shares to invest in, especially the new business, Multi-Platform Commerce (MPC) which consists of RS’s former digital TV and Music business that barely escaped from tanking to turn into the profit maker of the company by sending RS and channel 8 celebrities to be promoters. Which resulted in a huge gain of ฿172.07 million in profit in 2Q18, up ฿120 million from 2Q17.

Having MPC as the key player, the outlook for RS evidently became better than GMM Grammy Public Company Limited (GRAMMY) that is facing a continuous deficit right now, while RS has always booked more or fewer profits every year.

 

RS was looking so good that Mr. Surachai Chetchotisak, RS’s Chairman, publically said that RS’s gross profit margin would reach 60-65% by the end of this year, and also an average of 30% growth each year. While in four years, RS’s revenue would reach a milestone at ฿10 billion.

Maybe that was just a dream as right now RS’s shares are facing a huge selloff, while analysts started to reevaluate RS and estimate that its 3Q18 profit may not be as good as it should be.

 

As a matter of fact, the National Broadcasting and Telecommunications Commission (NBTC) had made a list of digital TV ranking that showed a lower rating of Channel 8 than last year, but was still able to remain in the fifth position.

RS’s MPC also missed its revenue target in 1H18 that was set at ฿3.5 billion, while RS actually earned only ฿1.1 billion. Analysts had estimated MPC’s revenue in 2018 at ฿2.4 billion, tops.

The only glimpse of light seems to be the decision of Mr. Sorat Vanichvarakij that recently bought another 1.23% of RS’s shares or around ฿200 million to hold 11.18% of RS’s shares in total.

 

Whether Mr. Sorat saw something worth investing in RS or was very confident in Mr. Surachai, we, investors, have to wait and cheer for RS’s shares.