BEC Jumps 5% as KTBST Expects 2Q21 Earnings to Make a Record High in 19 Quarters

The share price of BEC rose ฿0.50/share or 4.95% to ฿10.60/share as of 10:33 local time in Thailand on May 20, 2021, with a trading  value of 443 million baht.

 

KTBST Securities (KTBST) maintained a BUY recommendation on BEC World Public Company Limited (BEC) and raised target price to Bt19.00 based on 2021E PER 44x (formerly Bt12.00 on PER 44x), reflecting a 57% improvement in 2021E earnings.

KTBST had a more positive view from yesterday’s analyst meeting (19 May 2021), key issues are as follows: 1) Management continued to expand 2021E revenue target +20% YoY, 2) SG&A expenses would decrease significantly from the restructuring and sale of investment in Tero (company with operating loss), 3) 1Q21 income would be the lowest point of the year due to the low season and 2Q21E onwards, there would be more income from simulcast and Family News 3, and 4) Currently, Global Content Licensing secured revenue of 60% of the 2021E target (500 million baht), which most of this income would be in the bottom line.

 

KTBST revised its 2021E-22 earnings forecast up to 57% and 54%, respectively, due to lower SG&A expenses to reflect lower costs from the reorganization and divestment of Tero investments. 2021E net profit was estimated at 865 million baht, which would be the first turnaround performance in 3 years and the highest profit in 5 years. KTBST believed that the market might have an opportunity to revise its forecast from SG&A expenses which is much lower than expected.

 

Currently, BEC’s share price outperformed SET +5%/ +8% in 1 and 3 months from the rebound performance. BEC is trading at a PER of 23.4x, which was below peers. KTBST raised BEC as a top pick in media sector, expecting net profit to continue growing, starting 2Q21E onward.

KTBST saw that there is a high chance that 2Q21E profit will be a new record high in 19 quarters and will continue to grow +29% YoY in 2022E. There is also an upside from the comeback of Sorayut Suthasanajinda, who had very high ratings in the past.