Total Access Communication (DTAC TB) - · PDF fileTotal Access Communications (DTAC TB) 24 October 2014 See important disclosures at the end of this report 3 Area (BMA) and across

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Results Review, 24 October 2014

Total Access Communications (DTAC TB) Buy (Maintained) Communications - Telecommunications Target Price: THB138.00

Market Cap: USD7,500m Price: THB103.00

A Laggard Play

Macro

2.00

Risks

2.00

Growth

2.00

Value

2.00

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133

Total Access Communication (DTAC TB)Price Close Relative to Stock Exchange of Thailand Index (RHS)

2468

101214161820

Oct-

13

De

c-1

3

Feb

-14

Apr-

14

Jun-1

4

Aug-1

4

Vol m

Source: Bloomberg

Avg Turnover (THB/USD) 343m/10.7m

Cons. Upside (%) 14.6

Upside (%) 34.6

52-wk Price low/high (THB) 92.5 - 129

Free float (%) 13

Share outstanding (m) 2,368

Shareholders (%)

Telenor Asia 42.6

Thai Telco Holdings 22.4

TOT Public Company 5.6

Share Performance (%)

YTD 1m 3m 6m 12m

Absolute 5.7 2.0 (5.5) (17.0) (10.9)

Relative (12.3) 5.6 (6.3) (25.3) (16.1)

Shariah compliant

Veena Naidu License No. 24418, 66 2862 9752

[email protected]

Jeffrey Tan +603 9207 7633

[email protected]

Vikran Lumyai +66 2862 9999 Ext 2028

[email protected]

Forecasts and Valuations Dec-11 Dec-12 Dec-13 Dec-14F Dec-15F

Total turnover (THBm) 79,298 89,497 94,617 94,476 98,193

Reported net profit (THBm) 11,813 11,278 10,549 11,100 15,426

Recurring net profit (THBm) 12,270 11,235 11,843 11,100 15,426

Recurring net profit growth (%) 12.4 (8.4) 5.4 (6.3) 39.0

Recurring EPS (THB) 5.18 4.74 5.00 4.69 6.51

DPS (THB) 17.6 5.1 3.7 4.5 6.2

Recurring P/E (x) 19.8 21.6 20.5 21.9 15.7

P/B (x) 6.96 6.95 6.97 8.16 7.46

P/CF (x) 9.2 11.1 10.1 18.9 8.7

Dividend Yield (%) 17.2 4.9 3.6 4.3 6.0

EV/EBITDA (x) 8.16 9.89 8.87 8.85 7.24

Return on average equity (%) 22.8 32.3 30.2 34.4 49.5

Net debt to equity (%) net cash 73.2 74.6 178.3 160.3

Our vs consensus EPS (adjusted) (%) (14.1) 2.0

Source: Company data, RHB

Total Access Communications’ (DTAC) core 9MFY14 earnings were in line with our but behind consensus expectations. While 3Q14 revenue was weak, we think it may have bottomed out with seasonality and measures instituted to claw back market share driving a recovery in revenue momentum from 4Q14. Investors should accumulate on dips given the stock’s significant underperformance. Reiterate BUY, with a DCF-based TP of THB138.00 (34.6% upside).

An expectedly poor quarter. DTAC’s 3Q14 core earnings fell 8.3%

YoY (-14.6% QoQ), bringing 9MFY14 core earnings to THB8.85bn (+ 0.4% YoY). The results were in line with RHB’s full-year forecast, at 74%, but below the consensus estimate, at 68%. A third interim DPS of THB1.57 was declared, reflecting a payout ratio of 144%.

Prepaid cedes further share. Overall revenue slipped 2.5% YoY (-4.6%

QoQ) due mainly to stiff competition, the still-dampened consumer sentiment and a further loss in prepaid market share. The contraction in service revenue accelerated to 4.3% YoY (-4.1% QoQ) from -2.1% in 2Q14 although we suspect this is likely to have bottomed out. While mobile internet revenue (35% of service revenue) grew a robust 39% in 9MFY14, it was not compensated by the decline in short message service (SMS) (-28.4%) and voice revenue (-15.3%).

No news yet on CEO. Management said the hunt for a new CEO is still

on-going without disclosing more details.

Forecast and risks. Management has moderated its service revenue

guidance, the second in three months but maintained its EBITDA guidance. We lower our FY14/15 forecasts by 6.7% and 7.6% respectively to factor in higher depreciation and marketing expenses, while keep revenue unchanged. Key risks to our forecast are: i) weaker-than-expected macroeconomic recovery, ii) higher-than-expected competition, and iii) higher-than-expected capex.

Maintain BUY. We trim our DCF-derived FV to THB138.00 (WACC:

9.7%, TG: 1.5%) – implying a FY15 P/E of 15.7x – to reflect the lower revenue. We continue to like DTAC as it has underperformed the SET by over 15% in the last six months and, in our view, presents a good laggard play.

Total Access Communications (DTAC TB)

24 October 2014

See important disclosures at the end of this report 2

Figure 1: Results review

FYE Dec (THBm) 3QFY13 2QFY14 3QFY14 QoQ (%) YoY (%) 9MFY13 9MFY14 YoY (%) Comments

Revenue 21,372.9 21,867.9 20,844.7 (4.7) (2.5) 69,826.6 65,154.2 (6.7) Due to strong competition, weak macroeconomic sentiment and contraction in prepaid subscriber share

EBITDA 7,151.1 7,985.4 7,804.4 (2.3) 9.1 22,096.3 24,044.4 8.8

EBITDA Margin (%) 33.5 36.5 37.4 31.6 36.9 Increase 4.3pts YTD due to lower regulatory cost

Depreciation (3,501.5) (3,942.8) (4,299.2) 9.0 22.8 (9,889.0) (12,071.3) 22.1 Higher YoY due to reclassification of assets under work-in progress to 2G concession network

EBIT 3,649.6 4,042.6 3,505.3 (13.3) (4.0) 12,207.2 11,973.1 (1.9)

EBIT Margin (%) 17.1 18.5 16.8 17.5 18.4

Interest expense (212.3) (355.7) (324.5) (8.7) 52.9 (915.8) (1,033.0) 12.8

Interest income 47.3 48.5 36.2 (25.4) (23.4) 128.2 116.8 (8.9)

Associates 0.0 0.0 0.0 nm nm 0.0 0.0 nm

EI/Others (54.1) (52.9) 12.6 (123.8) (123.3) (398.3) (8.5) (97.9)

Pretax profit 3,430.5 3,682.6 3,229.5 (12.3) (5.9) 11,021.3 11,048.5 0.2

Pretax Margin (%) 16.1 16.8 15.5 15.8 17.0

Tax (683.9) (732.2) (649.2) (11.3) (5.1) (2,311.1) (2,215.1) (4.2)

Effective tax rate (%) (19.9) (19.9) (20.1) (21.0) (20.0)

Minority Interest 0.7 1.1 1.3 13.0 84.2 2.0 3.3 62.8

Net Profit 2,747.2 2,951.5 2,581.6 (12.5) (6.0) 8,712.3 8,836.7 1.4

Core Profit 2,801.3 3,004.3 2,569.0 (14.5) (8.3) 8,809.3 8,845.2 0.4 Above RHB’s forecast but below consensus

Net Margin (%) 13.1 13.7 12.3 12.6 13.6

Source: Company data, RHB estimates

Other Key Takeaways From The 3Q14 Results Call

Prepaid erosion a concern. DTAC’s management said the persistent erosion in its

prepaid subscriber base remains a concern. It cited: i) aggressive competition in the upcountry areas in porting 2G subscribers over to 3G, and ii) the practice of “flooding” the market with cheap or free 3G handsets by one of its competitors. It has nonetheless taken pro-active steps to claw back prepaid market share which includes offering unlimited voice calls to any network during 7am-11pm and tying up with over-the-top (OTT) players such as Facebook (FB US, NR).

Guidance drops further but 3Q14 revenue seen as bottoming out. DTAC has

moderated its revenue guidance for the second consecutive quarter due to the slower-than-expected recovery in consumer sentiment. It now expects service revenue (excluding interconnection charges (IC)) to come in “slightly below FY13” from “flattish growth YoY” previously. Management however believes the 2% YoY (3Q14: -4.3% YoY) contraction in service revenue for 9MFY14 is a good reflection of the underlying trend for the remaining quarter (further macroeconomic recovery) on the back of seasonality which gives us comfort that the decline in its service revenue has probably bottomed out in 3Q14. Additional THB10bn in capex. We gather from management that the recent

announcement of additional capex spending of THB10bn to roll out 6,500 new 3G/4G sites forms part of the THB13bn guided for FY14. DTAC believes the additional investments will position its network as being the best in the Bangkok Metropolitan


24 October 2014


Area (BMA) and across 30 key cities. Its management said it would continue to engage with other operators on network sharing to lower capex in the longer term. Internet for all. DTAC continued to focus on its “Internet For All” strategy to drive

stronger mobile internet adoption in Thailand, an initiative also embraced by its sister company, Digi (DIGI MK, BUY, TP: MYR6.60) in Malaysia. Some of the key areas: i) the provision of a wide array of smartphones catering to a broad spectrum of consumers, ii) the development of localized content, and iii) the monetization of data via industry partnerships. On the latter, DTAC revealed that it has inked an exclusive deal with Facebook which allows it to upsell bite-size data packages to Facebook users. DTAC is also leading the efforts to shift from the current industry practice of offering unlimited data plans with the throttling of downloads to one premised on a prescribed data allowance, with subscribers made to pay for excess data usage via the purchase of additional data credits. Regulatory updates. There were no new developments on the delayed spectrum

auction (1800MHz) exercise although management believes that the 1-year delay (the earlier revised timeline for the auction of 3Q15) appears stretched with the complicated restructuring of state-owned enterprises. DTAC sees itself in a relatively comfortable position with regards to the availability of spectrum resources to compete as its additional 1800MHz spectrum is only expiring in Oct 2018 and it is allocating 5MHz of the 2100MHz frequency for the use of 4G. Lower regulatory costs. DTAC’s regulatory fee (as a percentage of mobile service

revenue) declined to 21.6% in 3Q14 from 22.5% in the preceding quarter. We expect the regulatory fee to decline to some 15% by end-FY15, supporting a 2-year core earnings CAGR (FY14F-FY16F) of 19.7%.


24 October 2014


Figure 2: Breakdown of revenue and expenses

FYE Dec (THBm) 3QFY13 2QFY14 3QFY14 QoQ (%) YoY (%) 9MFY13 9MFY14 YoY (%) Comments

Revenue

Voice revenue 10,162.0 9,226.0 8,376.0 (9.2) (17.6) 31,895.0 27,002.0 (15.3) Voice-to-data substitution and weak macroeconomic sentiment

- Postpaid (voice) 2,791.0 2,616.7 2,607.7* (0.3) (6.6) 8,795.0 7,808.3 (11.2)

- Prepaid (voice) 7,371.0 6,609.3 5,768.3* (12.7) (21.7) 23,100.0 19,193.7 (16.9)

Value added services 5,926.0 6,869.0 7,048.0 2.6 18.9 16,300.0 20,493.0 25.7 Contributed 42% of service revenue ex. IC

- Mobile internet 4,444.5 5,426.5 5,779.4 6.5 30.0 11,817.5 16,335.2 38.2

- Messaging 533.3 412.1 422.9 2.6 (20.7) 1,824.5 1,295.3 (29.0)

- Others 948.2 1,030.4 916.2 (11.1) (3.4) 2,658.0 2,933.0 10.3

International roaming 472.0 329.0 291.0 (11.6) (38.3) 1,677.0 1,080.0 (35.6) Impacted by lower foreign tourist arrivals

Others (IDD, other fees) 830.0 922.0 923.0 0.1 11.2 2,571.0 2,801.0 8.9

Interconnection revenue 1,719.0 1,690.0 1,672.0 (1.1) (2.7) 8,870.0 5,036.0 (43.2) IC rate cut to THB0.45/min from THB1 in July 2013

Handset sales 2,242.5 2,765.0 2,483.7 (10.2) 10.8 8,427.5 8,536.7 1.3

Other operating income 22.6 66.9 50.0 (25.3) 121.0 87.7 204.0 132.5

Total revenue 21,372.9 21,867.9 20,844.7 (4.7) (2.5) 69,826.6 65,153.7 (6.7) Due mainly to the weak voice revenue

Service revenue excl. IC 17,390.0 17,346.0 16,638.0 (4.1) (4.3) 52,443.0 51,376.0 (2.0)

Expense

Cost of services

- Regulatory 5,574.0 3,911.0 3,600.0 (8.0) (35.4) 16,686.0 11,966.0 (28.3) Shift to license framework

- Network 1,045.0 1,182.0 1,196.0 1.2 14.4 2,984.0 3,482.0 16.7 2.1GHz network expansion

- Interconnect 1,620.0 1,548.0 1,572.0 1.6 (3.0) 8,464.0 4,662.0 (44.9)

- Others 868.0 1,012.0 872.0 (13.8) 0.5 3,045.0 2,728.0 (10.4)

Handset costs 2,114.0 2,900.0 2,944.0 1.5 39.3 8,134.0 9,158.0 12.6 Negative margin due to subsidy

SG&A

- Selling & marketing 1,311.0 1,508.0 1,529.0 1.4 16.6 3,093.0 4,309.0 39.3 Due to 3G migration

- General administrative 1,595.0 1,647.0 1,448.0 (12.1) (9.2) 5,061.0 4,668.0 (7.8)

- Provision for bad debt 136.0 218.0 (65.0) (129.8) (147.8) 708.0 330.0 (53.4)

Subtotal 14,263.0 13,926.0 13,096.0 (6.0) (8.2) 48,175.0 41,303.0 (14.3)

Disposal of assets (1.0) 0.0 (534.0) nm 53,300.0 (308.0) (534.0) 73.4

Other income (38.0) (40.4) (56.0) 38.7 47.4 (134.0) (184.8) 37.9

Restatement (2.2) (3.0) 534.3 (2.6) 525.1

Total 14,221.8 13,882.6 13,040.3 (6.1) (8.3) 47,730.4 41,109.3 (13.9)

EBITDA 7,151.1 7,985.3 7,804.4 (2.3) 9.1 22,096.2 24,044.4 8.8

EBITDA margin (%) 33.5 36.5 37.4 31.6 36.9

Service margin (%) 36.7 42.5 45.0 35.5 43.6

Source: Company data, * RHB estimates


24 October 2014


Figure 3: Key operating statistics

Key operating statistics 3QFY13 2QFY14 3QFY14 QoQ (%) YoY (%) Comments

Total subscribers ('000) 27,470.9 28,039.1 27,779.9 (0.9) 1.1 Due to competition in the pre-paid segment

- Postpaid 3,333.9 3,658.7 3,746.6 2.4 12.4 Primarily focused on the growing post-paid base

- Prepaid 24,137.0 24,380.4 24,033.2 (1.4) (0.4)

Total net add ('000) 239.4 (160.9) (259.2) 61.1 (208.3)

- Postpaid 111.6 58.2 88.0 51.2 (21.2)

- Prepaid 127.8 (245.5) (347.2) 41.4 (371.6)

Data subs ('000) 8,516.0 9,196.8 12,500.0 35.9 46.8 45% of total subscribers base

Smartphone subs ('000) 7,994.0 10,430.5 11,500.0 10.3 43.9 41% due to change in customer’s behavior

3G subs ('000) 4,200.0 19,100.0 19,742.8 3.4 370.1 71% migration to 3G network

Blended ARPU (THB) 209.0 203.0 197.0 (3.0) (5.7)

- Postpaid ARPU 603.0 596.0 580.0 (2.7) (3.8)

- Prepaid ARPU 157.0 147.0 141.0 (4.1) (10.2) High-valued prepaid subscribers moved to postpaid

Blended MOUs (minutes/sub/mth) (ex IC) 220.0 194.0 188.0 (3.1) (14.5) Due to a shift in consumer behavior

- Postpaid MOU 311.0 269.0 265.0 (1.5) (14.8)

- Prepaid MOU 208.0 183.0 176.0 (3.8) (15.4)

No. of base stations 15,945.0 15,988.0 16,006.0 0.1 0.4

- 2G 1800MHz 10,755.0 10,798.0 10,811.0 0.1 0.5

- 3G 850MHz 5,190.0 5,190.0 5,195.0 0.1 0.1

- 3G 2100MHz 4,765.0 10,594.0 11,280.0 6.5 136.7 >80% population coverage


Figure 4: Quarterly margin

Source: Company data, * Service margin exclude handset sales


24 October 2014


Forecasts & risks. We keep our FY145 revenue forecasts unchanged at THB94.5bn

and THB98.2bn, in response to management’s revenue guidance but we reduce our FY14/15 earnings estimates by 6.7% and 7.6% respectively to anticipate the higher depreciation and amortization (D&A) as well as sales and marketing (S&M) expenses. We believe the revenue has bottomed out with slow macroeconomic and seasonality. Key risks to our forecast are: i) weaker-than-expected macroeconomic recovery, ii) higher-than-expected competition, and iii) higher-than-expected capex.

Figure 5: Management guidance and RHB’s forecast for FY14

FY2014 Core Assumption Management guidance RHB forecast

Service Revenue ex. IC (% y-o-y) Slightly below FY13 4.62

EBITDA margin (%) 35.0 – 37.0 35.3

Capex (THBbn) 13.0 – 23.5bn 23.5bn

3G-2.1GHz subscribers (m) nm 23.0


Figure 6: An overview of the internet-for-all mission

Source: Company data

Figure 7: DTAC is directly partnered with Facebook

Source: Brandbuffet.in.th


24 October 2014


Figure 8: Quarterly voice revenue Figure 9: Quarterly non-voice revenue

Source: Company data, * Excluded International roaming & interconnection Source: Company data, * Non-voice = Value added service

Figure 10: Non-voice revenue contribution Figure 11: YoY revenue growth

Source: Company data Source: Company data

Figure 12: Average revenue per minute Figure 13: Smartphone penetration

Source: RHB, * Excluded non-voice, international roaming & interconnection Source: Company data


24 October 2014


Figure 44: P/E band and SD levels



24 October 2014


Financial Exhibits

Profit & Loss (THBm) Dec-11 Dec-12 Dec-13 Dec-14F Dec-15F

Total turnover 79,298 89,497 94,617 94,476 98,193

Cost of sales (42,390) (53,140) (53,571) (48,577) (43,530)

Gross profit 36,908 36,357 41,046 45,899 54,663

Other operating costs (20,091) (20,937) (24,685) (29,082) (32,103)

Operating profit 16,817 15,420 16,360 16,817 22,560

Operating EBITDA 27,333 26,885 30,055 33,128 40,392

Depreciation of fixed assets (10,515) (11,465) (13,695) (16,311) (17,832)

Operating EBIT 16,817 15,420 16,360 16,817 22,560

Interest expense (431) (1,119) (2,154) (2,949) (3,287)

Other non-recurring income 692 498 (370) - -

Pre-tax profit 17,078 14,800 13,837 13,869 19,273

Taxation (5,266) (3,524) (3,290) (2,774) (3,855)

Minority interests 1 2 3 6 8

Profit after tax & minorities 11,813 11,278 10,549 11,100 15,426

Reported net profit 11,813 11,278 10,549 11,100 15,426

Recurring net profit 12,270 11,235 11,843 11,100 15,426


Cash flow (THBm) Dec-11 Dec-12 Dec-13 Dec-14F Dec-15F

Operating profit 16,817 15,420 16,360 16,817 22,560

Depreciation & amortisation 10,515 11,465 13,695 16,311 17,832

Change in working capital 3,836 (140) (1,770) (14,583) (5,271)

Other operating cash flow 454 403 462 - -

Operating cash flow 31,623 27,148 28,747 18,545 35,122

Interest paid (453) (956) (1,769) (2,949) (3,287)

Dividends received 68 86 19 - -

Tax paid (4,874) (4,456) (2,936) (2,774) (3,855)

Cash flow from operations 26,363 21,821 24,061 12,822 27,980

Capex (4,976) (7,779) (10,851) (23,450) (13,450)

Other investing cash flow (306) (7,395) (818) (2,328) (1,093)

Cash flow from investing activities (5,282) (15,174) (11,668) (25,778) (14,543)

Dividends paid (7,434) (49,590) (12,687) (14,081) (12,600)

Increase in debt (4,321) 25,679 1,192 27,513 3,636

Other financing cash flow (0) (55) - - (0)

Cash flow from financing activities (11,755) (23,966) (11,495) 13,432 (8,964)

Cash at beginning of period 12,548 21,873 4,555 5,472 5,948

Total cash generated 9,326 (17,318) 897 476 4,473

Implied cash at end of period 21,873 4,555 5,452 5,948 10,421



24 October 2014


Financial Exhibits

Balance Sheet (THBm) Dec-11 Dec-12 Dec-13 Dec-14F Dec-15F

Total cash and equivalents 21,973 4,705 5,472 5,948 10,421

Inventories 384 904 1,683 2,362 2,946

Accounts receivable 6,575 8,386 10,351 12,282 13,747

Other current assets 2,193 2,975 3,598 5,669 6,874

Total current assets 31,125 16,969 21,105 26,261 33,987

Total investments 358 346 325 325 325

Tangible fixed assets 68,234 66,567 69,584 77,595 73,548

Intangible assets 19 15,128 14,756 11,748 11,412

Total other assets 4,111 2,008 1,420 3,748 4,841

Total non-current assets 72,722 84,049 86,085 93,416 90,127

Total assets 103,847 101,018 107,190 119,677 124,115

Short-term debt 1,321 8,808 8,296 11,552 10,370

Accounts payable 19,480 23,592 28,190 23,312 21,964

Other current liabilities 44,049 5,400 8,655 3,241 2,828

Total current liabilities 64,850 37,800 45,141 38,105 35,162

Total long-term debt 3,269 21,460 23,164 47,421 52,239

Other liabilities 840 6,814 4,029 4,417 4,162

Total non-current liabilities 4,109 28,274 27,193 51,838 56,401

Total liabilities 68,959 66,074 72,334 89,943 91,563

Share capital 4,736 4,736 4,736 4,736 4,736

Retained earnings reserve 4,944 5,003 4,918 (199) 2,627

Other reserves 25,191 25,191 25,191 25,191 25,191

Shareholders' equity 34,871 34,929 34,844 29,727 32,553

Minority interests 17 15 12 6 (1)

Other equity 0 (0) 0 (0) 0

Total equity 34,888 34,944 34,856 29,734 32,552

Total liabilities & equity 103,847 101,018 107,190 119,677 124,115


Key Ratios (THB) Dec-11 Dec-12 Dec-13 Dec-14F Dec-15F

Revenue growth (%) 9.6 12.9 5.7 (0.1) 3.9

Operating profit growth (%) 9.3 (8.3) 6.1 2.8 34.1

Net profit growth (%) 8.5 (4.5) (6.5) 5.2 39.0

EPS growth (%) 8.5 (4.5) (6.5) 5.2 39.0

Bv per share growth (%) (49.4) 0.2 (0.2) (14.7) 9.5

Operating margin (%) 21.2 17.2 17.3 17.8 23.0

Net profit margin (%) 14.9 12.6 11.1 11.7 15.7

Return on average assets (%) 11.6 11.0 10.1 9.8 12.7

Return on average equity (%) 22.8 32.3 30.2 34.4 49.5

Net debt to equity (%) (49.8) 73.2 74.6 178.3 160.3

DPS 17.6 5.1 3.7 4.5 6.2

Recurrent cash flow per share 11.1 9.2 10.2 5.4 11.8



24 October 2014


SWOT Analysis

Strong major shareholder in Telenor Group

Largest portfolio of spectrum in the 850MHz, 1,800MHz and 2,100MHz bands

Change in regulatory settings

Strong handset competition and data bundling activities

ARPU uplift from higher data take-up

Smartphone penetration of 30% in Thailand offers potential for stronger data revenue growth

Declining price-points of smartphones and tablets

Moderate penetration in the upcountry market

Data market share under pressure

-10%

6%

22%

38%

54%

70%

0

5

10

15

20

25

Jan

-11

Jan

-12

Jan

-13

Jan

-14

Jan

-15

P/E (x) vs EPS growth

P/E (x) (lhs) EPS growth (rhs)

0%

7%

13%

20%

27%

33%

40%

47%

53%

60%

0

1

2

3

4

5

6

7

8

9

Jan

-11

Jan

-12

Jan

-13

Jan

-14

Jan

-15

P/BV (x) vs ROAE

P/B (x) (lhs) Return on average equity (rhs)

Source: Company data, RHB Source: Company data, RHB

Company Profile Total Access Communications is the second largest mobile operator in Thailand with a GSM850 and GSM1800 network under a build-transfer-operate (BTO) concession with the Communications Authority of Thailand.


24 October 2014


Recommendation Chart

21

41

61

81

101

121

141

Oct-09 Jan-11 May-12 Aug-13

Price Close

na

Recommendations & Target Price

Buy Neutral Sell Trading Buy Take Profit Not Rated

Source: RHB, Bloomberg

Date Recommendation Target Price Price

2014-09-30 Buy 140 105

2014-05-01 Buy 140 125

2014-02-12 Buy 116 99

2013-10-30 Buy 130 113

2013-07-23 Buy 133 126

2013-04-25 Buy 122 111

2013-04-10 Buy 116 96

2013-02-11 Buy 103 88

2012-10-17 Buy 115 89

2012-05-04 Neutral 78 80

Source : RHB, Bloomberg

13

RHB Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next 12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage Disclosure & Disclaimer All research is based on material compiled from data considered to be reliable at the time of writing, but RHB does not make any representation or warranty, express or implied, as to its accuracy, completeness or correctness. No part of this report is to be construed as an offer or solicitation of an offer to transact any securities or financial instruments whether referred to herein or otherwise. This report is general in nature and has been prepared for information purposes only. It is intended for circulation to the clients of RHB and its related companies. Any recommendation contained in this report does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This report is for the information of addressees only and is not to be taken in substitution for the exercise of judgment by addressees, who should obtain separate legal or financial advice to independently evaluate the particular investments and strategies. This report may further consist of, whether in whole or in part, summaries, research, compilations, extracts or analysis that has been prepared by RHB’s strategic, joint venture and/or business partners. No representation or warranty (express or implied) is given as to the accuracy or completeness of such information and accordingly investors should make their own informed decisions before relying on the same. RHB, its affiliates and related companies, their respective directors, associates, connected parties and/or employees may own or have positions in securities of the company(ies) covered in this research report or any securities related thereto, and may from time to time add to, or dispose off, or may be materially interested in any such securities. Further, RHB, its affiliates and related companies do and seek to do business with the company(ies) covered in this research report and may from time to time act as market maker or have assumed an underwriting commitment in securities of such company(ies), may sell them or buy them from customers on a principal basis and may also perform or seek to perform significant investment banking, advisory or underwriting services for or relating to such company(ies), as well as solicit such investment, advisory or other services from any entity mentioned in this research report. RHB and its employees and/or agents do not accept any liability, be it directly, indirectly or consequential losses, loss of profits or damages that may arise from any reliance based on this report or further communication given in relation to this report, including where such losses, loss of profits or damages are alleged to have arisen due to the contents of such report or communication being perceived as defamatory in nature. The term “RHB” shall denote where applicable, the relevant entity distributing the report in the particular jurisdiction mentioned specifically herein below and shall refer to RHB Research Institute Sdn Bhd, its holding company, affiliates, subsidiaries and related companies. All Rights Reserved. This report is for the use of intended recipients only and may not be reproduced, distributed or published for any purpose without prior consent of RHB and RHB accepts no liability whatsoever for the actions of third parties in this respect. Malaysia This report is published and distributed in Malaysia by RHB Research Institute Sdn Bhd (233327-M), Level 11, Tower One, RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur, a wholly-owned subsidiary of RHB Investment Bank Berhad (RHBIB), which in turn is a wholly-owned subsidiary of RHB Capital Berhad. Singapore This report is published and distributed in Singapore by DMG & Partners Research Pte Ltd (Reg. No. 200808705N), a wholly-owned subsidiary of DMG & Partners Securities Pte Ltd, a joint venture between Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group) and OSK Investment Bank Berhad, Malaysia which have since merged into RHB Investment Bank Berhad (the merged entity is referred to as “RHBIB”, which in turn is a wholly-owned subsidiary of RHB Capital Berhad). DMG & Partners Securities Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited. DMG & Partners Securities Pte Ltd may have received compensation from the company covered in this report for its corporate finance or its dealing activities; this report is therefore classified as a non-independent report. As of 22 October 2014, DMG & Partners Securities Pte Ltd and its subsidiaries, including DMG & Partners Research Pte Ltd do not have proprietary positions in the securities covered in this report, except for: a) - As of 22 October 2014, none of the analysts who covered the securities in this report has an interest in such securities, except for: a) Total Access Communications Special Distribution by RHB Where the research report is produced by an RHB entity (excluding DMG & Partners Research Pte Ltd) and distributed in Singapore, it is only distributed to "Institutional Investors", "Expert Investors" or "Accredited Investors" as defined in the Securities and Futures Act, CAP. 289 of Singapore. If you are not an "Institutional Investor", "Expert Investor" or "Accredited Investor", this research report is not intended for you and you should disregard this research report in its entirety. In respect of any matters arising from, or in connection with this research report, you are to contact our Singapore Office, DMG & Partners Securities Pte Ltd Hong Kong This report is published and distributed in Hong Kong by RHB OSK Securities Hong Kong Limited (“RHBSHK”) (formerly known as OSK Securities Hong Kong Limited), a subsidiary of OSK Investment Bank Berhad, Malaysia which have since merged into RHB Investment Bank Berhad (the merged entity is referred to as “RHBIB”), which in turn is a wholly-owned subsidiary of RHB Capital Berhad.

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RHBSHK, RHBIB and/or other affiliates may beneficially own a total of 1% or more of any class of common equity securities of the subject company. RHBSHK, RHBIB and/or other affiliates may, within the past 12 months, have received compensation and/or within the next 3 months seek to obtain compensation for investment banking services from the subject company. Risk Disclosure Statements The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. Past performance is not a guide to future performance. RHBSHK does not maintain a predetermined schedule for publication of research and will not necessarily update this report Indonesia This report is published and distributed in Indonesia by PT RHB OSK Securities Indonesia (formerly known as PT OSK Nusadana Securities Indonesia), a subsidiary of OSK Investment Bank Berhad, Malaysia, which have since merged into RHB Investment Bank Berhad, which in turn is a wholly-owned subsidiary of RHB Capital Berhad. Thailand This report is published and distributed in Thailand by RHB OSK Securities (Thailand) PCL (formerly known as OSK Securities (Thailand) PCL), a subsidiary of OSK Investment Bank Berhad, Malaysia, which have since merged into RHB Investment Bank Berhad, which in turn is a wholly-owned subsidiary of RHB Capital Berhad. Other Jurisdictions In any other jurisdictions, this report is intended to be distributed to qualified, accredited and professional investors, in compliance with the law and regulations of the jurisdictions. DMG & Partners Research Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next 12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage DISCLAIMERS This research is issued by DMG & Partners Research Pte Ltd and it is for general distribution only. It does not have any regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this research report. You should independently evaluate particular investments and consult an independent financial adviser before making any investments or entering into any transaction in relation to any securities or investment instruments mentioned in this report. The information contained herein has been obtained from sources we believed to be reliable but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions and views expressed in this report are subject to change without notice. This report does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities. DMG & Partners Research Pte Ltd is a wholly-owned subsidiary of DMG & Partners Securities Pte Ltd, a joint venture between OSK Investment Bank Berhad, Malaysia which have since merged into RHB Investment Bank Berhad (the merged entity is referred to as “RHBIB” which in turn is a wholly-owned subsidiary of RHB Capital Berhad) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group). DMG & Partners Securities Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited. DMG & Partners Securities Pte Ltd and their associates, directors, and/or employees may have positions in, and may effect transactions in the securities covered in the report, and may also perform or seek to perform broking and other corporate finance related services for the corporations whose securities are covered in the report. This report is therefore classified as a non-independent report. As of 22 October 2014, DMG & Partners Securities Pte Ltd and its subsidiaries, including DMG & Partners Research Pte Ltd, do not have proprietary positions in the subject companies, except for: a) - As of 22 October 2014, none of the analysts who covered the stock in this report has an interest in the subject companies covered in this report, except for: a) Total Access Communications DMG & Partners Research Pte. Ltd. (Reg. No. 200808705N)

Kuala Lumpur Hong Kong Singapore

Malaysia Research Office

RHB Research Institute Sdn Bhd Level 11, Tower One, RHB Centre

Jalan Tun Razak Kuala Lumpur

Malaysia Tel : +(60) 3 9280 2185 Fax : +(60) 3 9284 8693

RHB OSK Securities Hong Kong Ltd. (formerly known

as OSK Securities Hong Kong Ltd.)

12th Floor

World-Wide House 19 Des Voeux Road Central, Hong Kong

Tel : +(852) 2525 1118 Fax : +(852) 2810 0908

DMG & Partners

Securities Pte. Ltd. 10 Collyer Quay

#09-08 Ocean Financial Centre Singapore 049315

Tel : +(65) 6533 1818 Fax : +(65) 6532 6211

Jakarta Shanghai Phnom Penh

PT RHB OSK Securities Indonesia (formerly known as

PT OSK Nusadana Securities Indonesia)

Plaza CIMB Niaga 14th Floor

Jl. Jend. Sudirman Kav.25 Jakarta Selatan 12920, Indonesia

Tel : +(6221) 2598 6888 Fax : +(6221) 2598 6777

RHB OSK (China) Investment Advisory Co. Ltd.

(formerly known as OSK (China) Investment Advisory Co. Ltd.)

Suite 4005, CITIC Square 1168 Nanjing West Road

Shanghai 20041 China

Tel : +(8621) 6288 9611 Fax : +(8621) 6288 9633

RHB OSK Indochina Securities Limited (formerly

known as OSK Indochina Securities Limited)

No. 1-3, Street 271 Sangkat Toeuk Thla, Khan Sen Sok

Phnom Penh Cambodia

Tel: +(855) 23 969 161 Fax: +(855) 23 969 171

Bangkok

RHB OSK Securities (Thailand) PCL (formerly known

as OSK Securities (Thailand) PCL) 10th Floor, Sathorn Square Office Tower

98, North Sathorn Road,Silom Bangrak, Bangkok 10500

Thailand Tel: +(66) 2 862 9999

Fax : +(66) 2 108 0999

Thai Institute of Directors Association (IOD) – Corporate Governance Report Rating 2014

Excellent

ADVANC BCP CPF ERW IVL NKI PS ROBINS SCB SNC TCAP TMB UV AOT BECL CPN GRAMMY KBANK NOBLE PSL RS SCC SPALI THAI TNITY VGI ASIMAR BKI CSL HANA KKP PAP PTT S&J SCSMG SPI THCOM TOP WACOAL BAFS BROOK DRT HEMRAJ KTB PG PTTEP SAMART SE-ED SSI THRE TRC BANPU BTS DTAC ICC LPN PHOL PTTGC SAMTEL SIM SSSC TIP TRUE BAY CIMB EASTW INTUCH MCOT PR QH SAT SIS SVI TASCO TTW BBL CK EGCO IRPC MINT PRANDA RATCH SC SITHAI SYMC TKT TVO

Very Good

2S AYUD CNT GL KKC MBK OISHI SABINA STANLY TK TTCL zZMICO ACAP BEC CPALL GLOW KSL MBKET PB SAMCO STEC TLUXE TUF AF BFIT CSC GOLD KWC MFC PDI SCCC SUC TMILL TWFP AHC BH DCC GSTEL L&E MFEC PE SCG SUSCO TMT TYM AIT BIGC DELTA GUNKUL LANNA MODERN PF SEAFCO SYNTEC TNL UAC AKP BJC DTC HMPRO LH MTI PJW SFP TASCO TOG UMI AMANAH BLA ECL HTC LHBANK NBC PM SIAM TCP TPC UMS AMARIN BMCL EE IFEC LHK NCH PPM SINGER TF TPCORP UP AMATA BWG EIC INET LIVE NINE PPP SIRI TFD TPIPL UPOIC AP CCET ESSO ITD LOXLEY NMG PREB SKR TFI TRT UT APCO CENTEL FE JAS LRH NSI PRG SMT THANA TRU VIBHA APCS CFRESH FORTH JUBILE LST NWR PT SNP THANI TSC VIH ASIA CGS GBX KBS MACO OCC PYLON SPCG THIP TSTE VNG ASK CHOW GC KCE MAJOR OFM QTC SPPT TICON TSTH VNT ASP CM GFPT KGI MAKRO OGC RASA SSF TIPCO TTA YUASA *** PHATRA was voluntarily delisted from the Stock Exchange of Thailand effectively on September 25,2012

Good

A BCH CRANE FPI IT MBAX PICO SGP TBSP TPP WIN AAV BEAUTY CSP FSS JMART MDX PL SIMAT TCCC TR WORK AEC BGI CSR GENCO JMT PRINC POST SLC TEAM TTI AEONTS BLAND CTW GFM JTS MJD PRECHA SMIT TGCI TVD AFC BOL DEMCO GJS JUTHA MK PRIN SMK TIC TVI AGE BROCK DNA GLOBAL KASET MOONG Q-CON SOLAR TIES TWZ AH BSBM DRACO HFT KC MPIC QLT SPC TIW UBIS AI CHARAN EA HTECH KCAR MSC RCI SPG TKS UEC AJ CHUO EARTH HYDRO KDH NC RCL SRICHA TMC UOBKH AKR CI EASON IFS KTC NIPPON ROJNA SSC TMD UPF ALUCON CIG EMC IHL KWH NNCL RPC STA TMI UWC ANAN CITY EPCO ILINK LALIN NTV SCBLIF SUPER TNDT VARO ARIP CMR F&D INOX LEE OSK SCP SVOA TNPC VTE AS CNS FNS IRC MATCH PAE SENA SWC TOPP WAVE BAT-3K CPL FOCUS IRPC MATI PATO SF SYNEX TPA WG *** CIMBI was voluntarily delisted from the Stock Exchange of Thailand effectively on September 25, 2012. Source: Thai Institute of Directors (IOD)

IOD (IOD Disclaimer)

การเปิดเผลผลการส ารวจของสมาคมส่งเสริมสถาบันกรรมการบรษิัทไทย (IOD) ในเรื่องการก ากับดูแลกิจการ (Corporate Governance) นี้เป็นการด าเนินการตามนโยบายของส านักงานคณะกรรมการก ากับหลักทรัพย์และตลาดหลักทรัพย์ โดยการส ารวจของ IOD เป็นการส ารวจและประเมินจากข้อมูลของบรษัทจดทะเบียนในตลาดหลักทรัพย์แห่งประเทศไทยและตลาดหลกัทรัพย์เอ็มเอไอ ที่มีการเปิดเผยต่อสาธารณะและเป็นข้อมูลที่ผูล้งทุนทั่วไปสามารถเข้าถงึได้ ดังนั้นผลส ารวจดังกล่าวจึงเป็นการน าเสนอในมุมมองของบุคคลภายนอกโดยไม่ได้เป็นการประเมินการปฏิบัติและมิได้มีการใช้ข้อมูลภายในในการประเมิน

อนึ่ง ผลการส ารวจดังกล่าว เป็นผลการส ารวจ ณ วนัที่ปรากฎในรายงานการก ากับดแูละกิจการบริษัทจดทะเบียนไทยเท่านั้น ดังนั้นผลการส ารวจจึงอาจเปลี่ยนแปลงได้ภายหลังวันดังกล่าว ทัง้นี้บริษัทหลักทรัพย์ อาร์เอสบี โอเอส เค จ ากัด (มหาชน) มิได้ยืนยันหรือรับรองถึงความถูกต้องของผลการส ารวจดงักล่าวแต่อย่างใด

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Total Access Communication (DTAC TB) - · PDF fileTotal Access Communications (DTAC TB) 24 October 2014 See important disclosures at the end of this report 3 Area (BMA) and across