On Thursday at 3:25 AM (Bangkok time), the share price of True Corporation Public Company Limited (SET: TRUE) soared by 3.70% or THB 0.40 to THB 11.20, with a trading value of THB 1.58 billion.
TRUE, under CP Group, is anticipated to be one of the firms applying for a Virtual Bank license in Thailand to the Bank of Thailand (BOT), with the submission deadline set for today, September 19, 2024. This development has instilled optimism among investors, leading to an increase in share prices for companies linked to this initiative, including TRUE, GULF, and BTS. However, bank stocks are facing downward pressure due to the Federal Reserve’s recent decision to reduce interest rates.
Earlier reports indicated that TRUE was in discussions with Ant Group to establish a consortium to apply for the license. Subsequently, there were reports suggesting that the company was in talks with Kiatnakin Phatra Bank Public Company Limited (SET: KKP) instead, as partnering with a local commercial bank like KKP would provide TRUE with a more favorable operational environment.
However, KKP later refuted the report, clarifying that they were not considering an investment in Virtual Banking. The bank also mentioned that there were no ongoing discussions regarding a partnership with CP Group or any other entities on this particular venture. As a result, uncertainties persist regarding whether TRUE (CP Group) will proceed with the application for the license independently or seek collaboration with other firms.
Krungsri Securities (KSS) anticipates a favorable outlook for TRUE’s earnings report in the third quarter of 2024, despite it being the low season. The company is projected to achieve a core profit of THB 2.1 billion, marking a significant turnaround from the loss of THB 1.6 billion reported in the same period the previous year.
Additionally, an uptick in profit is expected in the fourth quarter of 2024 due to the peak season of the business and a boost by iPhone 16 sales. The analyst has recommended a ‘BUY’ rating for TRUE, setting a target price of THB 13.20 per share.
