The share price of True Corporation Public Company Limited (SET: TRUE) bounced back on Thursday, following a 3.6% drop in prior session due to concerns over being excluded from ThaiESG X fund and the spectrum auction.
Maybank Securities Thailand (MST) has reiterated its buy rating on TRUE Corporation, setting a target price of THB14.2 per share.
The launch of Thai ESGx, which provides tax-advantaged investment options for long-term equity funds focused on sustainability, has stirred turbulence for TRUE. The ESGx mandates require 80% of its net asset value to be allocated in stocks with credible environmental, social, and governance (ESG) ratings.
However, TRUE currently lacks an ESG rating due to its inability to meet the eligibility criteria set by the Stock Exchange of Thailand (SET). With limited operational history of only two years old following the amalgamation with DTAC—it falls short of the ESG qualification that demands a demonstration of positive net profits and dividends over three of the last five years.
Despite this, MST notes that a shift is on the horizon, as the ESG rating methodology is set to transition to FTSE Russell’s ESG Data Model in 2026. This change focuses solely on ESG metrics, which could potentially open the door for TRUE to earn the necessary rating.
Concurrently, the Thai Consumers Council has weighed in, urging the National Broadcasting and Telecommunications Commission (NBTC) to postpone an upcoming spectrum auction. The call to delay challenges the auction’s lack of competition and absence of consumer safeguards, but MST believes the likelihood of a postponement remains minimal. The impending expiration of NT’s spectrum licences in August 2025 entails legal complexities that NBTC will likely seek to avoid.
MST downplays the impact of the auction delay news, describing it as market noise. Concerns about duopolistic market conditions have been repeatedly expressed since talks of TRUE’s merger with DTAC in late 2021. Conversely, the uncertainty surrounding TRUE’s ESG compliance could weigh on its stock price in the near term.
Overall, MST maintains a positive outlook on TRUE, forecasting a significant 82% core profit growth for fiscal year 2025. This optimism is bolstered by anticipated synergy benefits from its merger and potential earnings upside due to easing competition early next year and substantial tax loss provisions.
