Kiatnakin Phatra Securities (KKPS) maintains a “Buy” rating on Plan B Media PCL (SET: PLANB), pegging the price objective at THB 9.00, with the current trading price at THB 5.75.
Following the fourth quarter 2024 financial results and the announcement of three critical transactions, KKPS has adjusted its profit forecasts for 2025 and 2026 upwards by 3% and 11%, respectively. Despite an anticipated 7% increase in the number of shares due to a private placement, the 2025/2026 earnings per share (EPS) estimates reflect an alteration of less than 5%. These revised estimates align within a 5% variance of the Bloomberg consensus.
While KKPS identifies the new assets as accretive to earnings and anticipates their inclusion in PLANB’s 2025-26E guidance, it predicts a reduced gross profit contribution from existing media assets, largely attributable to weak domestic consumption. Notably, the board of directors at PLANB and ROCTEC, owner of Hello LED, have sanctioned these transactions. The shareholder meetings for PLANB and ROCTEC are slated for April 29.
New media assets are anticipated to play a crucial role in driving profitability in the coming years. KKPS forecasts an expansion of PLANB’s media asset capacity by 68% by 2026, with more than half attributed to train and station media, followed by expansions in skytrain column lightboxes, and existing asset capacity expansion. The new media assets are expected to operate at a lower utilization rate of 52% compared to PLANB’s existing rate of 79%. KKPS anticipates PLANB will strategically bundle these new assets with existing ones to capitalize on broader coverage, enhancing utilization rates to 55% and 61% in 2026 and 2027, respectively.
For existing assets, KKPS forecasts moderate growth. The firm adjusted its gross profit estimates for these operations down by 5% and 7% for 2025 and 2026, respectively. This downgrade reflects higher-than-anticipated service costs in 2024 and cautious revenue projections amid subdued consumer spending. KKPS now expects the existing business’ gross profit to grow by 2% and 6% in 2025 and 2026. These assumptions slightly exceed Plan B’s guidance, which surpassed its 2024 benchmarks.
PLANB’s guidance includes a minimum 50% payout, which KKPS assumes will be maintained in 2025 and 2026. KKPS foresees PLANB returning to a net cash status by 2026, positioning it to consider a payout higher than 50%.
KKPS’ price objective remains steady at THB 9.00, employing an average target P/E fair value and target EV/EBITDA fair value to determine the price objective. The “Buy” rating is reiterated, driven by robust 11% and 17% projected earnings growth for 2025 and 2026.
