TRUE and DTAC both declined dramatically on Monday following the announcement of two companies merging their operations.
At 11.45 hrs. local time in Thailand, the share price of True Corporation Public Company Limited (SET: TRUE) dropped THB0.45/share or 7.89% to THB5.25/share, with a trading value of THB2,542 million.
Meanwhile, the share price of Total Access Communication Public Company Limited (SET: DTAC) dropped THB3.00/share or 5.85% to THB48.25/share, with a trading value of THB1,194 million.
Country Group Securities stated in its analysis that the decline in the share prices of TRUE and DTAC was mainly due to the announcement of the amalgamation, and thus the prices fell to reflect this factor. And it believes the process of amalgamation will take until 1Q23, based on the Malaysian case of DiGi.com, a joint venture between Telenor and Axiata. However, there is a possibility that the process will be completed by 3Q22.
Recommend “SELL” rating on TRUE at a target price of THB5.09 per share.
TRUE reported a consolidated net loss of THB1,428.40 million for the Year 2021, representing a change of greater than 20% compared with the net results of the last year. However, the company earned a profit of THB54 million in 4Q21 for the first time since 3Q20, as revenue increased to THB1.4 billion. Despite profitability in 4Q21, Country Group still believes that TRUE’s earnings will remain negative until 2023.
