On Wednesday at 3:15 PM (Bangkok time), the share price of True Corporation Public Company Limited (SET: TRUE) fell by 6.36% or THB 0.70 to THB 10.30, with a trading value of THB 2.01 billion.
Kasikorn Securities (KS) stated that the decline in TRUE’s share price is likely an indirect effect of the establishment of the Thai ESGX Fund, which will channel funds transferred from LTF. This is due to TRUE’s current lack of ESG eligibility as the firm is considered a new company following the TRUE-DTAC merger, existing for only two years, whereas the SET ESG criteria require an eligible entity to operate for over three years.
Meanwhile, the analyst pointed out that TRUE’s fundamentals have not changed. The firm recently reorganized its management structure by appointing Mr. Sigve Brekke, the former CEO of DTAC and currently the Executive Chairman of the Telecom and Digital Business Group under Charoen Pokphand Group, as the Group CEO of TRUE. This is viewed positively for the company, as Mr. Brekke is skilled, experienced, and visionary, likely advancing the company’s telecommunications development.
Kasikorn Securities believes that eventually, TRUE’s stock price will reflect its fundamentals in the future, making any price weakness an opportunity to buy. However, the analyst maintains a ‘Hold’ recommendation for TRUE with a target price of 12.10 baht per share due to ongoing risks associated with frequency spectrum auctions.
Similarly, Yuanta Securities (Thailand) noted that TRUE is affected by the transfer of funds from LTF to the new Thai ESGX Fund. As TRUE has only merged with DTAC for two years, the company has not yet met the Thai ESGX fund criteria, leading to fund managers adjusting their portfolios by reducing TRUE holdings.
The analyst stated that the stock price of TRUE has fallen below the support level of 11.80-11.00 baht per share, prompting further selling. Nevertheless, its fundamentals remain unchanged. The stock still represents an investment opportunity, whilst the analyst suggests investors to wait for the price to stabilize.
