KTBST Expects Significant Recovery for Media Sector in 2Q, Raising BEC as Top Pick

KTBST Securities maintained “Overweight” rating on Thai media sector, picking BEC as top pick with a target price at ฿19.00/share.

KTBST Securities (KTBST) has maintained “Overweight” rating on the media sector, picking BEC as its top pick with a target price at ฿19.00/share.


The Nielsen Company (Thailand) Ltd. has published a report, stating that the value of advertising spending in June was 7,437 million baht, representing a 13% growth YoY even with the resurgence of Covid-19, but was 3% lower when compared to the previous month.


KTBST estimated earnings of the sector in 2Q21 to turnaround with a better outlook than last year, but still 20% down when compared to the previous quarter. The increase in YoY would be due to a significant recovery of advertising spending in digital TV business (+31% YoY). On the other hand, the decrease in QoQ would be due to the impact from the Covid-19 outbreak in June to Out of Home (OOH) businesses as consumers turned to work from home, while movie theaters saw a decrease in utility rate.

Nevertheless, the Covid-19 outbreak resulted in more time of consumers spending on TV, which is the reason operators shifted their advertising budget to digital TV instead. KTBST expected earnings would be better starting 2H21 from an easing Covid-19 situation.


In addition, KTBST stated that the media sector still underperformed the SET Index by 4% in the past month. The analyst maintained “Overweight” rating on the sector, seeing potential earnings growth in 2H21, raising BEC World Public Company Limited (BEC) as its top pick with a current trading 21E PER at 30.7x, which is lower than its peers, while having an upside factor on the returning of Sorayuth Suthassanachinda, a well-known TV presenter and news reporter. In addition, BEC has a short-term catalyst from the expectation of 2Q21 earnings to reach a record high in 19 quarters, giving a target price at Bt19.00 per share.


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