DTAC shares rise on better than expected quarterly results

Shares of Total Access Communication (DTAC), Thailand’s third-largest mobile services operator, climbed over 5 per cent on Monday after posting better-than-expected quarterly results, despite a broader market dive.

DTAC’s share price peaked at 31.50 baht, up 5.88 per cent, then settled at 30.75, still up 3.36 per cent during midday. This amounted to 444.25 million baht of the transaction value.

The company reported its second-quarter net profit of 1.53 billion baht, up 86 per cent from the last quarter but down 19 per cent from a year earlier. The earnings beat the market consensus by 60 per cent.

According to the statement, the performance was driven by one-time gain from network costs reversal, strong net adds in prepaid/postpaid segments, and high average revenue per user.

The report also shows a surge in international direct dial to Myanmar as workers in Thailand contacted their friends and family following the military coup.

DTAC announced an interim dividend of 1.05 baht per share for the first half of 2021, meaning a dividend yield of 3.5 per cent.

An analyst at Krungsri Securities rated ‘Buy’ on DTAC at the target price of 57 baht given the optimistic earnings from the recovery trend.

However, a KGI analyst said DTAC’s core earnings in the second half of 2021 should drop due to intense competition and lower consumer spending from the Covid-19 impact.

Market response to new-high infections

The index of the Stock Exchange of Thailand (SET) fell by 15.50 points to 1,558.87 amid concerns over surging virus cases and rising death tolls.

The SET could test 1,550-1,560 support levels on Monday amid concerns of cases dominated by the Delta variant and additional containment measures, the Krungsri analyst said.

The measures include ordering department stores to shutter and banning domestic flights, which will “have a larger impact on retailers than other business sectors,” said the analyst.

As of midday, shares of Central Pattana (CPN) and Home Product Center (HMPRO) dropped 1.47 and 1.43 per cent, respectively.

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