Kasikorn Securities (KS) has softened its negative stance on Thaicom Public Company Limited (SET: THCOM) following a joint conference call held by Gulf Development Public Company Limited (SET: GULF) and Thaicom this morning to address the legal dispute over the transfer of concession assets to the Ministry of Digital Economy and Society (MDES).
According to KS, GULF and THCOM convened an urgent conference call on September 7 to clarify the legal dispute concerning the handover of concession-related assets to MDES.
KS outlined five key points from the call. First, of the total THB 1.3 billion claimed by MDES, only around THB 300 million relates to the value of outstanding assets, with the remainder representing opportunity cost claimed by the ministry rather than asset value itself.
Second, MDES’s right to pursue legal action against the company is set to expire on September 11, adding urgency to the government’s Cabinet approval to proceed with the claim.
Third, THCOM intends to negotiate further with MDES regarding the transfer of additional concession assets. Fourth, the company does not expect to need to set aside a provision in relation to this matter.
Fifth, KS noted that the dispute is not expected to affect the operations of the Thaicom 4 and Thaicom 6 satellites.
KS said its outlook has turned less negative following management’s clarification, noting that the potential financial impact could shrink from THB 1.3 billion (THB 1.15 per share) to just THB 300 million (THB 0.27 per share), with no expected impact on operations.
That said, the brokerage maintained a cautious stance overall, pointing out that this was an unforeseen issue that could still carry some financial consequences, even if limited in scale.
KS maintained its Neutral rating on THCOM with a target price of THB 12.47. The brokerage said that if the stock were to sell off on short-term concerns stemming from this issue, it would view that as a trading opportunity, given the likely limited financial impact and the stock’s current price levels, which are close to both book value and GULF’s investment cost in the company.
