KS Eyes TRUE-DTAC Completion in December, Raising TRUE’s Target Price to THB6.28

True Corporation Public Company Limited (SET: TRUE) on Wednesday announced that the company had disposed of 300,000,000 investment units in the Digital Telecommunications Infrastructure Fund (SET: DIF), representing approximately 2.82% of DIF’s total issued units at the price range of THB13.30–THB13.45 per share.

The disposal raised concerns of TRUE’s financial status that could potentially result in a need to sell DIF’s units. 


Kasikorn Securities (KS) estimated that TRUE will obtain Bt3.5bn from the disposal from which it will recognize an accounting gain of THB1.5 billion. Thus, raised concerns of a shortage of liquidity. 

However, the amount from disposal seems too little to change over TRUE’s stretched balance sheet, wrote KS, citing TRUE’s head of investor relations. Meanwhile, IR told KS that it is still uncertain that there will be no further disposal in the near term. 

Nevertheless, the main issue for TRUE lies with the regulators’ approval of the merger with Total Access Communication Public Company Limited (SET: DTAC). KS stated that IR was confident the merger between will go through, although the completion will likely be later than the original schedule and believed the National Broadcasting and Telecommunications Commission (NBTC) will finally endorse the merger with reasonable remedy measures.  

Following IR’s statement, KS also reiterated its 100% probability assumption the deal will go through, while further shifting the approval date to be in August-September and the deal completion time frame to be in December. 

KS stated that the stock was suppressed lately, having come off by 7.95% from last year and retreating 22.8% from its peak on February 18 due to the market’s receding confidence in the merger. 

KS expected the share price will remain under pressure in the near term on 1) concern over the Central Administrative Court’s consideration of a request to suspend the deal; 2) negative market sentiment from an upcoming public hearing; and 3) potentially more lawsuits.

Still, KS reiterated a “Buy” call on TRUE with a revised-up 2023 target price of THB6.28 per share. Likely rerating catalysts include 1) progress in regulatory consideration; and 2) the revealing of proposed synergy value of more than US$3 billion.

Lastly, the securities company noted that in the absence of a merger, the fair value for TRUE is THB3.95 (WACC 9.7%, long-term growth rate 2%).