DIF Plunges 10% in Concerns over the Expiration of 10-Year Tax Exemption and Rising Finance Costs

The share price of Digital Telecommunications Infrastructure Fund (SET: DIF) plunged 10% to THB10.80 per share on Thursday, while True Corporation Public Company Limited (SET: TRUE) dropped 8.40% to THB6.00 per share and Advanced Info Service Public Company Limited (SET: ADVANC) fell 1.85% to THB212 per share.


UOB Kay Hian (UOBKH) stated by citing a  third-party source that the market was concerned on DIF due to: a) 2023 marking the end of 10-year tax exemption, resulting in unitholders requiring to pay 10% tax from the subsequent dividend payments, b) the expiry of lease contract with DTAC in Mar 24, c) rising finance cost as the fund mostly comprises of floating-rate loans and d) lower lease payment by TRUE following the amalgamation between TRUE and DTAC.

For telecommunication companies (ADVANC and TRUE), the concerns may be: a) rising finance cost, especially TRUE with D/E ratio of 4.44x and b) new NBTC’s regulations and unfavourable policies from Move Forward Party related to consumer protection. However, UOBKH believed ADVANC would face limited impact due to lower D/E of 1.1x.