PLANB – Impact Inflation (June 21, 2022)

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We expect to start to turn to profit in 2Q22 of Bt156m from a loss of Bt42m in 2Q21. However, earnings may not be as strong as we initially expected. We therefore revised down our 2022-23 forecast by 17% on average.

Be wary of high inflation.

We had the opportunity to chat with PLANB management to update 2Q22 operations following AQUA integration from Apr 1, 2022 and the impact of higher cost of living on consumer purchasing power. The key points are as follows; i) The cost of living is rising through inflation, starting to affect the company’s operations in May. 2022 The media utilization rate (UR) declines to 54-55% in May 2022 from 58-59% in Apr 2022. The Jun’s UR is undisclosed but similar to May. If in this case the mean UR in 2Q22 would be in the range of 55% (from 52.1% in 1Q22 and against 60% guidance for the year); ii) At this UR level, AQUA has no profit and no loss. therefore has no effect on PLANB profit; iii) engagement marketing revenue increased from 1Q22 to 300 million baht due to higher revenue from iAM (or BNK) due to the company’s income from recruiting members in the new season.

We have revised down our 2022 earnings forecast by 23% and 12% in 2023.

Based on management data, we expect 2Q22 UR to average 55%, up from 52% in 1Q22, and from UR at this level we expect 2Q22 profit of 156mn, flip from a 42mn loss, up 42% qoq if 2Q22 earnings are close to our expectations. Our forecast, 1H22 earnings will account for 31% of our full-year forecast, and the 2H22 outlook does not look smooth with long-term high inflation. and pressure on consumers’ purchasing power We have therefore revised down our 2022 earnings forecast by 23% and 12% in 2023 to reflect the impact of weaker demand.

Maintain BUY recommendation but adjust TP down to 8.5 baht from 10.6 baht

We maintain our BUY rating but revised down TP to Bt8.5 from Bt10.6 to reflect a downward revision in earnings forecasts. Despite the downward TP revision, we believe that PLANB’s 2022 earnings outlook is much brighter than in the past two years (2020). -2021) We believe OOH media demand may be weaker than we initially expected. But we still see that demand is still higher than last year. The Company has higher bargaining power with customers and suppliers after the Company’s acquisition of AQUA. which is the main competitor We look at the share price falling over the past 3 months. This reflects the weaker profit trend in 2Q22 and the next period.

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