Thailand’s Newly Minted Top Mobile Firm Set for Trading Debut

Patpicha Tanakasempipat, Bloomberg News

True Corp.'s True Move 3G sim cards are displayed for sale at a promotional booth in Bangkok, Thailand Photographer: Dario Pignatelli/Bloomberg , Bloomberg

(Bloomberg) -- True Corporation Pcl, created through a merger between Thailand’s number two and three mobile phone operators, was valued at almost $9 billion after its shares began trading in Bangkok on Friday.

The shares ended at 8.60 baht in Bangkok, giving the firm a market value of 297 billion baht ($8.6 billion), with 785 million shares changing hands.

With Thai authorities approving the merger of True and Total Access Pcl this week, the new company with 55 million mobile subscribers ended the long reign of Advanced Info Service Pcl as the largest telecom company in Southeast Asia’s second-biggest economy. Advanced Info, backed by Singapore Telecommunications Ltd., ended last year with a total of 46 million mobile users.

Advanced Info shares closed 0.5% higher at 203 baht, valuing the company at 604 billion baht, more than double the market capitalization of True, according to data compiled by Bloomberg.

The listing marked the culmination of a consolidation process that began more than a year ago and drew protests from consumer groups and its main rival.

True shares have an implied fair value of 10.32 baht each, Kasikorn Securities Pcl said in a report Thursday. Krungsri Securities Pcl has set a price target of 10 baht, citing the combined entity’s better earnings prospects from likely easing of pricing competition.

True will book a profit from the first year of merger and it will be higher than the combined earnings of the separate entities, Krungsri analyst Phatipak Navawatana said in a report. Earnings will be underpinned by improving revenues and a reduction in costs, especially depreciation charge after writing-off several duplicate assets, he said.

CP Group, China Mobile

The merged entity’s enterprise value was about $20.7 billion, according to Jorgen Arentz Rostrup, True’s vice chairman and a nominee of Telenor AS, which owns about 30% in the company. Thai conglomerate CP Group will also hold about 30% in the new company and China Mobile Ltd. about 10%, with the rest being held by minority shareholders.

The new telecom-tech company will combine the best of True and Total Access and the global expertise of its shareholders, True Corporation said in a statement, adding it will also benefit from synergies within its network, digital infrastructure, IT systems, purchasing, sales and marketing, retail channels and operational costs.

“Thai consumers will benefit from this amalgamation. The synergy will lead to fair and balanced competition, which is ultimately in customers’ interest,” True’s Chief Executive Officer Manat Manavutiveth said in the statement.

The new company, together with partners, will raise $200 million in venture capital to invest in digital startups to help accelerate and stimulate growth in Thailand’s digital ecosystem, True said.

(Updates shares throughout.)