See disclaimer at the end of report

COMPANY UPDATE

Plan B Media PLANB TB / PLANB.BK

3 April 2015

Spectacular growth outlook Sector: Media Neutral Rating: BUY

Target Price: Bt5.10 Price (2 April 2015): Bt4.80

Key statistics

Investment thesis

Early this week, we accompanied PLANB top executives on a non-deal roadshow, the feedback during which reaffirmed our strong conviction about PLANB’s forward profitability. The firm’s robust earnings growth profile—52% net profit growth based on CAGR during 2014-16— driven by revenue and gross margin expansion, should prompt a further share-price gains. More interestingly, there is also scope for upside to its long-term earnings from future investments and M&A opportunities, as the company reiterated that it is debt-free, which should facilitate such investments without difficulty. Our BUY rating stands.

Full-year effect from new media launched in 2014 and upcoming projects—key growth drivers for 2015 Even though 2014 was not a good year for the Thai media industry, PLANB has over the past year continued to innovate and develop new products as well as explore new advertising space. These moves made the firm ready to deliver further growth this year, despite the slow pace of recovery in Thai media. The full-year effect from new media launched in 2014 will be one of the key growth drivers for 2015. In addition, the many new projects coming on line throughout 2015 will be another growth driver for the year.

Promising growth outlook for 2015

Based on the current media inventory, management targets sales growth of more than 25% YoY in 2015, which implies FY15 revenue of around Bt1.8-1.9bn and a gross profit margin of more than 38%. Year-to-date, PLANB has already secured revenue of Bt1.2bn for 2015, which should then make this year’s sales target achievable, in our view. In addition, management has set a target to keep SG&A expenses below Bt231m this year. If the firm achieves these targets, there is a 15% upside potential to our current FY15 earnings forecast of Bt345m.

Scope for earnings and value accretions … As PLANB aims to become a leading media player in ASEAN with Bt5bn revenue by 2020 by providing the most effective communication channel, the firm has set a concrete long-term growth strategy to pave the way to such a goal. Management guided that the firm is focusing on expanding its outdoor media segment, as there are opportunities to acquire or do partnership with existing local media players.

… such as likely alliance with outdoor digital media player For instance, if PLANB finally closes the market talk deal for a partnership with Hello Bangkok, this initiative should help both entities to achieve a near monooly and dominate the fast-growing outdoor digital media market. According to an industry source, Hello Bangkok’s annual revenue is around Bt400-500m. Based on general rule of thumb of a 10-50% revenue share, our analysis suggested that PLANB’s earnings would increase by 3-13% from our base case forecast and that the YE15 PEG-derived target price would increase Bt0.13-0.68 per share from our base case target price of Bt5.10.

Market cap Bt16.8bn USD0.5bn12-mth price range Bt3.9/Bt5.312-mth avg daily volume Bt60m USD1.9m# of shares (m) 3,495 Est. free f loat (%) 25.0 Foreign limit (%) 49.0

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Revenues (Btm) 1,465 1,737 2,318 2,555Net profit (Btm) 207 345 480 553EPS (Bt) 0.08 0.10 0.14 0.16EPS grow th (%) +23.1% +26.7% +35.4% +14.9%Core profit (Btm) 207 345 480 553Core EPS (Bt) 0.08 0.10 0.14 0.16Core EPS grow th (%) -29.8% +26.7% +35.4% +14.9%PER (x) 60.4 47.6 35.2 30.6PBV (x) 16.5 6.1 5.6 5.1Dividend (Bt) 0.0 0.1 0.1 0.1Dividend yield (%) 0.0 1.0 1.4 1.6ROE (%) 25.7 19.6 16.6 17.4

CG rating N/A

Suppata Srisuk Securities Fundamental Investment Analyst suppata@bualuang.co.th +66 2 618 1343

PLANB - 2

PLANB : Financial Tables – Year PROFIT & LOSS (Btm) 2013 2014 2015E 2016E 2017ERevenue 1,379 1,465 1,737 2,318 2,555Cost of sales and services (784) (942) (1,039) (1,353) (1,460)Gross profit 595 523 698 966 1,095SG&A (185) (202) (252) (359) (396)EBIT 410 322 446 606 699Interest expense (40) (55) (15) (6) (6)Other income/exp. 4 4 5 6 7EBT 374 270 436 607 700Corporate tax (82) (64) (92) (127) (147)After-tax net profit (loss) 292 207 345 480 553Minority interest 0 0 0 0 0Equity earnings from affiliates 0 0 0 0 0Extra items (125) 0 0 0 0Net profit (loss) 167 207 345 480 553Reported EPS 0.06 0.08 0.10 0.14 0.16Diluted EPS 0.06 0.08 0.10 0.14 0.16Core net profit 292 207 345 480 553Core EPS 0.11 0.08 0.10 0.14 0.16EBITDA 623 614 774 979 1,101KEY RATIOSRevenue growth (%) 36.6 6.2 18.6 33.4 10.2Gross margin (%) 43.2 35.7 40.2 41.7 42.9EBITDA margin (%) 45.1 41.9 44.6 42.2 43.1Operating margin (%) 29.7 22.0 25.7 26.2 27.4Net margin (%) 12.1 14.1 19.8 20.7 21.6Core profit margin (%) 21.2 14.1 19.8 20.7 21.6ROA (%) 9.7 8.9 12.1 13.6 14.1ROCE (%) 12.5 10.9 14.2 16.1 16.9Asset turnover (x) 0.8 0.6 0.6 0.7 0.7Current ratio (x) 0.6 0.7 3.4 3.7 4.3Gearing ratio (x) 1.1 1.7 0.0 0.0 0.0Interest coverage (x) 10.3 5.8 29.6 106.9 120.8BALANCE SHEET (Btm)Cash & Equivalent 74 61 1,064 1,478 1,984Accounts receivable 421 474 530 708 780Inventory 0 0 0 0 0PP&E-net 1,072 1,163 1,028 840 633Other assets 489 448 455 441 424Total assets 2,271 2,365 3,311 3,729 4,094Accounts payable 408 275 377 490 529ST debts & current portion 402 534 40 41 42Long-term debt 519 731 40 41 42Other liabilities 3 3 3 5 5Total liabilities 1,417 1,609 561 701 753Paid-up capital 260 260 351 352 353Share premium 426 426 2,157 2,193 2,229Retained earnings 168 70 242 482 759Shareholders equity 854 756 2,750 3,027 3,341Minority interests 0 0 0 0 0Total Liab.&Shareholders' equity 2,271 2,365 3,311 3,729 4,094CASH FLOW (Btm)Net income 167 207 345 480 553Depreciation and amortization 212 292 328 373 402Change in working capital 184 (186) 45 (64) (33)FX, non-cash adjustment & others (48) 31 (3) (6) (3)Cash flows from operating activities 515 344 714 782 919Capex (Invest)/Divest (386) (375) (175) (166) (174)Others (3) 0 (31) (2) (1)Cash flows from investing activities (388) (375) (205) (168) (175)Debt financing (repayment) 450 344 (1,155) 2 2Equity financing 461 0 1,822 37 37Dividend payment (22) 0 (172) (240) (277)Others (3) 0 (31) (2) (1)Cash flows from financing activities 889 344 494 (200) (237)Net change in cash 1,016 314 1,003 414 507Free cash flow (Btm) 130 (31) 539 616 745FCF per share (Bt) 0.0 (0.0) 0.2 0.2 0.2Key assumptions 2013 2014 2015E 2016E 2017ETransit revenue (Btm) 556 506 572 840 1,009Digital revenue (Btm) 358 447 565 824 860Static revenue (Btm) 417 470 550 599 629In-store revenue (Btm) 49 41 50 55 58Gross margin (%) 43.2% 35.7% 40.2% 41.7% 42.9%

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PLANB - 3

PLANB : Financial Tables – Quarter QUARTERLY PROFIT & LOSS (Btm) 4Q13 1Q14 2Q14 3Q14 4Q14Revenue 382 306 344 350 466Cost of sales and services (213) (206) (227) (237) (272)Gross profit 169 100 116 113 194SG&A (79) (42) (39) (47) (73)EBIT 91 58 77 66 121Interest expense (11) (13) (13) (14) (15)Other income/exp. 1 1 1 1 1EBT 81 47 65 52 107Corporate tax (19) (11) (14) (13) (26)After-tax net profit (loss) 62 36 50 39 81Minority interest 0 0 0 0 0Equity earnings from affiliates 0 0 0 0 0Extra items 0 0 0 0 0Net profit (loss) 62 36 50 39 81Reported EPS 0.02 0.01 0.02 0.02 0.03Fully diluted EPS 0.02 0.01 0.02 0.02 0.03Core net profit 62 36 50 39 81Core EPS 0.02 0.01 0.02 0.02 0.03EBITDA 203 78 192 138 206

KEY RATIOSGross margin (%) 44.3 32.7 33.8 32.2 41.7EBITDA margin (%) 53.1 25.5 55.9 39.4 44.2Operating margin (%) 23.7 19.0 22.4 18.8 26.0Net margin (%) 16.3 11.6 14.6 11.3 17.5Core profit margin (%) 16.3 11.6 14.6 11.3 17.5BV (Bt) 0.3 0.6 0.6 0.7 0.3ROE (%) 21.6 11.8 12.9 9.8 26.6ROA (%) 10.0 5.5 5.2 3.2 8.9Current ratio (x) 0.6 1.1 1.1 1.2 0.7Gearing ratio (x) 1.1 0.3 0.3 0.2 1.7Interest coverage (x) 8.1 4.6 5.9 4.6 7.9

QUARTERLY BALANCE SHEET (Btm)Cash & Equivalent 74 213 456 529 61Accounts receivable 421 621 753 810 474Inventory 0 94 156 175 0PP&E-net 1,072 307 315 309 1,163Other assets 626 1,267 2,663 2,731 598Total assets 2,271 2,888 4,899 4,907 2,365Accounts payable 408 169 207 212 275ST debts & current portion 402 438 491 322 534Long-term debt 519 11 7 6 731Other liabilities 3 80 1,562 1,651 3Total liabilities 1,417 1,324 3,335 3,191 1,609Paid-up capital 260 0 0 0 260Share premium 0 0 0 0 0Retained earnings 168 0 0 0 70Shareholders equity 854 1,563 1,544 1,686 756Minority interests 0 2 20 29 0Total Liab.&Shareholders' equity 2,271 2,888 4,899 4,907 2,365

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Company profile

Plan B Media Plc a major diversified out-of-home (OOH) media provider in Thailand, offering advertising space and air-time rental. It was established by Mr. Palin

Lojanagosin in March 2005 with an initial registered capital of Bt10m. The firm offers a wide range of OOH platforms and products to brand owners across a broad

spectrum of industries, and media buyers. PLANB offers integrated media solutions from content development to monitoring and maintenance of sites.

PLANB - 4

Outlook Early this week, we accompanied PLANB Chief Executive Palin Lojanagosin and Managing Director Dr. Pinijsorn Luechaikajohnpan on a non-deal roadshow. The feedback that we gathered reaffirmed our strong confidence in PLANB’s forward profitability.

Key discussion topics comprised: 1) progress of new projects to come on stream in 2015, 2) the firm’s outlook for 2015, 3) the firm’s long-term growth strategy and strategic direction, and 4) the firm’s financial capability to finance future investments. We have summarized the key discussion points below:

FY2014 effect of new media launched; upcoming projects—key growth drivers for 2015: Even though 2014 was not a good year for Thai media due to political unrest and economic slowdown, PLANB has continued its innovation of new products and to explore new advertising spaces over the past year. These moves made the firm ready to deliver growth this year, despite a slow recovery in the Thai media industry. The full-year effect from new media—including: 1) digital screens@MRT, 2) Chiang Mai City network project (static outdoor billboards), 3) Plan B TV project (digital outdoor media), and 4) digital outdoor media for Central branches nationwide—launched in 2014, will be one of key growth drivers for 2015.

In addition, many new projects are coming on line throughout 2015, starting with: 1) Hand grip@MRT, Hanger@MRT, and Bench@MRT in 1Q15, 2) In-mall media at Siam Paragon in 1Q15, 3) digital outdoor screens at Emporium and EmQuatier in 2Q15, 4) Flyover 2.0 project (static outdoor billboards) in 2Q15, 5) Gateway phase 2 in 2Q15, 6) POS media kiosks in 2Q15, 7) Udon Thani City network project (static outdoor billboards) in 3Q15, 8) Bus wi-fi project phase 1 (transit media) in 4Q15, and 9) Show DC project (outdoor digital media) in 4Q15. These new projects will be further growth drivers for the year.

Promising growth outlook for 2015: The ad spend of the overall Thai media industry and the Out-of-Home (OOH) market is expected to recover to with a 5-10% YoY in 2015 after a 10% and 6% contraction, respectively, last year. Moreover, with political unrest ended, PLANB expects to recoup revenue lost of at least Bt121m from its transit media (media on buses) during political upheaval in 1H14 to 2013 levels. Moreover, the full-year realization of revenue from completed projects in 2014 will increase the firm’s revenue capacity of Bt638m. Also, the projects to be launched in 2015 will increase PLANB’s revenue capacity by another Bt262m. In summary, the firm’s revenue capacity (assuming 100% utilization rate) will reach a new high of Bt2.5bn in 2015, up 24% YoY. In our view, the firm’s 2015 revenue capacity seems to be conservative, as no price increase was assumed.

Based on the current media inventory, management targets sales growth of more than 25% YoY in 2015, which implies FY15 revenue of around Bt1.8-1.9bn and a gross profit margin of more than 38%. Year-to-date, PLANB has already secured revenue of Bt1.2bn for 2015, which should then make this year’s sales target achievable, in our view. In addition, management aims to keep SG&A expenses below Bt231m this year. If the firm achieves these targets, there is a 15% upside potential to our current FY15 earnings forecast of Bt345m.

Ample investment opportunities to leapfrog growth, both organic … : PLANB aims to become a leading media player in ASEAN, with Bt5bn revenue by 2020, by providing the most effective communication channels. To achieve this goal, the firm has set a long-term growth strategy founded on growth pillars covering three areas: 1) core media, 2) adjacencies media, and 3) step-out opportunities. Firstly, for core media, the firm will focus on building strong and well diversified OOH networks by media diversification and by entering new territories. Secondly, for adjacencies, PLANB will explore opportunities in adjacencies media to enhance integration. The firm plans to expand into the high potential media segment such as online media. Lastly, for the step-out opportunities pillar, the firm will seek step-out channels to add to its portfolio to accelerate growth. It is seeking for strong potential partners to leverage its media network and a strong financial position with an aim to develop new intiative products or services such as new mobile applications.

PLANB - 5

Management said that the firm would continue to dominate the local OOH media landscape through organic and inorganic means. For its core media, PLANB has already secured concessions to install media on 3,000 new NGV buses (1,500 non-air-conditioned buses and 1,500 air-conditioned buses) of which 489 vehicles are expected to be in service this year and the remaining are expected to be in service within 2017. PLANB will also offer wi-fi services on 1,500 new air-conditioned buses. Management expects that wi-fi points will be installed on 489 buses this year and will be available on 1,500 by 2017.

In addition, there is an upside potential for the firm’s long-term growth from the expansion of MRT lines if the firm were to win the ad space concessions for new lines, such as the Blue Line extension (Bangsue-Tha Pra and Hua Lampong-Bang Kae) and the Purple Line (Bang Yai-Bang Sue). But, even under the worst-case scenario where it fails to secure any new ad space concessions from MRT, the new lines (which will have connections with the BTS, the Airport Rail Link and bus stations) will substantially increase the value of its existing ad space because a lot more passengers will be using the original core route than are at present. As such, the positive impact from new MRT lines on ridership is likely to be spectacular, which would enable PLANB to ramp up ad rates.

… and inorganic means—looking for M&A opportunities: Even though PLANB has already been one of the most diversified OOH media providers in Thailand, the company will continue to pursue growth opportunities to strengthen its leading market position. Management guided that the firm is now focusing on expanding its outdoor media segment (static billboards and digital screens), as there are opportunities to acquire or do partnership with the existing local media players.

For instance, if PLANB finally closes the market talk deal for a partnership with Hello Bangkok, the initiative should enable both entities to monopolistically dominate the fast-growing outdoor digital media market. According to an industry source, Hello Bangkok’s annual revenue is around Bt400-500m. Based on the general rule of thumb of 10-50% revenue sharing, our analysis suggested that PLANB’s earnings would increase by 3-13% from our base case forecast and that the YE15 PEG-derived target price would increase Bt0.13-0.68 per share from our base case target price of Bt5.10.

Figure 1: Scenario analysis to evaluate potential earnings accretion from potential partnership

Base case 10% 20% 30% 40% 50%

FY15 revenue (Btm) 1,737 1,782 1,827 1,872 1,917 1,962Change (%) na 2.6 5.2 7.8 10.4 12.9FY15 net profit (Btm) 345 354 363 372 381 391Change (%) na 2.7 5.4 8.0 10.7 13.4

YE15 target price (Bt) 5.10 5.23 5.37 5.51 5.64 5.78

Revenue sharing scheme

Source: Bualuang Research estimates

Potential growth from regional expansion: Not only PLANB expanding its OOH media business in Thailand, it plans to establish its regional footprint in tier-1 AEC markets including Indonesia, Malaysia, Philippines and Singapore. It sees significant market potential in OOH media, as the total OOH media market value of ASEAN is more than US$1.1bn. Management said that Indonesia would be the first priority for its regional expansion, as the firm already has PT Elang Mahkota Teknologi Tbk (Emtek), Indonesia’s second-largest media provider, as a strategic partner.

Strong financial capability for future investments: Management budgets Bt300m for committed organic projects in 2015. We think that the firm’s cash flow from operations should be more than sufficient to finance its FY15 CAPEX. Management also pointed out that PLANB is now a debt-free company, as it used some of its IPO proceeds to repay debt. As such, the healthy balance sheet coupled with the remaining proceeds from IPO should facilitate the firm’s future investments without any difficulities.

PLANB - 6

Recommendation Maintain a BUY with a YE15 target price of Bt5.10: The key messages from the non-deal roadshow reaffirmed our views regarding PLANB’s promising growth outlook. The firm’s robust earnings growth profile—a 52% net profit growth CAGR during 2014-16, driven by revenue and gross margin expansion should catalyze the share price going forward. In addition, there is a scope for upside to the firm’s long-term earnings from future investments and M&A opportunities. Valuation-wise, the share price currently trades at a FY15 PEG of 0.9x, a discount to VGI’s end-Mar 2016 PEG of 1.1x. We therefore maintain our BUY rating with a YE15 target price of 5.10, pegged to PEG of 1.0x.

PLANB - 7

Regional Comparisons

Bloomberg Price Market Cap

Code (local curr.)(US$

equivalent) 2015E 2016E 2015E 2016E 2015E 2016E 2015E 2016E 2015E 2016E

Abs-Cbn Corp ABS PM PHP61.5 1,175 21.5 14.8 n.a. n.a. 1.9 1.7 9.1 12.2 1.0 1.4Gma Network Inc GMA7 PM PHP6.7 506 19.2 13.8 16.6 32.5 n.a. n.a. 18.7 23.8 3.9 2.2Sun Tv Network Ltd SUNTV IN INR456.0 2,884 23.4 20.0 2.2 17.4 5.4 4.9 23.9 25.5 2.7 2.8Zee Entertainment Enterprise Z IN INR340.9 5,254 36.6 31.6 1.6 17.5 6.8 5.9 21.6 21.6 0.7 0.9Television Broadcasts Ltd 511 HK HKD48.1 2,717 13.1 12.4 264.3 5.1 2.5 2.4 18.8 18.2 5.5 5.8Phoenix Satellite Television 2008 HK HKD2.8 1,773 25.0 19.6 199.7 27.3 2.5 2.3 10.5 12.0 1.9 1.7Nippon Television Network 9404 JP JPY2,055.0 4,530 18.4 15.4 2.0 19.9 1.0 0.9 5.4 6.0 1.5 1.7Tokyo Broadcasting System 9401 JP JPY1,587.0 2,525 22.9 24.4 15.3 -7.1 0.7 0.7 3.1 2.9 1.2 1.3Tv Asahi Corp 9409 JP JPY2,120.0 1,922 20.1 18.0 -10.0 13.0 0.8 0.8 4.0 4.4 1.4 1.5Beijing Gehua Catv Network-A 600037 CH CNY27.2 4,664 39.5 30.9 27.3 27.3 4.2 3.7 11.0 12.5 1.0 1.2BEC World BEC TB THB41.75 2,571 21.2 20.1 -11.0 5.9 9.7 9.0 46.6 49.0 4.3 4.6GMM Grammy GRAMMY TB THB14.40 364 n.m. 28.0 n.m. n.m. 4 4 -26.5 16.1 0.0 0.0Major Cineplex Group MAJOR TB THB33.25 911 22.8 20.5 19.4 11.2 4.4 4.2 19.9 21.1 3.8 4.2MCOT MCOT TB THB15.20 322 19.6 18.2 5.7 8.0 1.4 1.3 7.1 7.5 3.8 4.1Plan B Media PLANB TB THB4.80 517 48.9 35.2 23.5 38.7 6.1 5.6 19.6 16.6 1.0 1.4RS RS TB THB16.20 501 33.5 21.1 33.3 58.8 8.4 7.1 27.1 37.7 1.8 2.8VGI Global Media VGI TB THB5.35 1,131 35 25 -36.6 39.2 7.8 4.8 32.8 23.4 2.5 3.6Workpoint Entertainment WORK TB THB43.50 559 71.6 61.7 676.6 16.0 5.7 5.4 10.5 9.2 0.7 0.8Simple average 29.0 23.9 76.9 20.7 4.3 3.8 14.6 17.8 2.2 2.3

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PLANB - 8

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