November 16, 2006 Thursday

ITD reported a terrible 3Q06 net loss of Bt1.8bn, down from a net profit of Bt263mn in 3Q05 and Bt178mn in 2Q06. Provision for loss on the construction of a project in India and the loss provision for asset impairment were the main reasons.
In 3Q06, ITD set a provision of Bt758mn for loss on the construction of Kol Dam Hydroelectric Power project in India due to the increase in costs from delays in construction and increase in material and labor costs for the project.
Despite its huge losses of Bt1.8bn, the share price should be driven by its stronger 2007 outlook, given its dominant chance of winning the upcoming mass transit biddings.
A 2007 target is derived at Bt7.1 based on the Discount Cash Flow method, implying 07PE of 20.0x and 07PB of 1.7x. However, valuation offers no current upside. As such, ITD is downgraded from Outperform to Neutral for the counter.

(KGI Securities (Thailand): 15 November 2006)