BEC Lacks Love from Institutional Investors
What is happening with BEC that causes institutional investors to keep selling the shares they are holding?
1 ธ.ค. 2561

BEC World Public Company Limited (BEC) used to be one among the most popular shares in communication stocks for institutional investors to carry in their portfolios as a safe asset. But in recent years, the communication businesses were declining, especially digital TV businesses that faced continuous losses. BEC is also dealing with decreasing revenue and less profit each year, which leads to selloffs from institutional investors.
The latest incident would be the 0.21% selloff from Franklin Templeton Investment Funds of Mark Mobius, investment guru that usually invests in EM including Thai stocks such as BEAUTY, JUBILE and hospital stocks. The 0.21% comprises of 4,142,900 shares from the total of 103,447,200 shares that Franklin Templeton Investment Funds held, leaving Franklin Templeton Investment Funds with 4.97% left in BEC.
 
Questions were raised on whether BEC had lost its attractions to institutional investors? BEC used to be the most attractive share for institutional investors during its high time, supported with a good company profile, constant revenue growth and abundant cash flow. Have institutional investors been signaling something from their selloff!?
 
The turning point of BEC seems to be during the period of changing of analog television to digital television. The question had yet to be answered whether BEC made the right choice on acquiring three licenses for three digital television channels (channel 13, 28, 33), hoping to satisfy all the needs from viewers.
Sadly, the results were not as BEC had hope, and the company had to bear the high license and MUX fees for all three channels each month, which, in return, kept pulling its revenue and profit down.
Moreover, the decreasing in advertisement on the channels were also the reason that plunged BEC’s revenue. The increasing of competitions in digital television business had taken the market shares in advertisement from BEC. The arrival of Facebook and Youtube also transformed the consumer behaviours from watching TV to social network. The high license fee and changing in consumer behaviour had caused negativity to BEC in these recent years.
 
Meanwhile, the TV rating shown that Channel 3 had been overthrown from the number 1 ranking to number 2 by Channel 7. BEC had tried to recover from the losses and mistakes by restructuring and hiring experts in business administration, but the result did not seem to be any better.
According to the financial statement, BEC once earned ฿2,982 million of profit in 2015, but the profit suddenly fell to only ฿1,218 million in 2016. Furthermore, BEC booked only ฿61 million of profit in 2017, and in 9M18, BEC had recorded ฿70 million loss in its report.
 
It is very unlikely that BEC will ever see a loss in its financial report, but it did happen. If BEC cannot recover in the fourth quarter, it will be the first year in a long time that the company will report a loss in its year-end financial report. And if that really happens, more institutional investors, one by one, would no doubt be running from BEC.
When the time comes, BEC will be only the once attractive share.  
 