Relative Valuation of COM7 Public Company Limited

Abstract

COM7 Public Company Limited (COM7) specializes in retailing IT products, established in 1996 within the Pantip Plaza shopping complex. With a vision for the growing IT market, the founders officially founded the company in 2004 to distribute IT products nationwide, emphasizing retail sales through Pantip Plaza complex stores. Adapting to the advantages of the retail sector, COM7 expanded its presence with branches in shopping centers and department stores. Despite challenges from the global Covid-19 pandemic, COM7 exhibited robust revenue growth over the past five years, fueled by the work-from-home trend. Year-on-year revenue grew steadily, with a notable 27% increase from 2020 to 2021. While the net profit percentage dropped slightly in 2021, the overall trend reflects positive growth. The company maintains a stable cost structure, effectively managing expenses and increasing net profit percentage each year. The current market cap for COM7 is Baht 54,719.96 million. According to the Relative Valuation method, the estimated target price by the end of 2023 is THB 16.50 per share, indicating a 33.20% downside from the latest close price on November 10, 2023, at THB 24.70 per share. Consequently, the recommendation for COM7 is “HOLD,” and a reevaluation with DCF is suggested for thorough internal analysis.