True Corporation has shown signs of a turnaround following the release of higher-than-anticipated core profit figures in the first quarter of the current fiscal year. This development came on the heels of True Corporation’s merger with former competitor, DTAC (Total Access Communication Public Company Limited).
While the company’s net profit in the first quarter of 2023 was boosted by gains from foreign exchange and insurance settlements, it saw a contraction of nearly 500 million baht in core profit during the same period. In contrast, the first quarter of 2024 recorded a core profit of almost 800 million baht. However, after factoring in a 1,570 million baht impairment charge related to network modernization, True Corporation reported a net loss of 769 million baht for the quarter.
Despite the net loss, the company’s normalized profit in the first quarter surpassed analyst expectations, who had predicted a loss ranging from 800 to 900 million baht. The positive performance was attributed to reductions in selling, general, and administrative expenses, along with robust revenue growth, particularly in the mobile and fixed broadband segment.
This impressive outcome prompted a significant upward revision in estimates by Kiatnakin Phatra Securities (KKPS). The brokerage firm revised their 2024 forecasts from 437 million baht to 3,408 million baht and their 2025 forecasts from 3.5 billion baht to 6.7 billion baht. Additionally, KKPS raised the target price per share from THB9.50 to THB10.50.
KKPS highlighted that TRUE’s EBITDA margin is nearing that of ADVANC (47.4% compared to 52.1% in the first quarter of 2024), anticipating that TRUE will close this gap by 2026. The brokerage firm expressed confidence in the company’s strong earnings growth, largely influenced by industry consolidation, which they believe will act as a catalyst for its share price. KKPS reiterated its “BUY” rating on True Corporation..
