Analysts maintained their “buy” rating on Advanced Info Service Pcl. (SET: ADVANC), with a target price as high as THB250.00, in light of the company’s improved core earnings in 1Q23 and its promising earnings outlook for 2023.
For the first three months of 2023, ADVANC reported revenue of THB46,712 million, up 3.2% YoY, and a net profit of THB 6,757 million, up 5.7% YoY, both of which were in line with market expectations. Core service revenue for 1Q23 was THB 33.5 billion, up 2.3% YoY. Mobile revenue dropped 0.9% QoQ due to seasonality and ADVANC being the first operator to remove fixed-speed unlimited data plans from the prepaid market. SG&A-to-revenue ratio dropped from 16.9% in 1Q22 to 16.6% in 1Q23 thanks to cost control.
Maybank Securities (Thailand) (MST) maintained its “buy” call on ADVANC with a target price of THB240.00, on the back of strong quarterly earnings momentum in this year and 13% potential total return. The brokerage expects ADVANC’s QoQ profit growth to accelerate in 2Q23 thanks to easing competition and lower electricity costs. Potential upside to Maybank’s 2024 core profit growth of 3.8% is rent negotiation with JASIF.
Krungsri Capital Securities also maintained a “buy” rating on ADVANC with a target price of THB250.00, while keeping its full-year 2023 profit growth forecast at 9%. Analysts at Krungsri believe earnings to be seasonally stronger in 2Q and competition to continue ease this year. DTAC and TRUE have adopted ADVANC’s strategy to gradually terminate low-price plans since March.
