On Friday at 2:52 PM (Bangkok time), the share price of Advanced Info Service Public Company Limited (SET: ADVANC) rose by 2.09% or THB 6.00 to THB 293.00, with a trading value of THB 1.03 billion.
KGI Securities forecasts ADVANC to report a net profit of THB 9 billion in 4Q24, marking a 29% year-on-year increase and a 2% quarter-on-quarter increase. The core profit is expected to reach THB 9.1 billion, reflecting a 38% year-on-year surge and an 8% quarter-on-quarter rise, excluding FX losses.
The year-on-year growth is projected to be driven by more structured pricing across various packages (mobile and fixed broadband), enhanced cost efficiency, the full-year impact of TTTBB’s contribution since November 15, 2023, along with improved operational efficiency. On a quarter-on-quarter basis, the expected uptick could be attributed to the peak travel season, heightened sales of mobile devices, greater adoption of high-value plans, and reduced interest expenses due to debt repayments.
Despite adhering to its initial 2024 guidance, ADVANC has issued optimistic verbal projections for its fourth-quarter profits. The company anticipates a reduction in marketing expenditures compared to previous market projections, with strong performance in the fixed broadband (FBB) segment exceeding ADVANC’s internal expectations. Additionally, ADVANC holds approximately THB 4 billion in tax loss carryforwards from TTTBB in 2023, offering potential for gradual utilization in upcoming periods.
Looking ahead, ADVANC’s first-quarter 2025 earnings are anticipated to show growth both quarter-on-quarter and year-on-year, despite a high base. This growth is expected to be driven by decreased marketing expenses, increased FBB revenue along with synergy recognition, and advancements in the company’s deleveraging strategy.
The analyst predicts that ADVANC will provide a favorable 2025 guidance on February 7, 2025, showing single-digit growth projections for EBITDA and core service revenue, alongside reduced capital expenditures (excluding spectrum costs). The company is expected to benefit from an increase in top-line performance driven by modest 1-3% growth in mobile services and sustained expansion in FBB, supported by observed synergy recognition and cost efficiencies resulting from spectrum expiration.
Additionally, ADVANC could potentially surprise investors in 1Q25 by issuing an impressive dividend payment for the second half of 2024, aligning with the objectives of NewCo.
As a result, KGI Securities upholds an ‘Outperform’ rating for ADVANC, setting a target price at THB 310 per share.