On Tuesday, the share price of True Corporation Public Company Limited (SET: TRUE) in the morning session closed at THB 11.70, or a 6.36% gain. The price was highest at THB 11.90 and lowest at THB 11.10, with a total trading value of THB 988.48 million.
Maybank Securities (Thailand), in the previous analysis, approximated the core profit in 4Q24 at THB 3.4 billion, a reversal from THB 1 billion losses in 4Q23, and a surge from 3Q24 THB 2.9 billion. The 17% gain in profit is expected to be bolstered by a 1.1% boost in revenue from the previous quarter, lowering SG&A cost, and decreasing interest.
Revenue from the mobile phone business in 4Q24, which is 79% of the revenue from its core service, is estimated to grow 1.2% from the earlier quarter, reinforced by an increase in ARPU and users. In 4Q24 (a high season for tourism), the amount of users is expected to increase, which would compensate for 2.6 million users lost during the first nine months of 2024 (due to a cut in commission for top-up sim card sales).
Additionally, the analyst has revised its 2024 profit forecast up by 5%, by increasing revenue from core services by 0.3% and lowering SG&A cost by 0.5%. In 2025 and 2026, the analyst also conducted a similar adjustment, resulting in a 1% hike for both years. The estimated core profit for 2024 and 2025 are higher than the market-estimated by 9% and 15%, respectively. The revision of market estimates could be a positive factor for a re-rate of TRUE in the future.
Thus the securities company maintained a “Buy” recommendation due to: 1. The core profit could grow strong in 4Q24 and 2025 (73% growth from the previous year) and 2. A more economical investment compared to ADVANC, with TRUE’s 4Q24 core profit expected to reach THB 3.4 billion (17% growth from last quarter) bolstered by increased revenue, continuous synergy, and reduced interest cost.
Maybank also slightly raised the target price (based on DCF) to THB 13.90 (WACC 7.4%, TG 2.0%) after adjusting to the 1% revenue gain in 2025-2026.
