Thailand Telecommunications: Comprehensive Analysis of ADVANC, TRUE, and Intouch Holdings
Report Date: January 22, 2025
Broker: Maybank Securities (Thailand)
Introduction
The telecommunications industry in Thailand is entering a transformative phase with an upcoming spectrum auction in 2Q25. Maybank Securities (Thailand) has released a detailed report analyzing the impact of the auction on key players—ADVANC, TRUE Corp, and Intouch Holdings—while providing investment recommendations for each company. This comprehensive breakdown delves deep into the financial projections, spectrum pricing dynamics, and strategic positioning of these telecom giants.
Advanced Info Service (ADVANC): A Stable Contender
Key Highlights
ADVANC is projected to maintain a steady growth trajectory with a focus on securing spectrum licenses that align with its strategic objectives. The company’s forecasted core profit for FY25 and FY26 has been revised upward by 1% and 5%, respectively. This is attributed to anticipated reductions in the cost of the 2100MHz spectrum and the postponement of the 3500MHz spectrum win to FY29.
Financial Projections
- FY25 core profit: THB38,666 million
- FY26 core profit: THB42,227 million
- Mobile subscriber base: 46.6 million
- Mobile ARPU: THB232
Strategic Moves
ADVANC plans to acquire 40MHz of bandwidth in the 1800MHz spectrum auction at an estimated cost of THB25 billion. This spectrum is already in use by ADVANC, which minimizes the need for additional network capex. Furthermore, the 1800MHz spectrum offers compatibility with a wider range of 4G and 5G smartphone models, strengthening ADVANC’s competitive edge.
Investment Recommendation
Maybank Securities maintains a HOLD rating for ADVANC with a target price of THB301, reflecting an 8% upside potential. The company’s robust financials and strategic focus on cost-effective spectrum acquisition underpin this recommendation.
TRUE Corporation (TRUE): The Sector’s Top Pick
Key Highlights
TRUE emerges as the top pick in the sector, driven by its stronger core profit growth and more attractive valuation compared to ADVANC. The company is expected to benefit significantly from lower spectrum prices and longer license durations.
Financial Projections
- FY25 core profit: THB15,961 million
- FY26 core profit: THB20,812 million
- EBITDA margin: 58.2% (FY26)
Strategic Moves
TRUE is forecasted to secure 70MHz of bandwidth in the 2300MHz spectrum auction at a cost of THB15 billion, a 12% reduction from previous estimates. This move is expected to generate cost savings of THB6.4 billion annually, primarily from eliminating rental expenses for the 850MHz and 2300MHz spectrums. The company is also poised to benefit from a 15-year license duration, which will lower annual amortization expenses.
Investment Recommendation
Maybank Securities assigns a BUY rating to TRUE with a target price of THB14.2, representing a 21% upside potential. The company’s cost-saving initiatives, strong profit growth, and attractive valuation support this recommendation.
Intouch Holdings: A Steady Performer
Key Highlights
Intouch Holdings, which holds significant stakes in both ADVANC and other telecom ventures, continues to show resilience. The company benefits indirectly from the performance of ADVANC and the overall growth in the telecommunications sector.
Financial Projections
- FY24 P/E ratio: 23.3x
- FY25 P/E ratio: 21.0x
- Dividend yield: 8.4% (FY24)
Strategic Positioning
As a holding company, Intouch Holdings is less directly impacted by spectrum auction dynamics but remains a beneficiary of ADVANC’s growth and profitability. The company’s focus on generating stable returns through its diversified portfolio ensures its position as a steady performer in the sector.
Investment Recommendation
Maybank Securities assigns a BUY rating to Intouch Holdings with a target price of THB107.4, indicating a 14% upside potential. The company’s high dividend yield and stable earnings growth make it an attractive investment.
Conclusion
The telecommunications sector in Thailand is poised for significant developments with the upcoming spectrum auction. While ADVANC focuses on strategic spectrum acquisitions and cost management, TRUE leads the pack with strong profit growth and cost-saving initiatives. Intouch Holdings provides a stable investment option with its diversified portfolio and high dividend yield. Investors looking to capitalize on the sector’s growth should consider these insights from Maybank Securities.
