Advanced Info Service (ADVANC)

Advanced Info Service (ADVANC) is a prominent player in Thailand’s telecommunications sector. With a current price (CP) of THB284 and a target price (TP) of THB301, the stock is rated as “HOLD.” ADVANC owns a 100% stake in 3BB, a fixed-broadband service provider, and a 19% stake in 3BB Internet Infrastructure Fund (3BBIF). The acquisition was completed in November 2023, highlighting the company’s strong position in the broadband infrastructure market.

ADVANC has been instrumental in helping 3BBIF negotiate lower interest rates on its debt. This move is expected to enhance 3BBIF’s profitability and improve yields. The company’s strategy to strengthen its broadband business is evident in its efforts to integrate 3BB and optimize the operations of 3BBIF. However, with a “HOLD” rating, the recommendation suggests limited upside potential at the current price level.

Bangkok Bank (BBL)

Bangkok Bank (BBL), one of Thailand’s leading financial institutions, is currently priced at THB154 with a target price of THB175. The stock is rated as “BUY,” reflecting an optimistic outlook on the bank’s performance. BBL has played a significant role in financing 3BBIF, holding a portion of the fund’s debt. Recent negotiations have led to a reduction in the interest rate on BBL’s loans to 3BBIF, from MLR to MLR-2.9%, which translates to a new rate of 4.0%.

This reduction in interest rates is expected to improve the profitability of 3BBIF, indirectly benefiting BBL as a lender. The bank’s proactive approach to managing interest costs for its clients demonstrates its commitment to fostering long-term relationships and supporting infrastructure development in Thailand. Given the favorable financial outlook and the bank’s strong position in the market, the “BUY” recommendation highlights its potential for growth.

Jasmine International (JAS)

Jasmine International (JAS) is a key player in Thailand’s telecommunications sector, having previously owned 3BB and 3BBIF. The company sold its 100% stake in 3BB and its 19% stake in 3BBIF to ADVANC in November 2023. While JAS is not currently rated, its strategic divestment has significantly reshaped the competitive landscape of Thailand’s broadband market.

The sale has enabled ADVANC to consolidate its position in the broadband infrastructure space while allowing JAS to focus on other strategic initiatives. Although no current rating or target price is provided for JAS, its past decisions have had a lasting impact on the telecommunications industry in Thailand.

3BB Internet Infrastructure Fund (3BBIF)

The 3BB Internet Infrastructure Fund (3BBIF) has been upgraded to “BUY” from “HOLD,” with a revised target price of THB6.1, reflecting a 27% upside from its current price of THB5.25. This infrastructure fund, previously known as JASIF, is invested in a core fiber optic network used by 3BB, a fixed broadband business owned by ADVANC. The fund’s lease contract with 3BB extends until December 2038, with no assumption of renewal.

3BBIF’s recent financial restructuring is a significant development. The fund renegotiated its debt with Bangkok Bank (BBL) and Sumitomo Mitsui Banking Corporation (SMBC), reducing its average cost of debt to 3.6% from 6.9%. This move is expected to save THB286 million in interest costs by FY26, boosting yields to an attractive 11% for FY25-26.

The fund’s internal rate of return (IRR) has risen to 9.1%, outperforming similar infrastructure funds like DIF (6.7%) and CPNREIT (6.1%). Despite a 16% drop in its share price over the past three months, the enhanced yield and IRR make 3BBIF a compelling investment opportunity. The fund’s financial performance is further supported by stable rental income and effective cost management, positioning it as a lucrative option in the infrastructure investment space.

Conclusion

The comprehensive analysis of Advanced Info Service (ADVANC), Bangkok Bank (BBL), Jasmine International (JAS), and 3BB Internet Infrastructure Fund (3BBIF) reveals a dynamic landscape in Thailand’s telecommunications and financial sectors. ADVANC and BBL emerge as strong players with strategic initiatives that enhance their market positions, while JAS continues to influence the industry through its past decisions. The upgrade of 3BBIF to “BUY” underscores its potential as a high-yield investment opportunity. Investors are advised to consider these insights when making informed decisions in the Thai market.