ADVANC Maintains Strong Growth as Dividend Remains Unaffected by Spectrum Payment

CGS International Securities (Thailand) or CGSI has released its latest analysis, projecting that Advanced Info Service Public Company Limited (SET: ADVANC) will report a 2Q25 net profit of THB 11 billion, up 28.1% YoY and 3.8% QoQ. This growth is underpinned by robust service revenue, effective SG&A cost control, and reduced interest expenses.

Service revenue (excluding interconnection charges) is estimated to increase by 4.8% YoY and 0.6% QoQ. Mobile service revenue is expected to grow 2.9% YoY and 0.1% QoQ, while broadband revenue should see substantial expansion of 9.7% YoY and 2.1% QoQ.

Although revenue from device and SIM sales is forecasted to rise 13.9% YoY, it would decline 20% QoQ due to the low season for device sales. EBITDA is projected to increase 5.9% YoY but fall 1.1% QoQ.

ARPU (Average Revenue Per User) for mobile and broadband is expected to rise, supported by upselling strategies and a lack of industry-wide price wars. CGSI projects prepaid ARPU will climb 5.1% YoY and 0.7% QoQ, while postpaid ARPU will drop 1.6% YoY but rise 0.8% QoQ. Broadband ARPU is seen increasing by 3.8% YoY and 0.4% QoQ.

ADVANC stated that its acquisition of the 2100MHz spectrum on June 29, 2025, will help broaden 4G/5G network coverage. The 2100MHz mid-band spectrum is globally favored, and the company believes the auction price was reasonable and will enhance long-term network quality.

As of 1Q25, ADVANC’s financial position remains strong, with an interest-bearing debt-to-equity ratio of 1.2x and net debt-to-EBITDA of 0.6x. CGSI believes the first payment for the 2100MHz license, scheduled for 3Q25 at THB 7.4 billion, will not affect its interim dividend payout.

CGSI maintains a “Buy” recommendation for ADVANC with a target price of THB 301, based on discounted cash flow (DCF) valuation. Key positives include a lower-than-expected license cost, an average EPS CAGR of 8.9% in 2025–2027, and an attractive dividend yield of 4.5–5.1% per annum. Risks include a potential slowdown in private consumption or renewed price competition in the telecom sector. Upside could come from stronger-than-expected cost controls and further subscriber growth.