CLSA has initiated coverage on Advanced Info Service (SET: ADVANC or AIS) with an Outperform rating, citing the company’s dominance in Thailand’s telecom market, resilient core growth, and decent dividend yield. The brokerage has set a DCF-based target price of Bt410, implying a potential 14% total return over the next year, driven by favorable industry conditions and continued earnings growth.
AIS remains one of Thailand’s leading telecom and digital technology providers, with solid contributions from its mobile, fixed broadband (FBB), and enterprise arms. CLSA highlights AIS’ value-focused strategy, enhanced by a two-player market structure, as key to driving higher average revenue per user (ARPU). Additionally, rising data consumption, 5G adoption, digital transformation, and emerging AI/IoT applications are poised to further boost growth, particularly in the enterprise solution segment.
The company is entering a capital expenditure (capex) upcycle, planning to increase its capex-to-revenue ratio to 15% during 2026-2028. AIS intends to allocate an additional Bt8-10 billion for strategic investments, particularly in data centers and its virtual banking initiative. CLSA estimates AIS’ net debt to Ebitda will rise to approximately 2.1x in 2026, which remains below its 2.5x self-imposed ceiling, before trending lower thereafter.
Looking ahead, CLSA forecasts AIS’ core earnings to grow at a compound annual rate of 8% over 2026-2028. Dividends are also expected to stay robust, with yields at 4-5% in line with historical payout ratios, barring special dividends.
Despite its positive view on AIS, CLSA notes a preference for TRUE (O-PF, TP Bt15.5) in the sector. Risks for AIS include potential economic slowdown, regulatory changes, and market competition. AIS’ ESG score of 84.1 is notably above both country and sector averages in social and environmental areas.
