Maybank Sees Acquisitions of “3BB-JASIF” to Boost ADVANC Earnings by 3% in 2023-24

Advanced Info Service Public Company Limited (SET: ADVANC) has announced an additional proposal on advance rental payment to Jasmine Broadband Internet Infrastructure Fund (SET: JASIF) worth THB 3,000 million in exchange of the completion of the Shares Acquisition and Investment Units Acquisition Transaction in TTTBB and JASIF.

Maybank Securities (Thailand) (MST) expects ADVANC’s new proposal on advance rental payment to result in c.8.5% yield for JASIF in FY23-25E, up from c.7.0% yield in the old proposal. The higher yield during the first three years leads us to believe JASIF unitholders will approve ADVANC’s deal on 18 Oct. MTS raised FY23-24E core net profit 3% to factor in the acquisitions of TTTBB and JASIF. Maintain BUY with a higher DCF-based target price of THB250.

MST factored in ADVANC’s acquisitions of TTTBB (100% stake) and JASIF (19% stake), resulting in 3% increases in FY23-24E core net profit. Earnings accretion mainly stems from 31% reduction in annual rental payment as proposed by ADVANC (TTTBB’s rental payment to JASIF dropping from THB10.6 billion to THB7.3 billion in FY23E). In this case, MST estimated THB980 million positive impact on ADVANC’s FY23E core net profit, supported by TTTBB’s core net profit of THB1.9 billion after the lease amendments (positive) and THB908 million after-tax interest expenses (negative).