CGS International Securities (Thailand) (CGSI) has anticipated that Thailand’s telecommunications industry would exhibit a moderate growth of 2-5% in core service revenue from 2025 to 2027, following substantial revenue expansion in 2024.
The positive trajectory is expected to be fueled by increased average revenue per user (ARPU) in mobile and broadband services, along with a rise in broadband subscribers.
CGSI predicts a 3-10% growth in EBITDA for 2025, propelled by robust core service revenue growth and reduced network expenses. A highlight in the second quarter of 2025 is the auctioning of six spectrum bands. CGSI believes that the spectrum supply surpasses the demand from telecommunication companies, indicating a likelihood of more reasonable final spectrum prices compared to previous auctions in 2019-2020.
Maintaining a Neutral Stance on the Sector
Despite not being directly impacted by the global trade tensions, CGSI maintains a Neutral outlook on the Thai telco sector due to its elevated valuation metrics, such as an 8.9x EV/EBITDA and 3.6x P/BV in 2025, which are notably above the 10-year historical average. Potential downside risks for the sector include heightened competition in mobile and broadband offerings, sluggish private consumption, and the upcoming spectrum auctions. On the upside, opportunities lie in potential cost efficiencies in network operations and administrative expenses, as well as stronger-than-expected growth in mobile and broadband subscriber additions. CGSI holds Hold ratings for both AIS and True Corp in light of these considerations. (Figure 1 depicts AIS’s and True Corp’s service revenue growth excluding IC.)
Advanced Info Service: Holding Steady with Positive Earnings Projection
Anticipating a steady performance, CGSI maintains a Hold stance for AIS with a target price (TP) of THB291.0 as of the close at THB280.0. For the first quarter of 2025, CGSI projects a 15.2% year-on-year increase in net profit to THB9.7 billion and a 4.7% yoy rise in EBITDA to THB28.9 billion. The estimated EBITDA margin is expected to improve to 52.4% in 1Q25F from 50.3% in 4Q24. Service revenue excluding interconnection charge (IC) is predicted to grow by 5.1% year-on-year but decrease by 1.0% quarter-on-quarter, led by mobile and broadband segments showing mixed results.
True Corporation: Holding Position Amid Earnings Fluctuations
Maintaining a Hold recommendation and a TP of THB13.50 with the last close at THB11.90, CGSI prepares for True Corp’s 1Q25F earnings, projecting a net loss of THB283 million, showing a significant year-on-year and quarter-on-quarter decrease. Factoring in asset write-offs and impairments, the normalized net profit is expected to be THB3.2 billion in 1Q25F. EBITDA for the same period is forecasted at THB24.7 billion, with a margin of 59.4%, slightly lower than the preceding quarter. Total service revenue (excluding IC) is estimated to have a marginal increase year-on-year but a minor decline sequentially in the first quarter of 2025.
