KGI Securities has revised its outlook on Advanced Info Service Public Company Limited (SET: ADVANC), expressing increased optimism around the company’s earnings potential and dividend payout.
The brokerage now sees potential earnings upside of 5–8% and a higher payout ratio of up to 95%, compared to the current assumption of 91%. This improved outlook stems from both KGI and market participants previously underestimating ADVANC’s underlying earnings power.
Several key drivers support ADVANC’s growth prospects. Firstly, the company’s aggressive execution in mobile and fixed broadband (FBB) convergence, paired with cloud services in partnership with Oracle, is yielding network efficiencies and more effective content bundling than competitors.
Secondly, there is room for further cost reductions, with the possibility of trimming service-related costs by as much as THB 10 billion annually and bringing the SG&A-to-sales ratio below 4% by the fourth quarter of 2025.
Thirdly, dividend upside is supported by shareholders Gulf Development (GULF) and Singtel, who are incentivized to extract higher cash flows to fund their major CAPEX requirements over the next three to five years.
For the fourth quarter of 2025, KGI projects ADVANC to achieve a net profit of THB 12.8 billion, up 39% year-over-year and 7% quarter-on-quarter, with core profit reaching the same figure after excluding FX gains. The second half dividend per share (DPS) is expected to be THB 7.94, offering a yield of 2.5% and a 95% payout ratio. The forecast for full-year 2025 core profit stands at THB 46.3 billion, a robust 33% increase year-over-year, covering 103% of KGI’s full-year estimate.
Despite an uptick in SG&A expenses, quarter-on-quarter earnings are seen rising due to higher revenues from mobile services and handset sales—particularly from the launch of the iPhone 17—along with strong FBB revenue, a full quarter of spectrum cost savings, and reduced financing costs. On a year-over-year basis, sustained core service growth and ongoing cost reductions underpin profit growth.
KGI forecasts mobile revenues to climb 4% year-over-year and 0.5% quarter-on-quarter, driven by a net gain of 268,000 subscribers and an increase in blended ARPU to THB 236. FBB revenues are projected to rise 9% year-over-year and 1% quarter-on-quarter, supported by an increase in ARPU and 52,000 net new subscribers.
Looking ahead to the first quarter of 2026, momentum is expected to accelerate, with core profit likely to rise both sequentially and annually on the back of strong cellular revenue and election-related activity. However, guidance for 2026 is expected to remain conservative due to broader economic uncertainties and ongoing border tensions between Thailand and Cambodia.
KGI maintains an ‘Outperform’ rating on ADVANC, with a target price of THB 335.00 per share. The firm states ADVANC’s premium valuation remains justified given its industry-leading ROE and the potential for further dividend upside, in line with the strategies of its major shareholders.
