Equity Analysis /
Thailand

Advanced Info Service PCL: 1Q21 positive signals—stable prepaid ARPU and positive net additions

  • Positive sign of a stable QoQ prepaid ARPU in 1Q21

  • Solid 1Q21 FBB net additions and its revenue

  • Shallower YoY decline of 1Q21 service revenue

Prasit Sujiravorakul
Prasit Sujiravorakul

Equity Research Analyst

Bualuang Securities
16 April 2021

We saw positive operational indicators in 1Q21—stable QoQ prepaid average revenue per user (ARPU), sustained strong mobile and fixed broadband (FBB) net additions and a shallower YoY drop and a flattish QoQ service revenue. Although the third COVID-19 wave is likely to impact the 2Q21 service revenue, we still expect its strong recovery in 2H21. We reiterate a BUY call on ADVANC, premised on a strong 2H21 earnings rebound and its cheap valuation—EV/EBITDA of 6.7x against its long-term mean of 7.3x.

Positive sign of a stable QoQ prepaid ARPU in 1Q21   

We saw stabilized mobile competition in 1Q21 with the ‘fixed-speed unlimited’ postpaid and prepaid promotions to be continued from 4Q20. Although the ‘Bt350 for 10Mbps speed’ postpaid promotion has continued to pressure its postpaid ARPU (Bt480-485/sub/mth), the prepaid ARPU is likely to be more stable QoQ, as the existing ‘Bt150 for 4Mbps speed’ has come close to its current prepaid ARPU of Bt150-155/sub/mth. Overall, we model the blended ARPU of Bt231/sub/mth in 1Q21, down 4.5% YoY and 1.5% QoQ. We assume that the net mobile subscriber additions will be a positive of 490k in 1Q21, which is close to 495k in 4Q20, led by the stronger postpaid net additions from greater prepaid-to-postpaid migration (from the bundling with iPhone 12 sales).