It remains our sectoral pick, premised on its service revenue recovery in 2H22, its being 5G leader and a decent dividend yield of 4%.
Consistent with our model
ADVANC posted a net profit of Bt6.31bn for 2Q22, down 10% YoY and flattish QoQ. Excluding extra items in 2Q22—Bt335m in net FX loss and Bt62m tax benefit from investment—core profit was Bt6.58bn, down 1% YoY but up 5% QoQ. Both net and core profits were aligned with our model. Core service revenue beat our estimate by 0.7% led by the jump in non-mobile enterprise revenue which was 9% higher than modeled. We saw a jump in content costs (under service cost) and marketing expense (under SG&A expense) in 2Q22. Other service costs rose 27% YoY and 11% QoQ, led by new contents acquired in 2H21 and cost of cloud services. Marketing expenses jumped 49% YoY and 23% QoQ due to increased 5G marketing activities and events after reopening.