Equity Analysis /

Advanced Info Service PCL: Solid 2Q22 service revenue amid high inflation and competition

  • 2Q22 mobile revenue likely to be flattish YoY amid high inflation

  • 2Q22 core service revenue to rise solidly YoY and QoQ

  • Insights into 2Q22—a marginal YoY core profit rise

Bualuang Securities
12 July 2022

We believe that its 1Q22 core service revenue was the year’s nadir with improved YoY rises expected in 2Q22 through 2H22, driven by a YoY double-digit growth of both fixed broadband (FBB) and enterprise non-mobile revenues. This is despite the high inflation environment and the heightened mobile competition in 2Q22. We have yet to factor in the incremental value from its acquisition of TTTBB and JASIF, which is pending the approvals from JASIF’s unitholders in Sep 2022 and the NBTC in 1Q23. It remains our sectoral pick, premised on its 2H22 improved core earnings.   

2Q22 mobile revenue likely to be flattish YoY amid high inflation  

Although the high inflationary climate has squeezed the overall consumer spending power and the mobile competition has become more intense since 2Q22, we expect ADVANC’s 2Q22 mobile revenue to improve against its YoY and QoQ 1Q22 mobile revenue decline. We model Bt29.11bn in 2Q22 mobile revenue, flattish YoY but up 0.9% QoQ, improving against its 1.7% YoY and 2.5% QoQ drops in 1Q22. We regard its 1Q22 mobile revenue as the year’s nadir before upticks in 2Q22 and 2H22, led by the country’s reopening for tourism, boosting tourist SIM sales and international roaming revenue from 2Q22 onward.