ADVANC-TRUE Reap Gains as Broker Projects Robust Outlook for Telcos Sector

On Tuesday at 2:39 PM (Bangkok time), the share price of Advanced Info Service Public Company Limited (SET: ADVANC ) surged 3.68% or THB 13.00 to THB 366.00, with a trading value of THB 4.40 billion. True Corporation Public Company Limited (SET: TRUE ) added 1.45% or THB 0.20 to THB 14.00, with a trading value of THB 3.57 billion. CGS International Securities (Thailand) (CGSI) has issued an ‘Overweight’ recommendation on the Thai telecommunications sector, noting that the average revenue per user (ARPU) for mobile services is on an upward trend, supported by increasing data consumption. However, the sector’s current valuation, with an EV/EBITDA ratio of 8.6x in 2026, remains below its five-year historical average. CGSI believes this valuation still does not fully reflect the anticipated ARPU growth. Within the sector, CGSI names TRUE as its top pick, forecasting the company’s earnings per share (EPS) to deliver robust growth of between 15% and 141% year-on-year in 2026–2028, compared to ADVANC, whose EPS is projected to grow in the range of 0.4% to 8.6% year-on-year over the same period. This is attributed to TRUE’s reduced network expenses, effective cost controls, and increasingly proactive capital management. CGSI also notes potential downside risks for the telecom sector, which could materialize from a slowdown in private consumption and network outage incidents. On the other hand, positive drivers include growing mobile data usage supporting blended ARPU growth, ongoing cost reduction initiatives, and stronger-than-expected net increases in both mobile and broadband subscriber numbers. Meanwhile, both ADVANC and TRUE expect their service revenue to grow at a low single-digit rate in 2026, while remaining cautious about domestic consumption trends, which are likely to be affected by high oil prices and increased living costs. CGSI estimates ADVANC’s service revenue (excluding interconnection charges) will grow by 5.2% in 2026, whereas TRUE’s is forecast to increase by 2.5%. TRUE’s slightly lower growth is due to lingering effects from a decline in mobile subscribers in 2Q26. The brokerage expects ADVANC to maintain a higher market share in service-related revenues than TRUE for both 2026 and 2027. In early May 2026, TRUE management indicated that the company’s broadband business showed improvement, highlighted by a record high in net new subscribers during the 1Q26 following the completion of a broadband network upgrade at the end of 2025. Nevertheless, ARPU for broadband services remained stable both year-on-year and quarter-on-quarter. CGSI projects 2026 broadband service revenue growth for ADVANC and TRUE at 6.3% and 8.4%, respectively. CGSI expects TRUE to generate free cash flow (FCF) of THB 73 billion in 2026, outpacing the estimate of THB 60.6 billion for ADVANC. Both companies are forecast to see rising FCF from 2026 to 2028, on the back of increasing operating cash flow reflecting net profit growth and efficient capital expenditure management. In terms of financial discipline, TRUE is seen as stronger than ADVANC, with its net debt-to-EBITDA ratio (including lease liabilities) projected to decrease steadily from 2025 through 2028. In contrast, ADVANC’s net debt-to-EBITDA ratio is expected to rise from 1.75x in 2025 to 2.2x in 2026, as the company increases its borrowings to manage its finances following the payment of a significant dividend in 2025.