Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

<ul>
<li>Maintain BUY rating with TP of Bt259 based on DCF,implying 23.8xPE’22E. Analyst meeting came out with slightly negative news on 2022 prospects. DTAC and TRUE fiercely competing for market share</li>
<li>We expect to see soft earnings recovery in 2Q22 from weak top-line growth.Price competition will remain intense, but the strong performances in broadband and CCIID segment will support revenue growth</li>
<li>Maintain our 2022 earnings at Bt29bn(+9%YoY).We still believe that in 2H22, 5G ARPU uplift and recovery in tourism to boost consumer confidence will help ARPU reverse and support earnings growth.</li>
</ul>


Maintain BUY rating with TP of Bt259 based on DCF,implying 23.8xPE’22E. Analyst meeting came out with slightly negative news on 2022 prospects. DTAC and TRUE fiercely competing for market share
We expect to see soft earnings recovery in 2Q22 from weak top-line growth.Price competition will remain intense, but the strong performances in broadband and CCIID segment will support revenue growth
Maintain our 2022 earnings at Bt29bn(+9%YoY).We still believe that in 2H22, 5G ARPU uplift and recovery in tourism to boost consumer confidence will help ARPU reverse and support earnings growth.


ADVANC: 1Q22 ARPU Decline Could Be the Trend Throughout 2022

<ul>
<li>We maintain our BUY rating with a new DCF-derived TP of Bt259 (-4% from previous TP) representing 23.8xPE’22. We adjusted down overly optimistic forecast on non-mobile enterprise segment. Nevertheless</li>
<li>We expect 1Q22E net profit at Bt6.9bn (+4% YoY, flat QoQ). Limited QoQ growth is due to prolonged price wars and weaker foot traffic caused by the Omicron outbreak.</li>
<li>We expect CCIID and 5G ARPU uplift will drive earnings growth at 9%CAGR between 2021-24E.</li>
</ul>


We maintain our BUY rating with a new DCF-derived TP of Bt259 (-4% from previous TP) representing 23.8xPE’22. We adjusted down overly optimistic forecast on non-mobile enterprise segment. Nevertheless
We expect 1Q22E net profit at Bt6.9bn (+4% YoY, flat QoQ). Limited QoQ growth is due to prolonged price wars and weaker foot traffic caused by the Omicron outbreak.
We expect CCIID and 5G ARPU uplift will drive earnings growth at 9%CAGR between 2021-24E.


ADVANC: 1Q22 Earnings Should Be the Lowest of the Year

<ul>
<li>Upgrade to BUY rating with new TP of Bt269 (up 19% from previous TP), based on DCF, implying 24.1xPE’22. Analyst meeting came out with positive tone about new strategic direction</li>
<li>Expect Enterprise revenue to contribute 20% of total revenue by 2025. Management believes this segment will reach 20% of total revenue by 2024.We believe differently as we expect further competition</li>
<li>Revised 22E and 23E net profit upwards by 4% and 13%, respectively, to factor in high revenue growth. While 2022 will demonstrate healthy net profit growth, we believe enterprise segment </li>
</ul>


Upgrade to BUY rating with new TP of Bt269 (up 19% from previous TP), based on DCF, implying 24.1xPE’22. Analyst meeting came out with positive tone about new strategic direction
Expect Enterprise revenue to contribute 20% of total revenue by 2025. Management believes this segment will reach 20% of total revenue by 2024.We believe differently as we expect further competition
Revised 22E and 23E net profit upwards by 4% and 13%, respectively, to factor in high revenue growth. While 2022 will demonstrate healthy net profit growth, we believe enterprise segment 


ADVANC: 5G and Enterprise Segment Will Drive Strong Growth in 2022

<ul>
<li>Maintain our HOLD rating at Bt227,based on DCF implying 24xPE’22.Current share price already factored in positive outlook on 5G development and ARPU uplift. We believe ADVANC will see steady 5G</li>
<li>Expect blended ARPU will show positive growth in 1Q22onwards. ADVANC expects postpaid ARPU to increase from mass 5G adoption that will occur in 2022-23.Prepaid segment continue seeing intense pricing war</li>
<li>As of now, we believe ADVANC’s 2022 net profit will steadily increase from the gradual recovery in tourism and the reversal in ARPU from 5G subscribers.</li>
</ul>


Maintain our HOLD rating at Bt227,based on DCF implying 24xPE’22.Current share price already factored in positive outlook on 5G development and ARPU uplift. We believe ADVANC will see steady 5G
Expect blended ARPU will show positive growth in 1Q22onwards. ADVANC expects postpaid ARPU to increase from mass 5G adoption that will occur in 2022-23.Prepaid segment continue seeing intense pricing war
As of now, we believe ADVANC’s 2022 net profit will steadily increase from the gradual recovery in tourism and the reversal in ARPU from 5G subscribers.


ADVANC: 5G Mass Adoption Will Lead to ARPU Growth This Year

<ul>
<li>Downgrade ADVANC to HOLD from BUY rating with a TP of Bt227 due to limited upside.Share price soared by 14% since 19 November 2021 is due to magnified positive industry</li>
<li>We expect 10% upside to our target price from merger sensitivity analysis as ARPU growth may increase rapidly from limited consumer choice and 5G features.</li>
<li>We expect 4Q21 core profit at Bt6.6bn (-4%YoY, flat QoQ), as rising subscriber base is continuously offset by declining ARPU.</li>
</ul>


Downgrade ADVANC to HOLD from BUY rating with a TP of Bt227 due to limited upside.Share price soared by 14% since 19 November 2021 is due to magnified positive industry
We expect 10% upside to our target price from merger sensitivity analysis as ARPU growth may increase rapidly from limited consumer choice and 5G features.
We expect 4Q21 core profit at Bt6.6bn (-4%YoY, flat QoQ), as rising subscriber base is continuously offset by declining ARPU.


ADVANC: Opportunities Fully Priced in for 2022, Downgrade to HOLD

Thailand

Advanced Info Service Public Company Limited is granted a 25-year concession expiring the year 2015 by the Telephone Organization of Thailand to provide cellular phone services.  The Company provides analog mobile phone services through the Nordic Mobile Telephone (NMT900) network, and digital phone services through the Global Systems for Mobile Communication (GSM) network.

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Advanced Info Service (ADVANC-R TB)

ADVANC: 1Q22 ARPU Decline Could Be the Trend Throughout 2022

Maintain BUY rating with TP of Bt259 based on DCF, implying 23.8xPE’22E. Analyst meeting came out with slightly negative news on 2022 prospects....

Pi Securities PCL, Thailand

ADVANC: 1Q22 Earnings Should Be the Lowest of the Year

We maintain our BUY rating with a new DCF-derived TP of Bt259 (-4% from previous TP) representing 23.8xPE’22. We adjusted down overly optimistic...

Pi Securities PCL, Thailand

ADVANC: 5G and Enterprise Segment Will Drive Strong Growth in 2022

Upgrade to BUY rating with new TP of Bt269 (up 19% from previous TP), based on DCF, implying 24.1xPE’22. Analyst meeting came out with positive...

Pi Securities PCL, Thailand

ADVANC: 5G Mass Adoption Will Lead to ARPU Growth This Year

Maintain our HOLD rating at Bt227, based on DCF implying 24xPE’22. Current share price already factored in positive outlook on 5G development and...

Pi Securities PCL, Thailand

ADVANC: Opportunities Fully Priced in for 2022, Downgrade to HOLD

Downgrade ADVANC to HOLD from BUY rating with a TP of Bt227 due to limited upside. Share price soared by 14% since 19 November 2021 is due to...

Pi Securities PCL, Thailand

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