Analyst Expects ADVANC to Offer a 2H Dividend Payment of ฿3.2, Recomm. “BUY” at ฿218

Analyst Expects ADVANC to Offer a 2H Dividend Payment of ฿3.2, Recomm. “BUY” at ฿218

Analyst expected ADVANC to report a 4Q20 net profit of 7,250 million baht, an increase of 3% due to a declining expenses, while full-year net profit for 2020 is estimated to decrease 12% to 27,407 million baht. Analyst also expected ADVANC to offer a dividend payment for the second half of 2020 at ฿3.20/share, recommending “BUY” with a target price of ฿218.00/share

 

Capital Nomura Securities projected Advanced Info Service Public Company Limited (ADVANC) to book an earnings of 7,250 million baht in 4Q20, up 3% YoY as the result of expenses declining (marketing cost dropped to 4.1% YoY) and the advantage of tax incentives for investment implemented. 

 

While expecting a total revenue in 4Q20 of 46,755 million baht, down 4% YoY but up 12% QoQ due to a surge in iPhone 12 sales. 

 

Core service revenue excluding IC was 32,550 million baht (-6% YoY, +1% QoQ), dragged by a decline in mobile business revenue. However, the number of subscriptions is likely to increase by 300,000 to 41.2 million subscribers. Revenue from broadband service subscribers is also projected to grow 17% YoY which was in line with an increase in customer base.

 

Gross profit in 4Q20 was at 33.2%, down from 35.7% a year earlier due to a contraction in services revenue. 

 

If 4Q20 revenue could meet the projection, FY2020 earnings would stand at 27,407 million baht, down 12% YoY. Therefore expecting a dividend payment for the second half of 2020 at ฿3.20/share.

 

For full-year net profit in 2021, CNS estimated to slightly drop from FY2020 by 4% to 26,213 million baht because ADVANC will enter into the stage of investing in 5G infrastructure in the first half of this year, which could weigh significantly on expenses. 

 

However, with the positive effects from 5G and a rebound of public spending, particularly in the second half of 2021 once foreign tourists return, CNS saw those two factors would benefit ADVANC in the long-term, together with net profit recovery.Recommending “BUY” with a target price of ฿218.00/share.  

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