Bualuang Securities has upgraded the telecommunications sector from market weight to overweight, viewing the group's earnings as entering a stronger and more sustainable phase, driven by a lower cost structure, more rational price competition, and reduced interest expenses. A key factor is that ARPU, or revenue per user, at both ADVANC and TRUE continues to rise even as data usage grows faster than the price per GB, reflecting that customers are willing to pay more for more data rather than the result of price-cutting competition. Meanwhile, prepaid package price adjustments since March are still gradually feeding through positively into the third quarter of 2026. On costs, structural changes are clear: TRUE's EBITDA margin rose from 50% in the first half of 2025 to 63% in the second quarter of 2026, after the end of spectrum lease obligations with NT and the realization of roughly 7.1 billion baht per year in network merger benefits. ADVANC, meanwhile, benefits from the consolidation of TTTBB and lower network costs, leaving both companies' margins likely to hold at high levels through 2027. Another tailwind is lower debt burdens and financing costs. TRUE expects its net debt to EBITDA ratio to fall to 3.0 times by the end of 2027, ahead of its earlier 2028 target, while interest costs decline and it begins paying quarterly dividends. ADVANC's average borrowing cost is just 2.6%, and its net debt to EBITDA is expected to fall below 1 time by the end of 2026. For the third quarter of 2026, combined core profit for the sector's stocks is expected at 20.0 billion baht, up 21% year on year, rising to 21.3 billion baht in the fourth quarter of 2026, which would be a new high for the group. TRUE is expected to post a record core profit of 7.0 billion baht, up 54% year on year and 3% quarter on quarter, while ADVANC is expected to report core profit of 13.0 billion baht, up 8% year on year but down 5% quarter on quarter on seasonal expenses and its share of losses at CLICX Bank. GST is still expected to post a core loss of about 20 million baht, with a clear recovery likely to be a story for 2027. TRUE is the sector's top pick, given earnings that continue to hit new highs, a cheaper valuation than ADVANC, and a lower debt burden that opens the way for higher dividends. Bualuang upgraded TRUE from trading buy to buy with an unchanged target price of 15.10 baht, while keeping ADVANC at buy with a target price of 398 baht, and maintaining an avoid rating on GST, formerly THCOM.
Advanced Info Service Public Company LimitedBualuang upgrades telecom sector to overweight, citing ADVANC's rising ARPU, TTTBB consolidation, lower network costs, 2.6% borrowing cost and net debt/EBITDA below 1x by end-2026.
True Corporation Public Company LimitedTRUE named top pick with 15.10 baht target; EBITDA margin jumped to 63% after spectrum lease end and 7.1bn baht merger benefits, with record 7.0bn baht core profit expected, up 54% y/y.
Thaicom Public Company Limited