We forecast ADVANC to report a 3Q26F core profit of Bt13.1bn, up 9.5% YoY but down 3.5% QoQ. The YoY growth will be supported by the mobile and FBB businesses, while the QoQ drop is due to the low season for mobile and rising IT upgrade costs. We maintain our 2026F core profit forecast of Bt52.8bn, up 14.7%. We also keep our NEUTRAL rating with a mid-2027F DCF-based TP of Bt415 (6% WACC and 1.5% LTG). Our NEUTRAL call is based on our expectation that YoY core earnings growth will slow down in 3Q26F and decelerate further in 4Q26F.
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ADVANC – Expect 3Q26F to grow YoY, but drop QoQ
Expect 3Q26F core profit to grow YoY, but fall QoQ. We expect ADVANC to report a 3Q26F core profit of Bt13.1bn, up 9.5% YoY but down 3.5% QoQ. Total revenue should reach Bt55.4bn, up 1.9% YoY but down 2.0% QoQ. Steady revenue growth in mobile and FBB would drive this performance. We expect mobile revenue (61.4% of total revenue) to reach Bt34.0bn, up 3.6% YoY but down 0.8% QoQ. Data usage remained strong in Jul and Aug. However, consumer spending weakened in late 3Q due to a slow economy and rising fuel prices. The end of EPL content rights also slightly lowered postpaid revenue. Meanwhile, we forecast FBB revenue (15.5% of total revenue) to reach Bt8.6bn, up 5% YoY and 0.4% QoQ. This growth comes from adding new subscribers. Strong demand for the new Bt599 package (AIS Broadband PlayALL) also helped, though more people choosing this package kept the ARPU flat QoQ.
Costs remain under control. We expect the total cost of goods sold to fall to Bt31.0bn, down 1.9% YoY and 1.2% QoQ. This drop is due to spectrum cost savings and lower EPL content fees. We project SG&A expenses at Bt6.3bn, up 1.2% YoY but down 2.6% QoQ. Strict control over marketing expenses helped offset spending on IT system upgrades. The new virtual bank (CLICX), which opened on Aug 1, should have a small negative financial impact (booked as equity income). Based on our 3Q26F numbers, its 9M26F core profit would account for 76% of our full-year forecast. Results will be released on Nov 3.
Maintain our 2026F forecast and NEUTRAL rating. Since we expect 9M26F core earnings to account for 76% of our full-year forecast, we view this as on track. Therefore, we keep our 2026F core earnings forecast of Bt52.8bn, up 14.7%. We also keep our NEUTRAL rating with a mid-2027F DCF-based TP of Bt415. The 3Q26F numbers support our view that YoY core earnings growth should start to slow down in 3Q26F. It should slow down further in 4Q26F due to rising IT costs and lower spectrum cost benefits.
Risks and concerns. A weak economic recovery would hamper ARPU uplift in the mobile and FBB businesses. Key ESG risk for the company is in the arena of cybersecurity and data privacy for subscribers.