4Q24: Core profit in line
TRUE reported a 4Q24 net loss of Bt7.5bn, sinking from a Bt810mn loss in 3Q24 but better than the Bt11.3bn loss in 4Q23. Stripping out extra items, it had a core profit of Bt3.6bn, turning around from a core loss of Bt702mn in 4Q23 and growing 20.7% QoQ. This is in line with INVX. This brought 2024 core profit to Bt9.5bn, 16.1% above our full-year forecast, backed by higher cost synergy than anticipated. We therefore raise our 2025F core profit by 37.9% to Bt14.1bn, growth of 49.3%. In 1Q25F, we expect core profit to grow both YoY and QoQ. We maintain our OUTPERFORM and raise our end-2025F DCF-based TP to Bt16.5 from Bt15 (7.9% WACC and 2% LTG) to reflect the earnings upgrade. Further upside could come from cost savings from the upcoming license bidding, which is not factored into our forecast. TRUE is our top pick in the sector.
4Q24 core profit in line. TRUE reported a 4Q24 net loss of Bt7.5bn, better than the Bt11.3bn loss in 4Q23 but worse than the Bt810mn loss in 3Q24. In the quarter, it booked one-time expenses of Bt11.1bn from network modernization and impairment on non-network assets. Stripping these out shows core profit of Bt3.6bn, a sharp turnaround from a core loss of Bt702mn in 4Q23 and growth of 20.7% QoQ, lining up with INVX estimates. For the year 2024, net loss was Bt10.9bn with core profit of Bt9.5bn (beating our forecast by 16.1%) vs. a Bt14.6bn loss in 2023. TRUE announced not to pay a dividend for 2024 operations.
Strong operating performance in 4Q24. Mobile revenue (62.5% of total revenue) was Bt32.9bn, up 2.1% YoY and 0.7% QoQ, backed by tourist-driven prepaid revenue growth while postpaid remained flat. TRUE also reported a 5.9% YoY and 2.2% QoQ increase in blended ARPU to Bt215, also driven by prepaid ARPU which increased 11% YoY and 4.2% QoQ to Bt121. Online revenue (11.9% of total revenue) was Bt6.3bn, rising 3.9% YoY but slipping 1% QoQ on lower contribution from corporate customers due to higher project revenue in the previous quarter while consumer broadband was flat. Online ARPU was Bt522, up 5.8% YoY, but down 0.4% QoQ.
Well-managed cost continues. TRUE reported cost of service of Bt22.5bn excluding depreciation, down 3.7% YoY due to its ongoing cost optimization program, but up 10.4% QoQ on higher cost of product sales due to the launch of a new iPhone. SG&A was at Bt5bn, down 22.3% YoY and 8.6% QoQ, on synergy from organizational modernization, commercial initiatives and better collections.
Expect 1Q25F core profit to grow YoY and QoQ. Backing the YoY growth will be ongoing cost synergy, with the QoQ growth from lower marketing cost. We still expect to see it book a one-time expense related to network modernization.
Revised up our 2025F. Since its 2024 core profit was 16.1% above our forecast on higher-than-expected cost synergy (mainly at SG&A) and we also expect the 4Q24 core profit of Bt3.6bn to be a baseline for quarterly core profit in 2025F, we shoved up our 2025F core profit by 37.9% to Bt14.1bn (+49.3% YoY). Our assumptions are based on 2.5% growth in service revenue ex. IC which is in line with management guidance of 2-3% growth.
Risks and concerns. A weak economic recovery that would weaken revenue growth for mobile and FBB businesses. Key ESG risk for the sector is cybersecurity and data privacy for its subscribers, which could hit revenue (S).
