TRUE – Time to reload

We believe TRUE is at an attractive entry point because its 5% dividend yield should help limit the downside for the stock. Its fundamentals remain solid. We expect its 3Q26F core earnings to stay strong at Bt6.8bn, up 47.7% YoY and 1.3% QoQ, supported by the mobile business and cost controls. This should be a near-term catalyst. The recent flooding in Bangkok should also have a limited impact on the company. We maintain our OUTPERFORM rating with a mid-2027F DCF-based TP of Bt18.5 (8.5% WACC and a 1.5% LTG).

At an attractive entry point. We believe TRUE's share price is at a good entry point, although market may still be concerned about potential divestment by China Mobile. We view current yield of 5% (based on 3Q26F annualized DPS) as attractive, which should help cushion downside. Additionally, we believe its fundamentals remain solid. Based on this, we recommend investors look past this overhang. Historically, TRUE’s share price fell by 14.5% when Telenor announced plans to divest its stake in TRUE, but it took 12 trading days for price to return to its previous level. It also fell by 6.7% when the market speculated about a potential divestment by China Mobile, and it took 11 trading days to return to its previous level.

Expect core earnings to grow strongly in 3Q26F. We expect TRUE to post a 3Q26F core profit of Bt6.8bn, up 47.7% YoY and 1.3% QoQ. Mobile revenue (71.5% of the total) should grow by 2.5% YoY and 0.5% QoQ to Bt33.1bn. This is driven by subscriber growth, higher prepaid ARPU, a tourism recovery, and a low base from a 3Q25 network outage. Online revenue (14.3% of the total) should reach Bt6.6bn, up 1.5% YoY and 1.0% QoQ, extending steady growth since 4Q25. PayTV revenue (2.5% of the total) should hit Bt1.2bn. This is down 31.8% YoY due to fewer concerts, but up 3.0% QoQ from Academy Fantasia. Product sales should be Bt4.2bn (up 0.1% YoY and 3.1% QoQ), as major iPhone revenue will be recorded in 4Q26F.

Costs are well-managed. On costs, SG&A should fall by 2.5% QoQ to Bt5.2bn on lower marketing spend, balancing higher network costs and normal regulatory fees. Depreciation will rise by 0.8% QoQ to Bt17.6bn due to higher CAPEX and an extra day in the quarter. Interest expenses should fall to Bt4.6bn (down 10.0% YoY and 0.8% QoQ) from debt refinancing. We expect the company to announce an interim dividend of Bt0.16/sh. (80% payout). Based on our 3Q26F numbers, its 9M26F core profit would account for 78% of our full-year forecast. Results will be released on Nov 2.

Limited impact from flooding. For operations, heavy floods in Bangkok have not caused major mobile or broadband network issues. While damage checks are ongoing and customers have received credit relief, management expects the financial impact from the floods to be very small.

Risks and concerns. Weak economic recovery would weaken revenue growth for mobile and FBB businesses. Investors should also keep an eye on management structure post Telenor divestment transaction. Key ESG risk is cybersecurity and data privacy for its subscribers, which could hit revenue (S).