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Citi Upgrades Thai Telcos, Sees Margin Boost from Cost Savings and Tourism
Affected tickers
Per-ticker News Sentiment Indicator
- ADVANCanalyst_rating_change · positive · high
Citi raised its earnings estimates and outlook for ADVANC, citing improved consumption trends, cost-saving initiatives, and robust tourism recovery.
- JPMother · positive · med
JPMorgan Asset Management highlights renewed interest from international investors in Thai equities, supporting a positive outlook for the broader market.
- NOWother · neutral · high
The article discusses Thai telecommunication firms TRUE and ADVANC, which are unrelated to the US-based software company ServiceNow Inc. (NOW).
- ORother · neutral · high
The article focuses exclusively on telecommunication firms TRUE and ADVANC, providing no specific information or material impact regarding OR.
- TRUEanalyst_rating_change · positive · high
Citi upgraded its outlook for TRUE, citing improved margins from cost-saving initiatives and robust tourism trends that support stronger earnings potential.
Article body
Citi has raised its earnings estimates and target prices for leading Thai telecommunication firms True Corporation Public Company Limited (SET: TRUE) and Advanced Info Service Public Company Limited (SET: ADVANC or AIS), citing strengthened consumption trends and resilient tourist arrivals. The brokerage now places a target price of THB 18.85 on TRUE, up from THB 18.10, and THB 386 on ADVANC, from the earlier THB 365.
Previously, Citi had expressed concerns over the potential impact of inflation and rising utility and fuel prices on consumer spending. However, recent government grants have helped bolster consumption, while cost-saving initiatives across the sector are expected to improve margins further. Notably, Thailand’s tourism sector has shown unexpected robustness between January and May, contributing to the improved outlook.
Citi has initiated a 30-day positive catalyst watch on both names, suggesting there is room for further upward revisions in company guidance and broader market expectations. The analyst maintains a preference for TRUE, noting its significant valuation discount compared to ADVANC, which currently trades at a premium relative to its historical average. Additionally, Citi expects both companies to report earnings that beat earlier guidance.
Adding to the positive sentiment towards Thai equities, JPMorgan Asset Management and recent Bank of America fund manager surveys highlight renewed interest from international investors, with JPMorgan’s Tai Hui recommending continued investment in Thailand following a period of market turbulence.