Asia Plus keeps overweight on ICT sector, sees strong fundamentals for ADVANC and TRUE

Thunhoon··THUS·Read original
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Asia Plus Securities research maintains an overweight investment weighting for the ICT sector, believing ICT stocks will be less affected by the economy, inflation and interest rates than other sectors, because normal profits of mobile and internet service providers ADVANC and TRUE, the main drivers of the sector's earnings, are expected to keep growing in the second half of this year both HoH and YoY, and to continue growing into 2027. In the short term, however, ADVANC and TRUE share prices will be pressured by US interest rate issues, with investors watching whether the Fed is likely to raise rates further. Yesterday, ADVANC and TRUE shares closed down 2% to 3% on concerns the Fed will raise rates, which pushed bond yields higher and pressured risk assets such as stocks offering similar dividend yields. In addition, ADVANC has launched a low-priced package for the AI Passport project at 29 baht per month, usable from 15 September 2026 to August 2027. TRUE has not yet launched this package but is expected to do so next month to support government policy. The research team views the bond yield issue as a short- to medium-term negative for ADVANC and TRUE, which are expected to offer dividend yields of about 4.6% to 5.2% for 2026 to 2027, with their appeal diminishing if the Fed raises rates. As for the low-priced package, it believes this will not significantly affect ADVANC's and TRUE's operating results, since the AI Passport project has a combined user base of only just over 1.0 million, small compared with ADVANC's total customer base of nearly 47 million and TRUE's 50 million.

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Cloud & Digital Infrastructure▲ · 2 stocks
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