Advanced Info Service

Advanced Info Service Plc (ADVANC)

Maintain OUTPERFORM. Last week, we took ADVANC to meet institutional funds in Malaysia. Key takeaways were 1) promising data revenue growth for 3G on existing spectrum, 2) resilient 2G revenue and margin outlook, and 3) optimism about 3G/2.1GHz licensing in 1H12. Client feedback was also broadly positive. We encouraged clients to buy into ADVANC given potential upside from a 3G/2.1GHz regime, a call which is ahead of the market. We believe the recent share price rally has not fully reflected this potential upside. ADVANC remains an OUTPERFORM and one of our top regional telco picks. We also maintain our DCF-based target price of THB131. Potential re-rating catalysts are 1) the formation of the National Broadcasting and Telecommunications Commission (NBTC) on 5 Sep, 2) voice revenue market share gains, and 3) capex and FCF upside if 3G/2.1GHz licensing becomes more visible.