Thursday, October 26, 2017

FW: AmBank Research - Maxis : Strong results on postpaid accretion HOLD, 26 Oct 2017

 

 

STOCK FOCUS OF THE DAY         

Maxis : Strong results on postpaid accretion                        HOLD

 

We maintain our HOLD recommendation on Maxis but with a higher DCF-derived fair value of RM6.10/share (based on a discount rate of 7% which is equivalent to its WACC and a terminal growth rate assumption of 2%), implying an FY17F EV/EBITDA of 11x, 1SD below its 3-year average of 12x. Maxis' higher DCF stems from a 10%-11% increase in FY17F-FY19F earnings due to a 2K monthly increase in postpaid subscriber assumptions together with a 10% reduction in traffic costs and 1ppt decline in effective tax rate.

 

Maxis' 9MFY17 normalised net profit of RM1,560mil came in above expectations, accounting for 83% of our earlier FY17F earnings and 80% of consensus. The stronger-than-expected results is partly due to the absence of any impact from the expected loss of data roaming revenues due to the termination of Maxis' 3G radio access network arrangement with U Mobile. Management now indicates that the impact will only be felt in FY18F.

 

The group’s service revenue improvement stemmed from the postpaid division, which managed to increase its subscriber base by 7K in 3QFY17. While this has slowed down from 42K in 1QFY17-2QFY17, management is confident of this segment’s robust trajectory. The stock’s FY17F EV/EBITDA of 11x is almost at parity to its 3-year average, while dividend yields are decent at 3%.

 

 

Others :

Bursa Malaysia : Outflow of foreign funds in 3QFY17        HOLD

 

 

STOCKS ON RADAR

Hibiscus Petroleum, Poh Huat, Tambun Indah, ML Global

 

 

ECONOMIC HIGHLIGHT

UK : 3Q GDP may have sealed a rate hike

 

 

NEWS HIGHLIGHTS

MRCB : Rights issue oversubscribed 7.37%

MAHB : Revenue recognition from KLIA Aeropolis in 2 years

ES Ceramics : Braces for tougher times

Automobile Sector : No plans for electric vehicles in Malaysia, says Perodua

 

 

 

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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