STOCK FOCUS OF THE DAY
Digi.Com: Sees slight service revenue drop despite MFRS 15 boost HOLD
We maintain our HOLD rating on Digi.Com with an unchanged DCF-based fair value of RM4.50/share, which implies an FY18F EV/EBITDA of 13x, the stock’s 2-year average. Digi’s FY18F-20F earnings are maintained as the group’s 1QFY18 net profit of RM352mil (excluding the impact of MFRS 15) came in within expectations, accounting for 25% of our forecast and 24% of street’s. Including the MFRS 15 adoption, which largely affected the accounting treatment of its handset contracts, Digi’s net profit increased by 10% or RM34mil to RM386mil, while revenue rose 2% or RM36mil.
Post-MFRS 15 treatment, the group’s service revenue fell 1.5% or RM22mil. This supports the group’s unchanged FY18F service revenue guidance of a flat-to-low single-digit decline vs. a 5% decrease in FY17. Given the highly competitive
landscape, we expect Digi’s subscriber growth and ARPUs to remain under pressure as both Maxis and Celcom are also aggressively improving 4G coverage and service quality.
QUICK TAKE
Plantation Sector: News flow for week 9 – 13 April NEUTRAL
RETAIL RESEARCH
Stocks On Radar: MyEG Services, Pentamaster Corp., Hibiscus Petroleum, Ucrest
ECONOMIC HIGHLIGHT
Singapore: Showing stronger growth
NEWS HIGHLIGHTS
JAKS Resources: Puts property ambition on hold
SLP Resources: Ups production capacity
Berjaya Land: Targets RM1b sales annually
Chin Well: To make Vietnam focal point for fastener op
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.
****************************************************************************************************************************************************************************************************************************************************************************************************************
DISCLAIMER:
This message may contain confidential and privileged information for its intended recipient(s) only. If you are not an intended recipient, you are hereby notified that any review, dissemination, and distribution, printing or copying of this message or any part thereof is strictly prohibited. Please delete the entire message and inform the sender of the error. Any opinions, conclusions and other information in this message that are unrelated to official business of AmBank Group are those of the individual sender and shall be understood as neither explicitly given nor endorsed by AmBank Group.
****************************************************************************************************************************************************************************************************************************************************************************************************************
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.