Friday, April 20, 2018

FW: AmBank Research - Maxis: More migration likely to new Hotlink plans HOLD, 20 Apr 2018




Maxis: More migration likely to new Hotlink plans                                            HOLD


We maintain our HOLD recommendation on Maxis with unchanged forecasts and DCF-derived fair value of RM5.76/share (based on a WACC discount rate of 7% and a terminal growth rate assumption of 2%), implying an FY18F EV/EBITDA of 11x, 1SD below its 3-year average of 12x.


Based on the analyst briefing yesterday, we expect continued contraction in postpaid average revenue per user (ARPU), exacerbated by the recent Hotlink Postpaid Flex which offers free unlimited calls/SMS with 1GB data at RM30/month and an option to purchase additional 5GB data for RM25/month.


While management indicated that there will be term conditions to prevent the migration of existing postpaid customers to the new attractive Hotlink plans, we view that the underlying trend faces substantive headwinds as peers will be launching similar products. Hence, we maintain our prepaid attrition of 10K/month for FY18F, 8K/month for FY19F and 6K for FY20F. This leads to an unchanged FY18F service revenue decrease assumption of 4% in line with guidance of mid-single digit decline.


Others :

Ikhams Jaya: Lands RM102mil flood mitigation project in Kedah                 BUY

Press Metal: Alumina shortage eases as Rusal stays afloat                            HOLD

Automobile Sector: Onto more steady ground                                                   NEUTRAL





Stocks On Radar: CCK Consolidatated, Tong Herr Resources, Aluminium Company of Malaysia, Mikro MSC     




Indonesia: Expect BI to stay neutral




IHH Healthcare: IHH ready to infuse RM2.35b into India’s Fortis

Construction Sector: Up to 40% of ECRL jobs for local firms

Oil & Gas Sector: Supply base to be built in Bintulu for O&G industry

BAT Malaysia: BAT Malaysia seeks clearer regulations





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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