STOCK FOCUS OF THE DAY
Digi.Com: High likelihood of May syariah reinstatement HOLD
We maintain our HOLD rating on Digi.Com with unchanged forecasts and DCF-based fair value of RM4.50/share, which implies an FY18F EV/EBITDA of 13x, the stock’s 2-year average.
Although no guidance has been provided by management on Digi’s reinstatement into the Securities Commission’s syariah compliance list by May this year, we view it as a strong likelihood given that the group has already achieved a conventional loan- to- total asset ratio of below 33% since 2QFY17, and down to 31% as at 21 March 2018. Additionally, Digi has submitted its FY17 audited accounts before the cut-off date on 31 March 2018.
The stock currently trades at a fair FY18F EV/EBITDA of 13x near its 2-year average of 14x. 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.
Others :
Salutica: High R&D costs to eat into profit margin BUY
QUICK TAKES
Plantation Sector: News flow for week 16 — 20 April NEUTRAL
RETAIL RESEARCH
Stocks On Radar: Caely Holdings, Lotte Chemical Titan, Hock Seng Lee, Boilermech
ECONOMIC HIGHLIGHT
Japan: Still facing challenge on inflation
NEWS HIGHLIGHTS
Timber Industry: M’sia to gain from US duties on Chinese plywood imports
Kim Loong Resources: A less rosy outlook in FY19
HSS Engineers: Plans to grow order book
Federal Furniture Holdings: Sees profit to be construction-led
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