STOCK FOCUS OF THE DAY
Axiata Group: Unchanged EBITDA guidance, normalising dividends BUY
We maintain our BUY call on Axiata Group (Axiata) with an unchanged sum-of-parts-based fair value of RM6.60/share, which translates to an FY19F EV/EBITDA of 6.5x, half of Singapore Telecommunications (SingTel). Our valuation is premised on a potential value-enhancing re-merger with TM which could reduce the valuation differential with its peers and re-energise its earnings prospects.
Axiata’s forecasts are maintained as 1QFY18 normalised net profit of RM200mil (pre-MFRS 15), which excludes RM358mil loss from the dilution of Idea’s stake from 20% to 16%, was generally in line with expectations even though it accounted for 17% of our FY18F earnings and 14% of consensus. For now, we adhere to management’s unchanged guidance for an FY18F EBITDA growth of 5.8% based on constant currency.
Others :
Inari Amertron: Earnings momentum continues BUY
Salutica: Temporary setback in 3QFY18 BUY
Telekom Malaysia: Weak 1QFY18 re-accentuates need for re-merger BUY
Lafarge Malaysia: Still in the red in 1QFY18 HOLD
UMW Holdings: A steady 1Q HOLD
RETAIL RESEARCH
Stocks On Radar: AWC, Mah Sing Group, Datasonic Group, Hock Seng Lee
NEWS HIGHLIGHTS
Credit rating: Malaysia’s credit rating threatened by GST removal
AirAsia X: Net profit soars
Tropicana Corp: Earnings 71.5% higher in quarter one
Kossan: Targets double-digit capacity growth in two years
DISCLAIMER:
The information and opinions in this report are 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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