KUALA LUMPUR: Maxis Bhd
’s FY17 results met expectations, with earnings before interest, tax, depreciation and amoritsation (Ebitda)/core earnings per share at 98%/97% of CIMB Equities Research’s forecasts (Bloomberg consensus: 100%/104%).
It said on Friday mobile service revenue declined 1.5% on-quarter, as healthy postpaid was more than offset by an accelerated fall in prepaid.
The Ebitda margin eased 0.6 percentage points on-quarter to 55.2%, largely from some one-off operation and maintenance (O&M) cost and realised forex losses.
“We maintain our Hold call on Maxis, with an unchanged DCF-based target price of RM5.80 (WACC: 7.0%).
“We expect subdued near-term earnings performance due to the termination of the UM 3G RAN sharing contract and continued pressure in prepaid. Its FY18F enterprise value/operating free cashflow of 16.4 times is trading at a 5% premium to the Asean telco average, with decent FY18-20F dividend yields of 3.3-4.0%.
“Downside risk: structural headwinds as the market approaches network parity. Upside risk: better sales growth,” it said.
Limited time offer:
Just RM5 per month.
