Maxis purchase of MyKRIS seen as fair

PETALING JAYA: The acquisition price of MyKRIS Asia Sdn Bhd by Maxis Bhd is fair.

The acquisition was recently completed at a total cash consideration of up to RM157.5mil, reflecting a price-to-earnings ratio (PER) of 17.5 times.

“This is lower than the PER of Maxis at 27 times.

“We expect the funding requirement of RM157.5mil to have a marginal impact on Maxis, as it had a cash pile of RM1.2bil in the third quarter of the financial year 2021,” MIDF Research said in its latest report.

Maxis’ net gearing is also expected to increase to 1.29 times from 1.27 times after this acquisition, it said.

MIDF Research said the completed acquisition would strengthen Maxis’ position as the leading converged solutions provider in Malaysia.

This would help enhance its Managed Services capability, which is the important bridgehead linking Maxis’ mobile and fibre network connectivity with broader solutions including cloud services and digital solutions, it said.

Earlier, Maxis unit Maxis Broadband Sdn Bhd had entered into an agreement with MyKRIS International Bhd and its vendors, Chang Wai Hoong and Chew Choo Soon, to acquire MyKRIS Asia, the main operating subsidiary of Leap Market-listed MyKRIS International.

MIDF Research also noted that earnings contribution from the acquisition would be negligible on Maxis’ earnings in the near term.

The research house has maintained its “neutral” call on Maxis with the target price kept at RM4.50 per share.