PETALING JAYA: Maxis Bhd
’s second quarter ended June 30, 2025 (2Q25) results, where revenue dipped and profit improved, came in within expectations as cost efficiencies balanced weaker service revenue.
Operationally, Hong Leong Investment Bank (HLIB) Research said Maxis’ postpaid momentum remained healthy in 2Q25, with 58,000 net adds.
The company’s 2Q25 results represented 53% of HLIB Research’s full-year forecast and accounted for 52% of consensus estimates.
“Meanwhile, prepaid saw only a modest 21,000 net churn but registered a positive average revenue per user (Arpu) uplift quarter-on-quarter.
“Home broadband was steady with Arpu at RM110, though net additions remained low at 1,000 due to competition,” said HLIB Research, which has a “buy” call on the stock.
In a separate note, Kenanga Research pointed out that Maxis’ service revenue fell 0.7% in the first six months of 2025 (6M25), missing Maxis’ own guidance of low single-digit growth.
If not for the SafeDevice accounting treatment, apart from the reduced regulated interconnect rates, service revenue would have grown, it said.
To recap, the SafeDevice scheme offers smartphone insurance-like coverage, but from 1Q25 onwards, Maxis has been recognising only net commissions instead of the gross amount.
Despite top-line weakness, Kenanga Research said Maxis’ core net profit in 6M25 expanded by 7% year-on-year, mainly driven by cost efficiencies, particularly lower device subsidies from improved terms with device manufacturers.
The research house also reported that overall subscriber trends remained robust, albeit with mixed prepaid performance.
“We lowered our traffic cost assumptions in the financial year 2025 (FY25) to FY26 to align with actual 6M25 run rates, resulting in a 7% rise in FY25 earnings, followed by a 2% increase in FY26.
“We cut our target price for Maxis to RM3.56 per share from RM3.80 after lowering our valuation multiple.
“This reflects our concern over potential future earnings headwinds, as we cannot fully discount the possibility that Maxis and other mobile network operators may transition from usage-based billing for 5G access to fixed minimum fees,” it said.
Kenanga Research kept its “market perform” call on Maxis unchanged.
Meanwhile, CGS International (CGSI) Research upgraded its rating for Maxis to “add”, with a higher target price of RM4.
Pointing out that Maxis’ valuations appear attractive, the research house also said that the stock offers a 5.2% dividend yield.
“We raise our core net profit estimates for FY25 to FY27 by 1.7% to 2.9% but note that the sales and service tax impact on tower leases as well as 5G network ownership and rollouts are key uncertainties.
”Maxis has also updated its FY25 guidance by raising capital expenditure (capex) guidance from below RM1bil to “about RM1bil”, with the guidance signalling new project wins.
CGSI Research said the management expects some resolution, at least on the way forward, for 5G network ownership by end-2025 but provided no details.
“Our current estimates assume Maxis incurs capex for one of the two 5G networks.
“Partnering with another operator would result in a lower capex trajectory versus our current estimates, all else being equal.
“However, until there is clarity on this matter, we maintain our current view.”
