PETALING JAYA: A research firm is upgrading its call from “hold” to “buy” for Axiata Group Bhd
as it foresees a potential asset monetisation over the next six to 12 months.
Telecommunications company Axiata, through its subsidiary PT XL Axiata, had acquired a majority stake in the Indonesian broadband provider Link Net in 2022.
It later began exploring the sale of this stake. In a report, CIMB Securities Research said it believes the bidding process for Link Net could be underway and finalised by the first half of 2026.
“Thus, we now ascribe an equity value of RM1.46bil to Axiata’s 73.5% stake in Link Net. Factoring this in, as well as removing the holding company, Holdco’s discount on Edotco and Link Net, given their impending sale, we raise our target price by 12% to RM2.90,” it said.
According to the research house, it did not assign any value to Link Net in its sum-of-parts valuation for Axiata as it was loss-making and the timeline for its divestment was uncertain
It was also reported by DealStreetAsia that Solusi Sinergi Digital and I Squared Capital have been front runners for the stake. Furthermore, DealStreetAsia noted the deal could value Link Net at more than US$1bil, which is likely the enterprise value.
“Given Link Net’s net debt of US$391mil at the end of 2025, this implies an equity value of US$609mil.
“Thus, Axiata’s 73.52% stake could be worth US$448mil. If the Link Net sale is realised at DealStreetAsia’s reported US$1bil enterprise value, it would further raise our target price by five sen,” CIMB Securities Research said.
Meanwhile, the research firm also made note of how the sale will no longer drag Axiata’s earnings.
It said it raised its financial year 2025 (FY25) to FY27 core net profit forecasts by 2% to 4% to account for its sale of a 4.95% stake in Link Net in late August 2025 at a reported share price of 3,060 rupiah.
With a reduction in share of Link Net’s losses to 73.52% from 78.47%, the estimated sale proceeds of around RM111mil will also lower net interest cost.
“Based on our revised core net profit forecast for Axiata, we are currently factoring in RM348 to RM351mil share of net losses from Link Net for FY26 to FY27.
“For illustration purposes, if Link Net is sold by the end of FY25, it would boost our FY26 and FY27 core net profit projections by 51% and 29%, respectively.”
CIMB Securities Research noted key downside risks include the telco’s companies’ asset monetisation initiatives either failing to materialise or yield unattractive valuations.
