PETALING JAYA: While Maxis Bhd
’s core net profit for the third quarter of this year (3Q25) is expected to remain broadly stable quarter-on-quarter (q-o-q), its steady subscriber momentum is likely to be offset by subdued average revenue per user (Arpu) trends in an increasingly competitive market.
Phillip Research said Maxis’ 3Q25 core net profit is likely to come in at between RM395mil and RM400mil (2Q25: RM394mil, 3Q24: RM355mil), supported by ongoing mobile subscription growth and led by postpaid and continued improvement in prepaid churn.
“Prepaid Arpu held steady at RM28 to RM29 through last year but eased to between RM26 and RM27 in the first half of this year (1H25), while postpaid Arpu moderated to between RM64 and RM65 (versus RM67 to RM68 last year). Given the current market dynamics, we do not anticipate a meaningful near-term Arpu improvement,” the research house said in a report yesterday.
Nonetheless, Phillip Research said mobile subscriptions are expected to continue expanding, led by postpaid growth and supported by stronger data offerings.
On the prepaid front, the research house said positive churn reversal seen in 1Q25 to 2Q25 is likely to persist, aided by resilient Arpu management through targeted product offerings.
Maxis is slated to release its 3Q25 results tomorrow.
At the same time, Phillip Research said management guided for modest revenue growth this year.
“Maxis is guiding for low single-digit service revenue growth, flat-to-low single-digit earnings before interest, taxes, depreciation and amortisation growth, and capital expenditure of about RM1bil for this year.
“Maxis reported core net profit of RM764mil in 1H25 and looks on track to achieve our full-year core profit forecast of RM1.5bil,” the research house said.
Phillip Research said it forecast the group’s service revenue to grow modestly by 2% to 4% from this year to 2027, supported by operational efficiencies and cost optimisation driving stronger core net profit growth of 5% to 9% over the same period.
“Prepaid Arpu is expected to remain broadly stable, while postpaid Arpu may stay subdued, as continued migration from prepaid to entry-level postpaid plans puts pressure on blended Arpu.
“Fibre Arpu is expected to remain resilient, supported by competitive and value-driven bundled offerings. However, subscriber growth is likely to remain moderate amid a competitive market, as Telekom Malaysia Bhd continues to hold a structural advantage with its nationwide coverage,” the research house said.
In 2Q25, Maxis sustained steady subscriber growth in across all segments, with postpaid users rising 10.1% year-on-year (y-o-y) to 5.6 million, supported by enhanced data offerings.
“In comparison, prepaid and home fibre subscribers grew more modestly by 1.4% and 2.8% y-o-y, respectively. Blended Arpu remained lacklustre at a historical low of RM42 to RM43, pressured by intense price competition, particularly from entry-level Hotlink Postpaid plans,” the research house said.
Phillip Research said assuming a payout ratio of 80% to 90%, it projects Maxis to sustain an annual dividend per share of 17 sen from this year to 2027, implying an annual dividend yield of 4.4% during the period.
“We view this payout level as sustainable, despite ongoing 5G investment requirements, underpinned by steady cash flow.
“On a relative basis, Maxis’ dividend yield remains among the most attractive within the sector, exceeding the peer average of 3.9%,” the research house said.
Phillip Research maintained a “hold” call on Maxis with a target price of RM3.64.
It noted that notwithstanding Maxis’ positive earnings outlook and stable dividend payout, it expects continued uncertainty in Malaysia’s 5G deployment timeline, and the complexity of multi-party coordination may continue to weigh on investor sentiment and its share price.
