Phillip Capital Research expected CelcomDigi to register a lower y-o-y fourth-quarter core net profit of RM365mil to RM370mil.
PETALING JAYA: CelcomDigi Bhd
is focusing on quality over purely expanding its base, leveraging its 20.5 million subscribers to drive sustainable growth through retention, average revenue per account (Arpa) expansion and operational efficiency.
Phillip Capital Research, which is maintaining its “hold” rating on CelcomDigi, noted in a report to clients that while average revenue per user (Arpu) remains subdued, Arpa rose 7% year-on-year (y-o-y), supported by prepaid-to-postpaid migration and convergence uptake.
“The CelcomDigi One Plan has further contributed to Arpa uplift and increased family plan adoption.
“Integration is on track for 2026, with network modernisation circa 90% and information technology consolidation more than 80% completed,” it said.
The research house noted that merger synergies continued to meet targets, driven by operating expenses efficiencies, including additional savings from site rental, energy, backhaul optimisation, and operating model rationalisation.
CelcomDigi reaffirmed annualised operating expenses savings of RM700mil-RM800mil by 2028, it said.
Phillip Capital Research expected CelcomDigi to register a lower y-o-y fourth-quarter core net profit of RM365mil to RM370mil, reflecting the absence of the green tax incentive and a competitive pricing environment.
Prepaid Arpu remained stable at RM28 and postpaid Arpu easing to RM62 in the third quarter, limiting near-term upside, it said.
Meanwhile, the home fibre segment is expected to sustain double-digit revenue growth, supported by convergence momentum and bundling initiatives, it added.
MBSB Research upgraded its recommendation to “buy” from “neutral” previously, with an unchanged target price of RM3.67.
At press time, the stock was trading at RM3.25.
“We view that the group is on a better footing as the integration activities are approaching completion by 2026.
“The group has better digital and physical channels to drive productivity and efficiency. This should help to lend support to grow the mobile service revenue,” MBSB Research told clients in its report.
Meanwhile, the telecommunications company’s enterprise solutions are also picking up pace with the offering of 5G-powered integrated intelligent solutions.
In terms expenditure, the focus will also shift from capital expenditure (capex) to operating expenditure as savings from capex have reached maturity, it said.
MBSB Research said the group’s management continued to emphasise operational excellence, which is set to be a priority in value creation and efficiency gains.
This will be the key focus for CelcomDigi from 2026, a shift from synergies, the securities firm said, adding that the savings from capex have reached maturity as contracts and operations are consolidated.
Attention would turn to reducing cost sustainably and there should be cost savings emanating from sales, rental and employees, it said.
