PETALING JAYA: CGS International (CGSI) Research has adjusted its financial year 2026 (FY26) and FY27 core net profit estimates for Axiata Group Bhd
downward by 11.5% and 24%, respectively, while raising its FY28 estimate by 1.1% to reflect a stronger ringgit versus its operating currencies, as well as lower earnings estimates for CelcomDigi Bhd and XLSmart.
Axiata is one of the controlling joint shareholders of XLSmart, a major Indonesian telecommunications provider. CelcomDigi is co-owned by Axiata Group and Telenor Asia.
The research house said: “The sale of Edotco and Link Net at our estimates of fair value, totalling RM10.9bil, would lift our FY26 and FY27 core net profit estimates by 16.1% and 3.3%, respectively, assuming all proceeds are used to pay down debt at an interest rate of 3.5%.
“We do note that Axiata Group’s net debt stood at RM6.4bil as at end-September 2025, implying room to increase dividends post-disposal.”
Edotco is a tower company and Axiata’s infrastructure services firm, while Axiata Group, through its subsidiary PT XL Axiata, acquired a majority stake in the Indonesian broadband provider Link Net in 2022.
On another note, CGSI Research said it believes the 9.5% month-on-month decline in Axiata Group’s share price in January 2026, driven by concerns that the monetisation of Edotco may attract a lower-than-expected valuation is overdone.
The research house added that as foreign ownership of Edotco’s Malaysian assets is capped at 49%, and some frontier market assets such as those in Bangladesh may be carved out to accommodate certain buyers, any reference to pricing in the press may not fully reflect final valuations.
CGSI Research said it is looking forward to Axiata’s Investor Day 2026 on Feb 9 for updates on the monetisation of its infrastructure assets, which management had planned to announce in 2025.
The brokerage reiterated its “add” call on Axiata with a revised revalued net asset value-derived target price of RM3.22.
