PETALING JAYA: Maxis Bhd
is well positioned to sustain positive investor sentiment as its improving earnings profile and environmental, social and governance (ESG) credentials strengthen its long-term investment appeal.
Against this backdrop, MBSB Research reiterated its “buy” recommendation for Maxis, with an unchanged target price of RM4.05.
The research house said the telecommunications provider has delivered a notable improvement in profitability over the past three financial years, while continuing to strengthen its sustainability credentials in response to evolving investor expectations, regulatory requirements and stakeholder demands.
“In recent years, Maxis’ profit after tax (PAT) has recorded a commendable performance. For context, the PAT has improved to RM1.56bil in financial year 2025 (FY25) from RM993mil in FY23.”
While profitability remains a key focus, it said Maxis has continued to place significant emphasis on sustainability, as reflected in its external ESG assessments.
“This is reflected in the various ESG-related ratings the group has obtained.
“We view that having such an approach is important due to investor preference, regulation requirements, as well as stakeholder expectations,” it noted.
Maxis currently holds an MSCI ESG Rating of AA, a Morningstar Sustainalytics ESG Risk Rating of 23.2, categorised as “medium risk”, and an ESG Rating of 3.3 on the FTSE4Good Bursa Malaysia Index.
According to MBSB Research, the MSCI ESG Rating reflects strong management of financially material, industry-specific ESG risks and the Morningstar Sustainalytics assessment indicates moderate exposure to ESG-related risks that may not be fully mitigated, while the FTSE Russell three-star rating signifies a robust ESG performance.
“Major institutional investors are increasingly putting more emphasis on ESG disclosure as a consideration to assess long-term financial resilience and risk.
“The ESG standards have been incorporated into the mandate to drive sustainable value creation,” it added.
Moreover, MBSB Research noted that regulatory developments are also reinforcing the importance of sustainability reporting.
It said large Main Market-listed companies are required to comply with the National Sustainability Reporting Framework, which adopts the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards IFRS S1 and IFRS S2 to improve the quality, reliability and comparability of corporate sustainability information.
Beyond investors and regulators, it said customers and employees are also showing a growing preference for organisations with strong ESG commitments.
While acknowledging that all three ESG pillars are important, the research house argued that companies in the telecommunications sector should prioritise governance as the foundation for broader sustainability efforts.
“We view that executing the ESG priority in the order of governance, then social, and finally, environmental, would lead to a more effective outcome,” it said.
The research house pointed out that ESG encompasses areas with differing scopes, capabilities and implementation timeframes, making careful resource allocation essential to balance sustainability objectives with operational performance and stakeholder expectations.
Meanwhile, one analyst concurred that ESG considerations are increasingly becoming part of mainstream investment analysis.
“It will work in the companies’ favour if they have high ESG standards, in addition to strong earnings visibility.
“Investors these days are placing greater emphasis on how sustainability practices contribute to long-term business resilience, governance quality and risk management, especially for companies operating in regulated industries,” he added.
