KUALA LUMPUR, Aug 2 — AmInvestment Bank Bhd has upgraded its call for Maxis Bhd to ‘buy’ from ‘hold’ due to its 19 per cent share price decline over the past year with an unchanged discounted cash flow (DCF)-derived fair value of RM5 per share.
In a note today, it said the forecast for Maxis’ first half of financial year 2021 (1HFY21) normalised net profit of RM694 million was also maintained as it was within its expectation of 48 to 50 per cent.
“Maxis’ 1HFY21 tax-exempt dividend per share (DPS) of eight sen (flat year-on-year (YoY) translates to a payout ratio of 90 per cent, which is also in line with our FY21F–FY23F assumption.
“Maxis’ second quarter of financial year 2021 (2QFY21) net subscribers continued to rise by 155,000 to 11.7 million as the postpaid segment’s 127,000 increase to 4.1 million was partly offset by prepaid declining by 5,000 to 7.4 million due to the impact of COVID-19 Movement Control Orders (MCO), and prepaid subscribers’ migration to postpaid,” it said.
The research bank noted that Maxis’ blended average revenue per user (ARPU) was stable at RM47 per month despite the postpaid segment slipping by RM1 per month to RM75 per month from new subscribers at lower entry price.
“All in, the proportion of postpaid to mobile services was flat YoY at 59 per cent in 2QFY21.
“Additionally, the fixed line business maintained its upward momentum with home fibre users rising 21,000 quarter-on-quarter (QoQ) to 444,000, business fibre up by 1,000 to 43,000 despite MCO constraints. Home fibre ARPU rose slightly by RM1 per month QoQ to RM198 per month,” it added.
Meanwhile, CGS-CIMB maintained its ‘hold’ call for Maxis with a lower DCF-based target price of RM4.60 per share.
“Post 2QFY21 results, we cut FY21-23F core earnings per share (EPS) by 4.7 to 7.1 per cent, mainly to pencil in lower fixed enterprise revenue.
“We now see FY21F core EPS rising 2.2 per cent YoY on bad debt normalisation (excluding this: -7.0 per cent YoY), then up 13.0 per cent/3.6 per cent in FY22F/23F, on mobile revenue recovery (roaming, migrant/tourist subs) and enterprise/home fibre growth,” said the research house.
As at 11.40am, Maxis share price on Bursa Malaysia stood at RM4.24 per share. — Bernama