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Earnings Forecast Re-Rating Unlikely For Maxis
Malaysia Daily Bulletin | 11 August 2015
  • Albeit retaining its hold call for Maxis, Affin Hwang Capital Research has lowered its 12-month target price of its previous RM7.19 to the current RM6.70.
  • In a meeting held recently with Maxis’ management, it was noted that data pricing was at a crossroad, and whether the industry would return to mid-single- digit growth would hinge on rational competition among the mobile incumbents.
  • Management believes that or the industry to show healthy growth going forward, it is important for the industry as a whole to focus on growing ARPUs via rational data pricing.

Significance: The research house tweaked its 2015-17E earnings forecasts lower by three percent – 7 percent due to higher depreciation charges after fine tuning its capex assumptions higher from RM800 million to RM1.1 billion per annum based on management’s guidance.

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