Maxis Berhad

$MAXIS / 6012 (MAXIS BERHAD)
Research by CGSI

KUALA LUMPUR: Maxis Bhd has signed a memorandum of understanding (MoU) with the Malaysia Retail Chain Association (MRCA), which represents 562 Malaysian retailers, to encourage the adoption of 5G technology solutions to strengthen the domestic retail sector.

KUALA LUMPUR: Maxis Bhd has signed a memorandum of understanding (MoU) with Melaka ICT Holdings (MICTH) to further develop connectivity infrastructure in the state.

© New Straits Times Press (M) Bhd

KUALA LUMPUR: Maxis Bhd could be the frontrunner in the bid to build Malaysia's second 5G network, outpacing other contenders like CelcomDigi Bhd and U Mobile Sdn Bhd, according to CIMB Securities. 

© New Straits Times Press (M) Bhd

$MAXIS / 6012 (MAXIS BERHAD)
Research by MIDF
BUY – TP RM RM4.47

" Towards A More Sustainable Growth”

• Maintain BUY with a higher target price of RM4.47 post meeting with the management
• Mobile segment remains Maxis’ core business, providing the group with the necessary funding for investment and dividend payout
• Revamped enterprise segment will serve as the impetus for future earnings growth
• The group is the frontrunner for the second 5G network, in our view

Analyst:
Foo Chuan Loong, Martin
martin.foo@midf.com.my

The big names like TMUS/Verizon in telecommunication sector of US are seeing some movements.

$MAXIS / 6012 (MAXIS BERHAD) moved ahead of CDB & $AXIATA / 6888 (AXIATA GROUP BERHAD), is telecom back as a defensive rotation amidst recession fear?

Plus, 5G is another overlooked strength of Malaysia when it comes to data Center/AI. The utilization is getting higher and rating of 5G is globally recognised. Alongside with the exemption of undersea cable repair works, it is sort of resounding how telecommunication works is also at the core of attracting big tech like MSFT to Malaysia, other than the cheap lands and energy generation reasons.

If we give a bit more far fetched imagination, the realisation of AI adoption by end user in terms of automated driving, smart city etc, needs a low latency network.

Data centre & AI
1. Land to build by property counters ✅
2. Energy by $TENAGA / 5347 (TENAGA NASIONAL BHD) ✅
3. 5G? 🤔

Of course, this is very forward looking thoughts that may take year if not longer. Just a food for thought. I’m keeping an close eye on the telecom names till next year

$TM / 4863 (TELEKOM MALAYSIA BERHAD)
$KLSE-CDB
$MAXIS / 6012 (MAXIS BERHAD)
$YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD)

$MAXIS / 6012 (MAXIS BERHAD)
Research by Apex
Buy - TP RM4.32

"Exciting growth venue from data centre"

• Maxis recorded CNP of RM365.0m (+9.9% yoy, +2.8% qoq) in 2QFY24, bringing 1HFY24 CNP to RM720.0m (+9.4% yoy), which was in-line with ours and consensus’ expectations, accounting for 54% and 51% of forecasts respectively.
• We adjust our FY24-26 earnings by +7.1%/+6.6%/+6.1% to account for the revision in EBITDA guidance and growth opportunity in the data centre space.
• Re-iterate our BUY recommendation with higher TP of RM4.32, based on DCF valuation (WACC of 6.5% with a long-term growth rate of 0.5%).

Analyst:
Steven Chong
stevenchong@apexsecurities.com.my

$MAXIS / 6012 (MAXIS BERHAD)
Research by Kenanga
MARKET PERFORM – TP RM3.74

"Steady Cost Discipline”

MAXIS’s 1HFY24 results tracked expectations on the back of tight cost controls. Despite growth in areas such as enterprise solutions, we believe that MAXIS's premium valuations may be eroded. This considers its smaller scale in a mature and competitive market, where its main competitor has recently gained traction in realizing merger synergies. We maintain our forecasts, but cut our TP by 29% to RM3.74 (from RM5.30) and downgrade our recommendation to MARKET PERFORM from OUTPERFORM. A re-rating catalyst could be earlier-than-expected monetization of 5G from enterprises

Analyst:
Kylie Chan Sze Zan
kyliechan@kenanga.com.my

$MAXIS / 6012 (MAXIS BERHAD)
Research by Public
Neutral – TP RM3.90

"Stable Growth”

Maxis Bhd (Maxis) posted a 7.9% increase in 2QFY24 net profit to RM356m, mainly driven by higher postpaid, home-fibre and enterprise revenue through the offering of attractive plans, bundle deals and fixed connectivity services. For 1HFY24, net profit of RM709m came in within expectations, accounting for 51% and 50% of our and consensus full-year estimates respectively. Being a leading integrated telco player, Maxis remains steadfast with its strategy to grow the mobile, fibre and enterprise business. Thus far, we have observed positive traction in these segments. Our earnings forecasts remain unchanged. Maintain Neutral on Maxis with an unchanged TP of RM3.90. A second interim dividend of 4.0sen per share was declared (1QFY23: 4.0sen per share).

Analyst:
Eltricia Foong
eltriciafoong@publicinvestbank.com.my

$MAXIS / 6012 (MAXIS BERHAD)
Research by HLIB
HOLD – TP RM3.93

"Raising FY24 guidance”

1H24 core net profit of RM790m (+9% YoY) was in line. Declared second interim DPS of 4 sen. Postpaid sub base grew by catering to all market segments through wide range of pricing and devices plans. Home connectivity recorded solid numbers with connections up by 71k (+10%) YoY and an increase in revenue by 10% YoY to RM244m. FY24 EBITDA guidance was raised to marginal to low single digit growth. Reiterate HOLD on the back of unchanged DCFderived TP of RM3.93.

Analyst:
Tan J Young
jytan@hlib.hongleong.com.my

$MAXIS / 6012 (MAXIS BERHAD)
Research by Maybank
HOLD – TP RM 3.70

"Stable delivery”

Maxis’ 2Q24 results were in-line with our/consensus forecasts, with Maxis maintaining a 4sen quarterly DPS. While we believe 5G capex risk is pricedin to some extent (given the YTD share price correction), we see an absence of strong re-rating catalysts in the next 12 months. Maintain HOLD with a lower DCF-based TP of MYR3.70 (-8%). We prefer CelcomDigi (CDB MK, BUY, CP: MYR3.53, TP: MYR4.50) in the telco space.

Analyst:
Tan Chi Wei, CFA
chiwei.t@maybank-ib.com

$MAXIS / 6012 (MAXIS BERHAD)
Research by APEX
BUY – TP RM 4.32

" Exciting growth venue from data centre”

• Maxis recorded CNP of RM365.0m (+9.9% yoy, +2.8% qoq) in 2QFY24, bringing 1HFY24 CNP to RM720.0m (+9.4% yoy), which was in-line with ours and consensus’ expectations, accounting for 54% and 51% of forecasts respectively.
• We adjust our FY24-26 earnings by +7.1%/+6.6%/+6.1% to account for the revision in EBITDA guidance and growth opportunity in the data centre space.
• Re-iterate our BUY recommendation with higher TP of RM4.32, based on DCF valuation (WACC of 6.5% with a long-term growth rate of 0.5%).

Analyst:
Steven Chong
stevenchong@apexsecurities.com.my

$MAXIS / 6012 (MAXIS BERHAD)
Research by TA
HOLD – TP RM3.80

" Resilience Intact”

 After incorporating the ESG premium/discount based on our latest internal guidelines, we revised the target price from RM3.70 to RM3.80, based on DCF valuation with a WACC of 8.3% and LT growth rate of 1.0%. Upgrade the stock from Sell to Hold.
 Key risks include unfavourable terms for 5G commercialisation, heightened price competition, and regulatory changes

Analyst:
Chan Mun Chun
mcchan@ta.com.my

$MAXIS / 6012 (MAXIS BERHAD)
Research by MIDF
BUY – TP RM 4.17

"Enterprise Converged Revenue Grew at A Faster Pace”

• Upgrade to BUY with a higher target price of RM4.17 post the announcement on 2QFY24 results
• Better 2QFY24 service revenue of RM2.2b (+3.7%yoy), led by all segments except for the consumer prepaid segment
• Careful capital spending lends a hand to a stronger operating free cash flow
• More opportunity in the enterprise segment as the group seeking to strategically expand its offering

Analyst:
Foo Chuan Loong, Martin
martin.foo@midf.com.my

$KLSE-CDB $MAXIS / 6012 (MAXIS BERHAD) $TM / 4863 (TELEKOM MALAYSIA BERHAD)

$MAXIS / 6012 (MAXIS BERHAD)

$MAGNUM / 3859 (MAGNUM BERHAD): A Major Beneficiary of U Mobile's Listing

I've previously discussed U Mobile and Magnum in several posts, which you can refer to for more background. In this post, I'll focus on the latest developments.

In the most recent update, Magnum holds a 7.84% stake in U Mobile, which differs from earlier information. U Mobile is currently the third-largest mobile telecommunications service provider in Malaysia, with approximately 6 million users. Its main competitors include $KLSE-CDB, $MAXIS / 6012 (MAXIS BERHAD), and Yes (under YTL Communications).

Last month, reports surfaced that Maxis was considering a buyout of U Mobile, with U Mobile's owners seeking a valuation exceeding RM10 billion. However, new reports indicate that U Mobile has rejected the buyout offer and is planning an initial public offering (IPO). U Mobile is backed by several strong parties (refer to earlier posts for details), and shareholders are aiming for a valuation between RM9 billion and RM11 billion.

Given this valuation range, Magnum's 7.84% equity stake in U Mobile would be worth between RM706 million and RM862 million, representing approximately 39.7% to 48.4% of Magnum's market cap. It appears that the full value of U Mobile has yet to be fully realized, as Magnum is currently trading at a P/E ratio of 13.11, which is typical for the company and higher than Sports Toto's ($KLSE-SPTOTO) single-digit P/E ratio.

In conclusion, the listing of U Mobile is likely to provide a positive outlook for Magnum, as the company's hidden value is finally being unlocked.

Related articles:
1. https://cutt.ly/Mecs580O
2. https://cutt.ly/Xecs58RE

$KLSE-CDB
$MAXIS / 6012 (MAXIS BERHAD)
$YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD)
$TM / 4863 (TELEKOM MALAYSIA BERHAD)

$MAXIS / 6012 (MAXIS BERHAD)

$MAXIS / 6012 (MAXIS BERHAD)

$MAXIS / 6012 (MAXIS BERHAD)

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

$KLSE-CDB
$MAXIS / 6012 (MAXIS BERHAD)
$YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD)
$TM / 4863 (TELEKOM MALAYSIA BERHAD)

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

OTHERSMAXIS BERHAD ("MAXIS" OR "COMPANY")
OFFER OF PERFORMANCE SHARE AWARD UNDER LONG TERM INCENTIVE PLAN FOR THE ELIGIBLE EMPLOYEES OF MAXIS AND ITS SUBSIDIARIES ("LTIP")

Additional Listing Announcement /Subdivision of Shares

OTHERSMaxis Berhad ("Maxis") : Proposed Investment in Digital Nasional Berhad ("Proposed Investment")

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD ('EPF BOARD')