Maxis Bhd - Earnings on Track, Steady Growth Ahead
Wed, 19-Feb-2025 07:13 am
by Steven Chong • Apex Research

Counter

MAXIS (6012)

Target Price (RM)

4.300

Recommendation

Buy

Summary

  • Maxis’s 4QFY24 CNP jumped +52.4% yoy and -13.9% qoq to RM323.0m, bringing FY24 CNP at RM1.4bn, which deemed within expectations, accounted to 99.9% and 101.6% of ours and consensus expectations respectively.

  • Given that the reported earnings are deemed within expectations, we kept our forecast unchanged.

  • Re-iterate our BUY recommendation with an unchanged target price of RM4.30, derived from DCF valuation with WACC of 6.6% and long-term growth rate of 0.5%.

 

Results within expectations. FY24 CNP at RM1.4bn (+16.6% yoy) came within expectations, accounting to 99.9% of our CNP forecast and 101.6% of consensus CNP estimation.

 

YoY. 4QFY24 CNP jumped +52.4% yoy to RM323.0m, lifted by stronger revenue contribution due to net adds in postpaid subscribers and surge in contract deliveries and project completions within the enterprise segment. Revenue for the quarter grew by +7.6% yoy to RM2.8bn. 

 

QoQ. CNP decreased by -13.9% qoq, on the back of an uptick in operational expenses. Meanwhile, revenue for the quarter climbed +1.1% qoq.

 

Outlook. Maxis' 2025 guidance includes: i) low single-digit growth in service revenue and ii) flat to low single digit EBITDA growth. The cautious outlook stems from uncertainty, as Maxis aims to drive growth in its home fibre segment, which could result in more volatile margins compared to its established mobile services. At the same time, with a clearer understanding of the 5G operating framework and its experience collaborating with DNB, Maxis plans to increase capital expenditure in FY25. This investment is intended to improve network infrastructure with DNB, enhancing the overall customer network experience.

 

Earnings Revision. Given that the reported earnings are deemed within expectations, we kept our forecast unchanged.

 

Valuation. Re-iterate our BUY recommendation on MAXIS with unchanged target price of RM4.30, based on DCF valuation with a WACC of 6.6%, long-term growth rate of 0.5% and 0% ESG factored premium/discount based on three-star ESG rating.

 

Risk. Price slashing by competitors. Changes in government regulations. Higher-than-expected 5G capex affecting cashflow and dividend.

Read more details in:

Disclaimer

The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.

Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.

Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 4.390206 4.425718
EUR 5.008717 5.015095
CNY 0.603029 0.603828
HKD 0.565660 0.569770
SGD 3.345779 3.370205