Maxis Bhd - Results In Line; Solid Start Backed by Cost Discipline
Mon, 19-May-2025 07:32 am
by Steven Chong • Apex Research

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MAXIS (6012)

Target Price (RM)

4.00

Recommendation

Buy

  • Maxis’s 1QFY25 CNP was up +4.5% yoy and +14.9% qoq to RM371.0m, which we deemed within expectations, accounting for 25.4%/24.9% of both 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 TP of RM4.00, derived from DCF valuation with WACC of 7.0% and long-term growth rate of 0.5%.

 

Results within expectations. 1QFY25 CNP stood at RM371.0m came within expectations, accounting for 25.4% of our CNP forecast and 24.9% of consensus CNP estimation.

 

YoY. 1QFY25 CNP climbed +4.5% yoy, underpinned by prudent cost management. Revenue was relatively flat, inching up +0.2% yoy to RM2.6bn, partly impacted by softer postpaid ARPU as the Group continued to attract new subscribers through its more price-sensitive postpaid plan. Nevertheless, topline performance was supported by sustained growth in the postpaid and home fibre subscriber base, along with a notable increase in enterprise contract deliveries.

 

QoQ. CNP rose by +14.9% qoq, supported by lower device costs following a reduction in subsidies. Meanwhile, revenue declined -5.9% qoq, reflecting the seasonal slowdown in device sales post the flagship smartphone launch cycle in 4QFY24.

 

Outlook. Management has reaffirmed headline guidance, projecting low single‑digit growth in service revenue and flat to low single‑digit growth in EBITDA. The Group has also adopted a more optimistic stance on subscriber growth in both consumer and enterprise—targeting a total of 11.3m users (+7.7% yoy) in FY25.

 

In regards to update on U Mobile’s departure from DNB, the MOF has no plans to exercise its exit option from the 5G wholesale network thus far, and will therefore remain the largest single shareholder with a 41.7% stake. Assuming a similar run‑rate to last year, we anticipate Maxis’s 5G access costs should stay below c.RM 200m for FY25.

 

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 RM4.00, based on DCF valuation with a WACC of 7.0%, 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.

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