Friday, 1 June 2012

Maxis Bhd - MARKET PERFORM - 1 Jun 2012


Period   1Q12
Actual vs.  Expectations
1Q12 core NP of RM557m came in within consensus estimate and that of ours. The core earnings accounted for 22.9% and 23.9% of ours and the street’s full-year forecasts. 

Dividends  8.0 sen interim single-tier dividend was declared, as expected. We expect Maxis to declare a total dividend of 40.0 sen in FY12.  

Key Result Highlights
YoY, revenue rose 5% to RM2.23b driven by higher contribution from all business segments namely mobile services (+5% to RM2.13b); Enterprise fixed services (+5% to RM46m) and home business (+100% to RM8m) but partially offset by lower international gateway revenue (-4% to RM46m). The group’s EBITDA grew 4% to RM1.13b with EBITDA margin stood at 50.8% (vs 51.1%). In tandem with higher EBITDA and lower effective tax rate, the group’s core NP grew by 3% to RM557m.

QoQ, turnover was down by 2% while reported NP  drop  by  -36%  due  mainly  to  an  absent  of RM328m tax incentive recognized in the preceding quarter. 

Non-voice revenue grew 13% YoY to RM970m and contributed 45.5% of mobile revenue. 

90k net loss in subscribers in 1Q12 comprised of -129k in postpaid users but partially offset by +39k subscribers in the prepaid segment that mainly driven by Bagus plan.  

On the Home services front, 41k customers have subscribed to the services in 1Q12 and generated RM8m in turnover but suffered RM22m losses at EBITDA level. 

Outlook  The group maintained its FY12 headline KPIs target (Revenue +5% YoY; EBITDA margin <50%) and capex guidance of slightly less than RM1.0b.  

Change to Forecasts
Fine-tuning our FY12, FY13 and FY14 PAT by -1.3%, -1.0% and -1.1% to RM2.41b; RM2.45b; and RM2.48b, respectively.    

Rating  Maintain MARKET PERFORM

Valuation   Raise Maxis TP to RM6.00 (from RM5.80 previously), based on higher targeted FY12 EV/forward EBITDA of 11.2x (+1.5 SD) as a result of better growth momentum. 

Risks  Higher than expected margin pressure.   

Source: Kenanga

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