Maxis shares lower in morning session on weaker Q3 results

Maxis shares lower in morning session on weaker Q3 results

KUALA LUMPUR,. Maxis Bhd’s shares fell in the morning session today after posting weaker third quarter financial results.

At 11.15am, Maxis shares were down 13 sen to RM5.38 with 447,100 shares changing hands.

Public Investment Bank in a research note today said Maxis posted a nine per cent decline in the third quarter of financial year 2018 net profit to RM513 million mainly due to lower prepaid revenue.

“Stripping out foreign exchange losses and other non-operating items, core net profit dropped 7.7 per cent to RM518 million,” it said.

Nevertheless, it said Maxis’ nine-month financial year 2018 results came in within expectations, accounting for 78 per cent of the investment bank’s and consensus full-year estimation.

Kenanga Investment Bank in a separate note said moving forward, Maxis is set to continue to drive enterprise business solutions supported by higher momentum of business fibre.

It said the company also plans to enhance digital capabilities through the digital transformation programme and widen its market share in the home fibre segment.

“Having said that, Maxis’ management is expecting to face strong headwinds ahead in view of the network sharing arrangement termination, sales and services tax reintroduction, fibre broadband re-pricing and intense competition,” it said.

MIDF Amanah Investment Bank in another note said the revamped MaxisONE plan, which offers a better value proposition, continues to show good traction as the postpaid subscriber base continues to increase steadily.

“This is further supported by the Hotlink postpaid flex and MaxisONE Share proposition. Coupled with stable postpaid average revenue per user (ARPU), the postpaid segment has continuously outperformed,” it said.

Meanwhile, it said the prepaid segment has shown commendable improvement as the company leverages on data analytics to target individual subscribers, resulting in a stabilised quarterly contribution from the prepaid segment.

In the near term, it said the company’s service revenue would still be negatively impacted by the progressive termination of 3G network services with Umobile.

“We do not expect the group would be able to offset the loss of contribution from Umobile organically in the near term,” it said.

It added that Maxis’ dividend yield is expected to remain below four per cent to meet its capital commitment and prepare for the upcoming spectrum reallocation exercise.

Public Investment Bank has maintained an “Underperform” call with a target price of RM5.18 on Maxis while Kenanga Investment Bank has retained a “Market Perform” view with an unchanged target price of RM5.55.

MIDF has maintained a “Neutral” view on Maxis but revised lower its target price to RM5.67 from RM5.96 previously. ? Bernama