KUALA LUMPUR (July 21): Deutsche Bank AG said Maxis Bhd exhibited "solid operating performance" in the second quarter as the mobile telecommunication entity contended with a challenging backdrop.

In a note today, Deutsche Bank said Maxis indicated that higher average revenue per user remained a key goal, hence the company's focus on network quality to attract and retain high-value customers.

"Maxis' 2Q17 results reflect stellar execution in a challenging environment. We expect capex (capital expenditure) to remain elevated for FY17 at 18% of sales and to taper off from FY18E as it completes its expansion. In the mid term, the focus remains on enterprise, own fibre rollout and cost efficiencies.

"Maxis' recent capital raise suggests that it expects spectrum auctions over the next 12 months," Deutsche Bank analysts Srinivas Rao, Peter Milliken and Pei-Yu Loo said.

They said Deutsche Bank had a target price of RM5.70 for Maxis shares with a "hold" call.

AmInvestment Bank Bhd analyst Alex Goh said AmInvestment, which also had a "hold" call for Maxis, had a fair value of RM5.76 for the stock.

Deutsche Bank and AmInvestment issued their notes following Maxis' second quarter results announcement.

Yesterday, Maxis said net profit rose to RM574 million in the second quarter ended June 30, 2017 from RM488 million a year earlier. For 1HFY17, Maxis said net profit rose to RM1.08 billion from RM1.01 billion a year earlier.