KUALA LUMPUR (May 10): CIMB IB Research has maintained its “Add” rating on Axiata Group Bhd at RM4.48 with an unchanged target price of RM4.80 and said Axiata’s 1Q19F core EPS should be in line, doubling quarter-on-quarter (q-o-q) and up 50-60% year-on-year (y-o-y).
In a note May 9, the research house said earnings contribution from all operating companies (OpCos) should improve, except for Ncell.
CIMB Research said Axiata’s 1Q19 results will be released on May 28.
The research house said it expects circa RM300 million core net profit, nearly doubling q-o-q due to 4Q18’s low base and improved contributions from all OpCos (except Ncell).
It said that y-o-y, 1Q19 core net profit should be up 50-60%, mainly due to the cessation of equity accounting for Idea’s losses (1Q18: -RM114 million).
“During the quarter, the ringgit gained versus the Sri Lankan Rupee (+4.0%) and Bangladeshi Taka, but depreciated versus Indonesian Rupiah (-2.6%). 1Q19F core net profit should be in line with our and Bloomberg consensus forecasts.
“Maintain Add, with unchanged SOP-based target price of RM4.80,” it said.