KUALA LUMPUR (Aug 14): CIMB IB Research has maintained its “Hold” rating on Axiata Group Bhd at RM4.43 with a lower target price of RM4.85 (from RM5) and said it expects Axiata to report a 2Q18F core net profit growth of 70-80% quarter-on-quarter (q-o-q), mainly due to Idea turning profitable.
In a note Aug 13, the research said that year-on-year (y-o-y), Axiata’s core net profit may be 4-9% lower.
“Celcom’s net profit could be flattish qoq as opex remains high & depreciation rises.
“XL’s negative earnings contribution should widen, based on its reported 1Q18 results.
“Axiata’s 2Q18 reported net loss may widen substantially qoq due to a RM1.5 billion-3 billion non-cash technical impairment on Idea.
“Maintain Hold with a 3% lower SOP-based target price of RM4.85,” it said.