Thursday 28 Mar 2024
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KUALA LUMPUR (June 6): CIMB Investment Bank Bhd maintained its "neutral" rating on the Malaysian telecommunication sector in anticipation of flat or slight growth in the mobile telecommunication industry revenue this year.

CIMB analyst Foong Choong Chen wrote in a research note today that DiGi.Com Bhd is CIMB's preferred pick in the local telecommunication sector.

"Given the steadier competition, we expect mobile industry revenue to be flat or growing slightly this year, vs. declines in the past three years.

"Malaysian telcos trade at a 22% premium over the ASEAN average 2018F EV/OpFCF of 17.1x, supported by decent 2018-19F yields of 3.8-4.1%. Our preferred pick and only Add is DiGi. We have Hold ratings on Axiata (Group Bhd), Maxis (Bhd) and TM (Telekom Malaysia Bhd). Key upside/downside risks: competition eases/intensifies significantly," Foong said.

EV and OpFCF stand for enterprise value and operating free cash flow respectively.

 

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